MUNSHI ALLEN ST LTD

Executive Summary

MUNSHI ALLEN ST LTD exhibits a stable and improving financial position with healthy working capital and increasing equity. However, a significant long-term liability to its parent company requires careful management to avoid potential financial strain. Maintaining strong liquidity and monitoring debt service capacity will be crucial for sustaining future financial wellness.

MUNSHI ALLEN ST LTD - Analysis Report

Company Number: 13116602

Analysis Date: 2025-07-20 12:32 UTC

Financial Health Assessment for MUNSHI ALLEN ST LTD

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1. Financial Health Score: C

Explanation:
The company demonstrates a stable but cautious financial position. It shows growing net assets and working capital, indicating some financial improvement. However, the presence of a significant long-term liability and relatively low liquidity compared to current liabilities contributes to a moderate score. The company is not in distress but should monitor its obligations closely.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Net Assets (Shareholders' Funds)	£190,045	Positive and increasing, indicating retained earnings are growing and equity base is strengthening.
Current Assets	£233,379	Increased from prior years, showing an improving asset base available to cover short-term obligations.
Cash at Bank	£103,379	Healthy cash position with a good increase from £38,015 in 2023, indicating improved liquidity.
Debtors	£130,000	Consistent value, possibly intercompany or trade receivables; manageable if collectible.
Current Liabilities	£43,334	Low and manageable short-term debts relative to current assets; indicates sound short-term liquidity.
Long-Term Liabilities	£1,362,000	Significant debt owed to group undertakings; this financial leverage is a risk factor to monitor.
Net Current Assets (Working Capital)	£190,045	Positive and growing, indicating the company can cover short-term obligations comfortably.
Profit & Loss Reserve	£190,044	Reflects accumulated retained earnings, aligned with net assets, showing profitable operations over time.

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3. Diagnosis:

MUNSHI ALLEN ST LTD operates in the real estate sector, focusing on buying and selling its own properties. The financial "vital signs" suggest a company with a healthy cash flow and steadily growing equity base, which is a positive symptom of good financial management and business viability.

However, the presence of a large long-term liability (£1.36 million) owed to its parent group represents a significant financial commitment. This kind of leverage is common in real estate ventures but does create a symptom of potential distress if the company cannot generate sufficient cash flow or asset disposals to service this debt in the future.

The working capital position is strong, indicating the company can meet its immediate liabilities without strain. The increase in cash reserves is a positive sign of liquidity improvement, reducing short-term financial risk.

Overall, the company shows stable and improving financial health, but the high level of group-related debt means ongoing vigilance is necessary to avoid liquidity issues or solvency problems if market conditions deteriorate.

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4. Recommendations:

• Monitor Debt Servicing Capability: Regularly review cash flow forecasts to ensure the company can meet interest and principal repayments on the £1.36 million owed to the parent group without compromising operational liquidity.

• Enhance Cash Flow Management: Continue to build cash reserves and accelerate debtor collections to maintain a healthy liquidity buffer—this will mitigate risks associated with the high leverage.

• Evaluate Asset Portfolio: Periodically review the investment properties for potential asset sales or refinancing options to reduce long-term liabilities and improve the balance sheet strength.

• Consider Diversification: Explore opportunities to diversify income streams or enhance operational efficiency to reduce dependence on property market cycles.

• Maintain Compliance and Reporting: Ensure timely filing of accounts and confirmation statements to avoid penalties and maintain transparency for stakeholders.

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