MSVC LTD

Executive Summary

MSVC LTD displays a stable financial condition with solid net assets and profitability, yet exhibits symptoms of liquidity strain due to an absence of cash reserves and high debtor balances. Strengthening cash flow management and accelerating debtor collections are key to sustaining financial wellness. With prudent financial oversight, the company is well-positioned for ongoing operational stability and growth.

MSVC LTD - Analysis Report

Company Number: 13560317

Analysis Date: 2025-07-20 15:48 UTC

Financial Health Assessment Report for MSVC LTD (as at 30 June 2023)

---

1. Financial Health Score: B

Explanation:
MSVC LTD exhibits a generally sound financial position with solid net assets and positive working capital. However, some caution points such as the absence of cash reserves at year-end and reliance on debtors as primary current assets temper the score. The company is financially stable but should monitor liquidity closely to maintain a healthy cash flow.

---

2. Key Vital Signs

Metric	2023 Value (£)	Interpretation
Fixed Assets	641,536	Strong investment in intangible (goodwill) and tangible assets, indicating significant capital tied up long-term.
Current Assets (Debtors)	943,504	High receivables; potential liquidity risk if collection slows. No cash balance reported in 2023.
Cash	0	Absence of cash at year-end is a symptom of tight liquidity despite strong receivables.
Current Liabilities	708,626	Debts due within one year; manageable but requires good cash collection.
Net Current Assets (Working Capital)	234,878	Positive, indicating the company can cover short-term obligations from current assets.
Net Assets (Equity)	876,414	Healthy shareholder equity, showing retained earnings have grown year-on-year.
Share Capital	700	Minimal share capital, typical for small private companies.
Profit and Loss Reserve	176,414	Accumulated profits have increased, indicating operational profitability.

Additional Observations:

• Intangible assets (primarily goodwill) decreased by £69,830, possibly reflecting amortisation or impairment, which should be monitored closely as it impacts asset quality.
• Tangible assets increased, with significant additions, showing investment in physical resources.
• The company employs a small workforce (average 2 employees), characteristic of a focused consultancy or audit firm.

---

3. Diagnosis: What the Financial Data Reveals About Business Health

MSVC LTD is demonstrating the classic signs of a growing small private company in the accounting/auditing sector. The "vital signs" indicate a stable financial condition with a robust equity base and positive working capital. The company’s asset structure is weighted towards intangible goodwill and tangible assets, reflecting investments in acquisitions or development of intellectual property.

However, the absence of cash at the year-end is a symptom of liquidity tightness, meaning the company relies heavily on debtor collections to meet short-term liabilities. While net current assets are positive, the company must ensure receivables are collected promptly to avoid cash flow distress. The increase in creditors and current liabilities also highlights the need for careful cash management.

The steady growth in retained earnings indicates profitability, but the amortisation of goodwill and increased depreciation charges suggest the company is managing its asset base conservatively.

Overall, MSVC LTD’s financial health resembles a patient with stable vital signs but periodic symptoms of liquidity strain. Close monitoring of cash flow and debtor ageing is essential to prevent any cash shortages, which could pose risks to ongoing operations.

---

4. Recommendations: Specific Actions to Improve Financial Wellness

• Improve Cash Reserves:
  Implement stricter credit control policies to accelerate debtor collections and build cash reserves. Consider short-term financing options to bridge any liquidity gaps.

• Review Debtor Quality:
  Conduct a detailed ageing analysis of receivables to identify slow-paying or doubtful debts. Proactively manage overdue accounts to reduce working capital tied up in debtors.

• Asset Management:
  Review the intangible asset amortisation schedule and assess any potential impairments. Ensure tangible asset investments align with business growth and do not overly strain cash flows.

• Liquidity Monitoring:
  Establish regular cash flow forecasting to anticipate short-term funding needs and avoid surprises. Maintain a buffer of liquid assets to cover at least 3 months of current liabilities.

• Operational Efficiency:
  Maintain lean staffing aligned with business volume; explore technology investments to enhance productivity without significant cost increases.

• Stakeholder Communication:
  Keep shareholders and directors informed of liquidity positions and financial forecasts to maintain confidence and support for strategic decisions.

---