MSM ENGINEERING SERVICES LTD

Executive Summary

MSM ENGINEERING SERVICES LTD demonstrates early-stage financial profiles typical of a micro-entity startup with limited capital and negative working capital, suggesting liquidity pressures that require close management. The company’s financial health is currently stable but fragile, with recommendations focusing on improving cash flow, building reserves, and regular financial monitoring to ensure sustainable growth and avoid distress. Immediate attention to working capital management will strengthen its financial resilience as it matures.

MSM ENGINEERING SERVICES LTD - Analysis Report

Company Number: 15054706

Analysis Date: 2025-07-20 12:50 UTC

Financial Health Assessment for MSM ENGINEERING SERVICES LTD

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1. Financial Health Score: C

Explanation:
MSM ENGINEERING SERVICES LTD shows signs of a very early stage business with limited financial history and modest asset base. The company has positive net assets but has a working capital deficit, indicating some liquidity concerns which are typical for a startup micro-entity. The overall financial condition is stable but fragile, warranting close monitoring and proactive management to ensure sustainable growth.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	11,409	Indicates investment in long-term assets, a positive sign of operational setup.
Current Assets	32,272	Represents cash, receivables, or stock available in the short term.
Current Liabilities	42,673	Obligations due within one year, exceeding current assets, signaling liquidity pressure.
Net Current Assets (Working Capital)	(10,401)	Negative working capital—"symptom of cash flow stress"—may hinder ability to meet short-term debts.
Net Assets (Equity)	1,009	Positive but very low net worth, reflecting early stage with limited retained earnings or reserves.
Shareholders' Funds	1,009	Equity capital invested; reflects sole control and small scale.
Employees	1	Very small operation, consistent with micro-entity status.

Interpretation:

• The company is in its infancy with minimal shareholders' funds and a very lean structure.
• Negative working capital is a cautionary sign; the company owes more short-term than it holds in liquid assets. This may create "symptoms of distress" if cash inflows are not timely.
• The positive net asset figure, though small, suggests no insolvency yet but limited financial buffer.

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3. Diagnosis

MSM ENGINEERING SERVICES LTD is a newly formed micro-entity engaged in civil engineering projects, currently operating with a minimal workforce and modest capital investment. Its financial "vital signs" reveal a startup still in the early stages of operational and financial development. The negative working capital is a key symptom that could indicate potential liquidity challenges, common for new companies investing heavily upfront or experiencing delayed payments from clients.

The absence of an audit and reliance on micro-entity accounting standards is appropriate for this size but also means less detailed financial scrutiny. Given the sole director and 75-100% ownership by Mr. Matthew Alexander Shaw, the company has clear control but also concentration risk.

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4. Recommendations

To improve financial wellness and build a robust foundation, the company should consider:

1. Improve Working Capital Management:

   • Accelerate receivables collection and negotiate better payment terms with suppliers to improve liquidity.
   • Consider short-term financing options (e.g., overdrafts, invoice factoring) to bridge cash flow gaps.

2. Build Cash Reserves:

   • Maintain a healthy cash buffer to cushion against unexpected expenses or revenue delays, reducing "symptoms of financial distress."

3. Monitor Financial Metrics Regularly:

   • Track cash flow and liquidity monthly to detect early signs of strain and act promptly.
   • Prepare simple cash flow forecasts aligned with project cycles.

4. Explore Growth Opportunities:

   • Invest carefully in projects or assets that can generate steady income to increase net assets over time.
   • Consider expanding workforce cautiously as revenue grows.

5. Compliance and Governance:

   • Keep filing deadlines up to date to avoid penalties and maintain good standing.
   • Maintain clear records and consider periodic professional financial reviews.

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