Company Number: 13552908

Analysis Date: 2025-07-20 17:26 UTC

1. Credit Opinion: DECLINE
   Mughal Management Ltd shows weak financial health with negative net assets of £9,700 as of August 2023, deteriorating from negative £5,100 the prior year. The company has minimal cash (£100) with current liabilities of £9,800, indicating poor liquidity and an inability to meet short-term debts without external support. The negative retained earnings and shareholders' funds imply accumulated losses and no profitability track record. The business is very small (one employee) and fully controlled by a single director, which increases concentration risk. Given these factors, the company currently lacks capacity to service new credit.

2. Financial Strength:
   The balance sheet is fragile and declining. Negative net assets signal insolvency from an accounting standpoint. The company holds no fixed assets and only nominal cash, while current liabilities have almost doubled year-on-year. Shareholders’ funds are negative £9,700, indicating erosion of capital. With no reported income statement, the absence of profits and increasing losses is evident from the rising deficit in retained earnings. Overall, the financial structure is weak and not supportive of additional debt.

3. Cash Flow Assessment:
   Liquidity is critical concern. Cash at bank is only £100, insufficient to cover immediate liabilities of £9,800. Net current assets are negative £9,700, reflecting working capital deficiency. The company likely relies on shareholder funding or external injections to meet obligations. There is no indication of positive operating cash flow, and the growing creditor balance suggests rising unsecured trade or finance liabilities. Working capital management appears poor.

4. Monitoring Points:

• Track improvements in net current assets and cash balances in future accounts.
• Monitor changes in current liabilities and whether creditor balances are being reduced.
• Watch for evidence of profitability or positive retained earnings reversal.
• Observe any changes in ownership or management that could affect risk profile.
• Check for compliance with filing deadlines and audit requirements to avoid penalties.