T MURPHY BUILDING SERVICES LTD

Executive Summary

T Murphy Building Services Ltd exhibits a weak financial position with negative net assets and deteriorating liquidity, limiting its capacity to meet obligations. The significant working capital deficit and declining cash reserves elevate credit risk. Without clear improvement in profitability or cash flow management, credit extension is not recommended at this time.

T MURPHY BUILDING SERVICES LTD - Analysis Report

Company Number: 13236569

Analysis Date: 2025-07-29 15:56 UTC

1. Credit Opinion: DECLINE
   T Murphy Building Services Ltd shows significant and worsening net current liability and negative shareholders' funds over the past 4 years, indicating ongoing losses and financial distress. The company’s ability to meet short-term obligations is weak, with current liabilities materially exceeding current assets by £22,700 in the latest year. Despite being active with no overdue filings, the negative equity position (£7,275 deficit) and deteriorating liquidity suggest a high credit risk. Without evidence of stable or improving profitability and cash flow, extending credit would be imprudent.

2. Financial Strength:
   The balance sheet reveals a fragile financial structure. Fixed assets of £15,425 (plant and machinery) have been recently acquired, which indicates some investment but may strain cash resources. Current liabilities increased sharply to £25,599 from £16,947 last year, mainly driven by a large rise in "other creditors" (£19,322 vs £2,807). Shareholders' funds remain negative at £7,275, although improving slightly from the prior year. The company is small, with only one employee and minimal share capital (£2), consistent with a micro/small enterprise profile. The ongoing net liability position reflects accumulated losses and insufficient equity buffer.

3. Cash Flow Assessment:
   Cash reserves have declined significantly from £11,199 in 2022 to £2,700 in 2025, signaling cash burn and limited liquidity. Current assets (£2,899) are insufficient to cover current liabilities (£25,599), resulting in a working capital deficit of £22,700. Debtors remain minimal (£199), so cash inflows from receivables are limited. The large increase in current liabilities, especially other creditors, may point to supplier payment delays or financing through trade credit. Overall, liquidity is strained, raising concerns over the company's ability to service debt or short-term payables promptly.

4. Monitoring Points:

• Track quarterly cash flow and bank balances to detect further liquidity deterioration.
• Monitor the ageing and composition of creditors, particularly "other creditors," to assess payment behaviour and creditor confidence.
• Review upcoming profit and loss accounts to evaluate progress on profitability and reduction of accumulated losses.
• Evaluate operational changes or financial restructuring plans by management aimed at stabilizing finances.
• Confirm directors’ ongoing support or capital injections given persistent negative equity.