M&Y CONTRACTS (SCOTLAND) LIMITED

Executive Summary

M&Y CONTRACTS (SCOTLAND) LIMITED is a young and financially stable micro-entity showing solid liquidity and growing equity. The company’s financial "vital signs" indicate no distress, reflecting prudent management and a healthy operational foundation. With continued focus on cash flow, gradual asset investment, and diversification, the business is well-positioned for sustainable growth.

M&Y CONTRACTS (SCOTLAND) LIMITED - Analysis Report

Company Number: SC757739

Analysis Date: 2025-07-29 19:12 UTC

Financial Health Assessment of M&Y CONTRACTS (SCOTLAND) LIMITED

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1. Financial Health Score: B

Explanation:
M&Y CONTRACTS (SCOTLAND) LIMITED shows a solid financial footing for a micro-entity in its early stages of operation. The company has demonstrated growth in net assets and working capital since incorporation, indicating a healthy development phase. However, the absolute size of financial metrics remains modest, consistent with its micro classification and recent inception, so there is room for improved liquidity and asset base diversification to achieve an "A" rating.

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2. Key Vital Signs (Core Financial Metrics)

Metric	Value (2024)	Interpretation
Fixed Assets	£391	Minimal investment in long-term assets, typical for a start-up or service business with low capital intensity. Healthy as no excessive fixed costs yet.
Current Assets	£8,714	Adequate short-term resources, mainly cash/debtors to cover short-term obligations.
Current Liabilities	£3,218	Manageable current debts; company can meet these liabilities comfortably.
Net Current Assets (Working Capital)	£5,496	Positive and substantial working capital, indicating liquidity strength and ability to fund day-to-day operations without stress.
Total Net Assets / Equity	£5,527	Increasing equity base from £100 at incorporation to over £5,500, showing retained earnings or capital injection and growing financial buffer.
Employee Count	2	Small workforce consistent with micro business size and niche service offering.

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3. Symptoms Analysis (What the Numbers Reveal)

• Growth and Development: The jump in net assets from £100 at incorporation to £5,527 reflects healthy capital accumulation, either through retained profits or shareholder investment, a positive symptom indicating the business is scaling up steadily.

• Liquidity Health: The strong positive net current assets (working capital) signal a "healthy cash flow pulse," meaning the company can comfortably meet short-term obligations without liquidity strain. This is a key sign of financial stability.

• Asset Structure: Very low fixed asset base suggests the company operates in a service industry with minimal capital investment, which aligns with its SIC code for cleaning services. This reduces financial risk related to asset depreciation or impairment.

• Operating Scale: The small employee number and micro classification indicate early-stage maturity. The company has not yet expanded significantly but is building a stable foundation.

• No Overdue Filings: Timely accounts and returns filings demonstrate good compliance and governance practices, reducing regulatory risks.

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4. Diagnosis (Overall Financial Condition)

M&Y CONTRACTS (SCOTLAND) LIMITED exhibits the financial characteristics of a young, well-managed micro business with solid working capital and growing equity. The company’s "financial vital signs" indicate no immediate distress or warning symptoms. The healthy liquidity and incremental growth in net assets suggest the business is in a stable condition with a strong potential to grow sustainably.

The absence of significant long-term liabilities or audit exemptions also suggests prudent financial management. However, the company remains small and exposed to typical micro-entity risks such as limited diversification, dependency on a few clients or contracts, and vulnerability to economic or sectoral shocks.

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5. Prognosis (Future Financial Outlook)

If management maintains current financial discipline and continues to grow revenues prudently, the company is likely to improve its financial health further. Positive working capital and increasing equity provide a robust platform to invest in growth opportunities or weather short-term volatility.

Key risks include the challenge of scaling operations beyond micro size without over-leveraging or stretching liquidity, and the need to build a more diversified asset and income base. The business should also monitor sector trends in cleaning services and be prepared for competitive or regulatory changes.

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6. Recommendations (Actions to Improve Financial Wellness)

• Maintain Healthy Cash Flow: Continue diligent cash management to preserve positive working capital. Avoid overextension on credit or inventory.

• Build Fixed Asset Base Gradually: Consider reinvesting profits into appropriate equipment or technology to enhance operational efficiency without jeopardizing liquidity.

• Diversify Client Base: To reduce dependency risk, pursue a broader client portfolio within the cleaning sector or adjacent markets.

• Plan for Growth: Develop a financial plan for scaling up operations, including budgeting for staff increases, marketing, and potential financing needs.

• Enhance Financial Reporting: As the company grows, consider voluntary audit or more detailed financial reviews to enhance transparency and stakeholder confidence.

• Monitor Industry Trends: Stay informed on regulatory or market developments in building cleaning services to adapt business strategy timely.

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