AKADATA LIMITED

Executive Summary

AKADATA LIMITED demonstrates a stable financial condition with positive working capital and net assets, reflecting a healthy liquidity position. Mild caution arises from a slight reduction in equity and new director advances, which require monitoring. With focused management on cash flow, asset utilisation, and debt structure, the company is well-positioned for sustainable growth.

AKADATA LIMITED - Analysis Report

Company Number: 14175009

Analysis Date: 2025-07-20 15:07 UTC

Financial Health Assessment for AKADATA LIMITED as of 30 June 2024

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1. Financial Health Score: B

Explanation:
AKADATA LIMITED exhibits a generally sound financial position with stable net current assets and shareholders’ funds over the last two years. The company maintains positive working capital and net assets, indicating a healthy buffer to meet short-term obligations. However, a slight decline in total assets and equity, along with the presence of director’s advances, signals some mild caution. Overall, the company is financially healthy but should monitor its liquidity and capital structure closely to maintain this status.

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2. Key Vital Signs

Metric	30 June 2024	Interpretation
Fixed Assets	£3,868	Low level of long-term investments; typical for a micro-entity, indicating limited capital intensity.
Current Assets	£13,840	Represents cash, receivables, and stock; a healthy pool of liquid resources.
Current Liabilities	£9,367	Short-term debts and obligations due within a year; manageable relative to current assets.
Net Current Assets (Working Capital)	£4,473	Positive working capital, indicating the company can cover short-term liabilities comfortably—sign of "healthy cash flow."
Total Assets Less Current Liabilities (Net Assets)	£8,341	Positive and substantial net asset base relative to company size; supports business sustainability.
Shareholders’ Funds (Equity)	£8,341	Equity backing is stable, though slightly reduced from prior year, indicating retained earnings or capital injections.
Director’s Advances	£2,011 (new in 2024)	Director loans to the company indicate some reliance on management funding, a mild "symptom of financial strain" or working capital support.

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3. Diagnosis

AKADATA LIMITED shows the "vital signs" of a financially stable micro-entity. The company holds a positive net current asset position, which is akin to a patient with a steady pulse and normal blood pressure—indicating liquidity and short-term solvency are in good shape. The slight reduction in fixed assets and shareholders’ funds over the year may suggest depreciation or minor asset sales and a modest reduction in equity, which requires attention to prevent further erosion.

The emergence of director’s advances of £2,011 is a mild "symptom" that the company may be relying on internal funding to bridge cash flow gaps or invest in operations. While this is not uncommon for small companies, it should be monitored to avoid over-dependence on insider loans, which could affect financial flexibility.

The company operates in diverse sectors including social work activities, credit granting, IT consultancy, and internet retail. This diversification can be beneficial but requires careful management to ensure operational efficiency and cash flow consistency.

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4. Recommendations

• Maintain and Monitor Working Capital: Continue to keep a healthy balance of current assets over current liabilities. Regularly review receivables and payables to optimise cash flow and avoid liquidity "stress symptoms."

• Evaluate Director’s Advances: Formalise and monitor director loans to ensure repayment plans or conversions to equity are in place. This will prevent these advances from becoming a long-term liability strain.

• Asset Management: Review fixed assets to understand the decline and assess if investment or replacement of equipment is necessary to support growth or operational efficiency.

• Profitability Focus: As the company is young (incorporated 2022) and micro-sized, focus on improving profitability and building retained earnings to strengthen shareholders’ funds and reduce reliance on external/internal loans.

• Compliance and Reporting: Ensure timely filing of accounts and confirmation statements as deadlines approach, which is crucial for maintaining good corporate health and avoiding penalties.

• Strategic Review: Given the variety of SIC codes, conduct a strategic review of core business segments to focus resources on the most profitable or promising activities, thereby improving overall financial resilience.

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