MSH CONTRACTING LIMITED

Executive Summary

MSH Contracting Limited, in its first year, presents a healthy financial status with strong liquidity and positive net assets, indicating stable operations and profitability. While the company shows no immediate signs of financial distress, focusing on building reserves, managing liabilities, and planning for growth will enhance long-term financial wellness and resilience.

MSH CONTRACTING LIMITED - Analysis Report

Company Number: 14810445

Analysis Date: 2025-07-20 11:45 UTC

Financial Health Assessment for MSH Contracting Limited

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1. Financial Health Score: B

Explanation:
MSH Contracting Limited shows a sound financial footing for a company in its first full financial year. The company has positive net current assets and net assets, indicating a stable "financial pulse." While the scale is small, the liquidity position is healthy and there are no signs of financial distress. However, as a newly incorporated company with limited history and modest capital, there is room for strengthening reserves and scaling operations.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Current Assets	9,999	Indicates available short-term resources, mostly cash
Cash at Bank	8,824	Healthy cash balance suggests good liquidity
Debtors	1,175	Modest receivables, manageable credit risk
Current Liabilities	5,048	Includes tax and social security obligations
Net Current Assets	4,951	Positive working capital, a "healthy cash flow" sign
Net Assets	4,951	Overall positive equity, no accumulated losses
Share Capital	100	Minimal initial paid-up capital
Profit and Loss Reserve	4,851	Retained earnings indicate operational profitability
Number of Employees	1	Very small scale, single-operator business

Interpretation:

• The company’s liquidity is strong, with nearly £9k in cash and current assets exceeding liabilities by almost £5k.
• Positive net assets reflect a stable balance sheet without any overdraft or debt overhang.
• Low share capital is typical for a startup; however, most equity is from retained earnings, indicating profitability or capital injections.
• Creditors mainly relate to taxation and social security, normal for a new business transitioning from formation to trading.

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3. Diagnosis

MSH Contracting Limited’s financial "vitals" resemble a patient in good initial health. The company has a robust cash position and positive net current assets, suggesting no immediate liquidity concerns—akin to a strong heartbeat. The absence of long-term liabilities and a clean balance sheet indicate a lack of financial strain or "symptoms of distress."

Being a micro-entity in the machinery repair sector, the company benefits from a lean cost base and focused operations led by a single director who is also the sole shareholder. This structure allows quick decision-making but also poses concentration risk if the director faces operational issues.

The company’s exemption from audit under small company rules is appropriate given its size, but as it grows, enhanced financial oversight may become necessary.

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4. Recommendations

To maintain and improve financial wellness, consider the following steps:

• Build Financial Resilience: Retain a portion of profits to increase cash reserves and equity base, safeguarding against unforeseen expenses or market downturns. Think of this as building the body's immune system against shocks.

• Diversify Client Base: As a one-person operation, expanding clientele and possibly hiring additional personnel can reduce business risk and support growth, like strengthening muscle mass for endurance.

• Monitor Tax and Social Security Liabilities: The current level of tax and social security creditors is significant; timely payment and planning can prevent penalties and maintain good financial health.

• Implement Formal Financial Controls: Even as a micro-entity, establishing basic budgeting, cash flow forecasts, and debtor management practices can ensure ongoing financial "vitality."

• Plan for Growth: Consider strategies for scaling services or entering related markets in machinery repair to enhance turnover and profitability, improving overall "fitness" of the company.

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