MOUTON LIMITED
Company number 01942990 · Monitor this company
This analysis was written by an AI from the company's public filings. It may contain errors or omissions and is not financial or professional advice.
Financial Health Assessment: MOUTON LIMITED
1. Financial Health Score: C+
Explanation: Mouton Limited presents as a stable but sluggish patient — not in acute distress, but certainly not thriving. The company benefits from substantial property backing and decades of operational history, yet suffers from chronically low cash reserves, a working capital deficit, and anaemic profitability. Think of this as a patient with a strong skeleton (property assets) but poor circulation (cash flow) — structurally sound but functionally limited.
2. Key Vital Signs
| Vital Sign | 2024 | 2023 | Trend | Interpretation |
|---|---|---|---|---|
| Net Assets | £161,386 | £160,943 | ↑ £443 | Marginal improvement — barely a pulse |
| Total Assets | £259,744 | £261,061 | ↓ £1,317 | Slow asset erosion — losing muscle mass |
| Cash | £1,585 | £776 | ↑ | Improved but critically low |
| Current Liabilities | £22,343 | £19,325 | ↑ £3,018 | Growing short-term obligations |
| Net Current Assets | (£7,846) | (£9,246) | ↑ | Working capital deficit reduced but still negative |
| Long-term Debt | £75,281 | £79,929 | ↓ £4,648 | Debt repayment — healthy sign |
| Retained Earnings | £161,286 | £160,843 | ↑ £443 | Minimal profit retention |
| Debt-to-Equity Ratio | 46.6% | 49.6% | ↓ | Improving leverage — positive trajectory |
Critical Ratios
- Current Ratio: 0.65 (£14,497 ÷ £22,343) — Below healthy threshold of 1.0
- Cash to Current Liabilities: 7.1% — Dangerously thin liquidity cushion
- Return on Equity: ~0.27% — Extremely low profitability
3. Diagnosis
What the Financial Data Reveals About Business Health
Primary Diagnosis: Chronic Liquidity Constraint with Stable Structural Foundation
Mouton Limited operates as what might be described medically as a "stable but sedentary" condition. The business appears to be functioning primarily as a property-holding vehicle rather than an actively trading enterprise. This is evidenced by:
Property-Dominant Balance Sheet: - Tangible fixed assets of £245,245 represent 94.5% of total assets - Freehold land and buildings (cost £436,343, net book value after depreciation £245,245) form the backbone - The business owns its property outright or with modest long-term bank loans (£15,415 repayable by instalments over five years)
Minimal Trading Activity: - Average employee count of just 1 person suggests very low operational scale - Cash generation is negligible — the company has frequently reported £0 or near-zero cash balances - The £443 increase in retained earnings for 2024 suggests turnover just barely covers costs - Income Statement not filed (permitted under small company abridged regime), obscuring revenue detail
Working Capital Deficit — The Most Concerning Symptom: - Net current liabilities of £7,846 mean the company cannot pay all its short-term debts from current assets - With only £1,585 in cash against £22,343 in current liabilities, the company is reliant on: - Collecting debts from debtors (£12,912) - Ongoing property-related income to service obligations - The patience of trade creditors
Long-Term Debt Reduction — A Positive Vital Sign: - Long-term liabilities have decreased from £145,009 (2017) to £75,281 (2024) — a 48% reduction over seven years - This demonstrates disciplined debt repayment, akin to a patient steadily reducing a chronic condition through consistent treatment
Historical Trajectory — Slow Recovery: - Net assets have grown from £139,038 (2017) to £161,386 (2024) — a 16% improvement over seven years - However, this growth has been inconsistent, with a notable dip in 2016 (likely related to property revaluation or restructuring)
4. Recommendations
Prescriptions for Financial Wellness
🔴 URGENT — Improve Cash Position
Current state: £1,585 cash against £22,343 current liabilities is the financial equivalent of running on fumes.
Actions: - Accelerate debtor collection: £12,912 is owed to the company — chase outstanding payments aggressively - Negotiate creditor terms: Extend payment terms with suppliers to ease the working capital deficit - Establish an overdraft facility: A revolving credit line would provide a safety buffer for seasonal fluctuations (particularly relevant for agricultural operations)
🟡 IMPORTANT — Address Working Capital Deficit
Current state: Net current liabilities of £7,846 means the company is technically insolvent on a current basis.
Actions: - Reassess current liabilities: Determine how much of the £22,343 is trade creditors vs. accruals vs. short-term loans — different categories have different urgency - Consider long-term restructuring: Convert some short-term obligations to longer-term debt to improve the current ratio - Build a cash reserve target: Aim for minimum 3 months' operating expenses in cash
🟢 ONGOING — Enhance Revenue Generation
Current state: Profitability appears minimal for a company with £259,744 in assets.
Actions: - Maximise property income: With freehold property as the primary asset, ensure rental income (SIC code 68209) is at market rates - Review agricultural operations: If cereal growing (SIC 1110) is active, assess whether the land is being used optimally — could parts be let to neighbouring farmers? - Evaluate asset utilisation: With £245,245 in tangible assets generating minimal apparent return, consider whether all property is being productively deployed
🟢 MONITOR — Continue Debt Reduction
Current state: Good progress reducing long-term debt from £145,009 to £75,281.
Actions: - Maintain repayment discipline: The current trajectory is positive - Avoid new long-term borrowing unless it directly supports revenue-generating activities - Target debt-to-equity below 40% within 2-3 years (currently 46.6%)
📋 GOVERNANCE — Filing Compliance
Positive note: All filings are current and not overdue — the company is administratively healthy. Continue this good practice.
Prognosis
Short-term (1-2 years): STABLE — The company has sufficient property backing to weather short-term challenges, and the working capital deficit, while concerning, is manageable given the long-term nature of the business (property and agriculture are not typically subject to sudden demand shocks).
Medium-term (3-5 years): GUARDED IMPROVEMENT POSSIBLE — If the company can improve cash generation and eliminate the working capital deficit, the underlying asset base provides a solid foundation for growth. The continued reduction in long-term debt is encouraging.
Key Risk Factors: - Interest rate exposure: If bank loans are variable rate, rising rates could strain already thin cash flows - Property market risk: The balance sheet is heavily dependent on property values - Agricultural income volatility: Crop yields and commodity prices can fluctuate significantly - Succession risk: With two name shown to subscribers family directors and one employee, the business is highly dependent on key individuals