PROTAX MCR LTD

Executive Summary

PROTAX MCR LTD is in an early-stage financial condition with negative net assets and working capital, indicating initial liquidity and solvency challenges typical for a start-up micro-entity. Immediate actions to improve cash flow, control costs, and possibly inject capital are recommended to stabilize financial health and support sustainable growth.

PROTAX MCR LTD - Analysis Report

Company Number: 14484281

Analysis Date: 2025-07-20 12:06 UTC

Financial Health Assessment for PROTAX MCR LTD

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1. Financial Health Score: D

Explanation:
The company shows signs of financial distress, primarily evidenced by negative net assets and net current liabilities. As a micro-entity in its first year, some initial losses and negative equity are not uncommon, but the current figures indicate a weak financial position that requires careful monitoring and strategic action.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	399	Very low tangible/non-current assets, typical for a newly formed micro-company.
Current Liabilities	635	Short-term debts greater than current assets, indicating immediate obligations to settle.
Net Current Assets	-635	Negative working capital, signaling potential liquidity problems ("symptom of cash flow stress").
Total Assets less Liabilities	-236	Negative overall asset position, meaning liabilities exceed assets ("symptom of financial strain").
Net Assets / Shareholders' Funds	-236	Negative equity, suggesting the business is technically insolvent on paper at this stage.
Number of Employees	0	No staff employed yet, reducing operating expenses but also indicating early development stage.

Industry Context:
As a bookkeeping service (SIC 69202), the company is expected to maintain accurate financial records and prudent cash flow management. The current financial "vital signs" suggest early operational challenges.

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3. Diagnosis

• Liquidity and Working Capital: The company exhibits "symptoms of distress" with negative net current assets. This means it currently does not have enough liquid resources to cover short-term liabilities, which could jeopardize day-to-day operations if not addressed promptly.

• Solvency: Negative net assets and shareholders' funds indicate the business’s liabilities exceed its total assets. While this is not unusual for a start-up micro-entity in its first year, it is a warning "red flag" that the business must generate profits or inject capital soon to restore financial health.

• Operational Stage: The absence of employees and minimal fixed assets suggests the company is in its infancy, possibly pre-revenue or early revenue phase. This aligns with the typical "incubation" phase of a start-up where losses are expected but must be controlled.

• Governance and Control: Full ownership and directorship by a single individual (Miss Sana Gondal) provides streamlined decision-making but also centralizes risk. The director’s awareness and active management will be critical to steer the company towards health.

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4. Recommendations

• Improve Cash Flow Management:
  Prioritize generating positive cash inflows through client acquisition or service contracts to reverse negative working capital. Consider short-term financing options if necessary to manage immediate cash needs.

• Capital Injection:
  The director or investors may need to inject additional equity capital to strengthen the balance sheet and cover liabilities, preventing insolvency risks.

• Cost Control Measures:
  Maintain lean operations until revenues stabilize. Avoid unnecessary expenditures and monitor all payables closely to prevent a liquidity crunch.

• Financial Planning and Forecasting:
  Develop a detailed cash flow forecast and profit plan to anticipate cash requirements and profitability timelines. Use this to make informed decisions and adjust operations dynamically.

• Seek Professional Advice:
  Although the company is in bookkeeping, external financial advice or mentorship could provide strategic insights and support, especially in managing growth and compliance.

• Regular Monitoring:
  Track monthly financials closely—particularly cash balances, receivables, and payables—to catch early warning signs and adjust promptly.

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Medical Analogy Summary

PROTAX MCR LTD currently shows "symptoms of financial distress" with negative working capital and equity, akin to a patient with low vital signs indicating weakness. While early-stage challenges are expected, without corrective treatment—improving cash flow and capital infusion—the company's financial health could deteriorate further, risking "financial insolvency." Immediate intervention and ongoing monitoring are essential to restore vitality and ensure sustainable growth.

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