MTM CONCEPTS LTD

Executive Summary

MTM Concepts Ltd is a recently incorporated company with a weak financial position characterized by negative net assets and working capital deficits. Despite holding some cash, it relies on director loans and has limited financial resilience, posing a high credit risk. Credit facilities are not recommended without significant improvement in financial health or external support.

MTM CONCEPTS LTD - Analysis Report

Company Number: SC707470

Analysis Date: 2025-07-29 20:25 UTC

1. Credit Opinion: DECLINE MTM Concepts Ltd shows significant financial weakness with net current liabilities of £5,119 and negative shareholders' funds of £4,373 as at 31 August 2024. The company is operating with a working capital deficit and a negative net asset position within just three years of incorporation. Although it holds cash balances of £23,740, current liabilities of £30,628 exceed current assets, indicating potential liquidity stress. The director's loan account balance of £14,128 also signals reliance on director funding for operations. Given the short trading history, negative equity, and working capital deficit, the risk of default on credit facilities is high. Approval for credit facilities is not advisable without substantial mitigants or guarantees.

2. Financial Strength: The balance sheet is fragile. Fixed assets are minimal (£747), mostly intangible and computer equipment. The key issue is current liabilities exceeding current assets, resulting in net current liabilities of £5,119 and a negative net asset base (-£4,372). The company’s equity has deteriorated rapidly from £1 at incorporation to a negative value, reflecting accumulated losses or operational deficits. No long-term liabilities are disclosed, but the reliance on director loans undermines financial independence. Overall, the balance sheet does not demonstrate financial strength or capital adequacy.

3. Cash Flow Assessment: Cash at bank is £23,740, which provides some immediate liquidity; however, this is offset by current liabilities of £30,628, leading to a negative working capital position. Debtors are low at £1,769, indicating limited receivables to support cash flow. The company has not prepared a cash flow statement but has taken exemption due to its size. The presence of director loans suggests cash flow challenges requiring related party funding. Without positive operating cash flow or significant cash reserves above liabilities, liquidity risk is elevated.

4. Monitoring Points:

• Track improvements or deterioration in net current assets and shareholders’ funds in future filings.
• Monitor director loan balances and any changes indicating additional financial support or repayment.
• Watch for timely payment of current liabilities and any overdue creditor balances.
• Assess future profitability and cash flow generation once income statements become available.
• Ensure accounts and confirmation statements remain up to date to avoid compliance risks.