STRACHAN MEDICAL LIMITED

Executive Summary

Strachan Medical Limited is a small medical practice with recent significant capital investment financed by increased long-term borrowing. While net assets remain positive, deteriorating working capital and rising liabilities introduce liquidity risks. Conditional credit approval is recommended with ongoing close monitoring of cash flow and debt servicing capacity.

STRACHAN MEDICAL LIMITED - Analysis Report

Company Number: 12780264

Analysis Date: 2025-07-29 19:27 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Strachan Medical Limited shows some weaknesses in liquidity and increased leverage that warrant caution. While the company remains operational with a positive net asset position, the sharp rise in long-term creditors in the latest year and negative net current assets raise concerns about short-term funding pressures. The company’s small scale and micro-entity filing status limit transparency. Approval is conditional on close monitoring of cash flow and working capital improvements.

2. Financial Strength:

• Net assets declined from £19,415 in 2023 to £14,312 in 2024, indicating a reduction in equity resources.
• Fixed assets increased significantly from £5,717 to £92,068, suggesting recent capital investment likely funded by long-term borrowing (creditors >1 year rose to £63,895).
• The company maintains a positive total assets less current liabilities figure (£79,497), but the increase in non-current liabilities is substantial relative to equity.
• Share capital is nominal (£2), typical for micro entities, with all equity held by Dr Jamie Maxwell Strachan.

3. Cash Flow Assessment:

• Current liabilities rose markedly from £5,193 in 2023 to £40,078 in 2024, while current assets increased modestly to £23,093.
• Net current assets turned negative by £12,571, indicating potential short-term liquidity strain.
• The presence of prepayments and accrued income (£4,414) somewhat offsets current assets but does not fully mitigate working capital challenges.
• The company’s cash conversion cycle and ability to service short-term debt require careful scrutiny, as working capital is under pressure.

4. Monitoring Points:

• Monitor the trend in net current assets to ensure working capital stabilizes or improves.
• Watch debt servicing capability, especially interest and principal payments on long-term creditors.
• Evaluate the impact of fixed asset investments on revenue generation and profitability.
• Keep track of any changes in director or shareholder control and any subsequent impact on financial policies.
• Assess future filings for improved cash flow statements and profit & loss details to better understand operating performance.