Company Number: 12661839

Analysis Date: 2025-07-29 12:34 UTC

1. Credit Opinion: DECLINE
   MX5 Parts Warehouse Ltd shows persistent and deepening negative net assets and net current assets over the last three years, indicating an ongoing erosion of financial stability. The company’s liabilities, particularly director loans, have increased substantially (£17,838 in 2024 vs £9,661 in 2023) which suggests reliance on insider funding rather than external creditworthiness. Negative cash balance (£-96) at the latest year-end also points to liquidity distress. No employees are reported, implying limited operational scale or possibly dormant trading activity. Overall, the company currently lacks the financial strength and liquidity to service external debt or credit facilities reliably.

2. Financial Strength:
   The balance sheet reveals a worsening position with net liabilities of £20,976 in 2024, nearly doubling from £10,730 in 2023. Net current liabilities have increased to £22,095, driven by rising current liabilities (£21,999) against negligible current assets. Fixed assets are minimal (£1,119), and shareholder funds are negative, reflecting accumulated losses and no apparent equity buffer. The significant director loans (over 80% of current liabilities) indicate internal funding rather than sustainable external financing. This level of negative equity and working capital is a red flag for credit risk.

3. Cash Flow Assessment:
   The company ended the year with a negative cash balance, showing immediate liquidity issues. Current liabilities exceed current assets by a wide margin, indicating tight or insufficient working capital. The lack of employees suggests limited operational activity, potentially constraining cash inflow generation. The increase in director loans suggests the company is dependent on non-commercial funding to meet obligations. Without improvements in cash generation or capital injection, the company is unlikely to meet short-term liabilities.

4. Monitoring Points:

• Track changes in net current assets and net assets to monitor if the company stabilizes or further deteriorates.
• Monitor director loan balances and any external financing arrangements.
• Watch cash flow statements closely for signs of operational cash generation.
• Review any changes in operational scale, such as hiring employees or expanding inventory or sales.
• Keep an eye on upcoming accounts for improvement or further decline in liquidity and solvency metrics.