Company Number: 12594543

Analysis Date: 2025-07-20 16:08 UTC

Financial Health Assessment for ALTNET SOLUTIONS LTD (as of 31 October 2024)

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1. Financial Health Score: B+

This company demonstrates robust financial vitality with solid net assets and a strong working capital position, reflecting a generally healthy financial condition. However, some caution is warranted around debtor management and asset utilization efficiency.

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2. Key Vital Signs: Core Metrics and Interpretation

Metric	Value (£)	Interpretation
Share Capital	111.10	Minimal share capital; typical for a private limited company.
Fixed Assets	192,615	Moderate investment in tangible and intangible assets.
Current Assets	2,783,316	Healthy liquidity pool, including cash and receivables.
Cash at Bank	722,138	Very healthy cash reserves indicating strong liquidity.
Debtors (Trade Receivables)	1,333,651	High but reduced compared to previous year, still significant.
Stocks	727,527	Noticeable stock levels; inventory management should be monitored.
Current Liabilities	1,375,691	Manageable short-term obligations, significantly lower than current assets.
Net Current Assets (Working Capital)	1,407,625	Strong positive working capital, indicating good short-term financial health.
Shareholders’ Funds (Net Assets)	1,600,240	Increasing year-on-year net asset base; sign of retained earnings and growth.
Employee Count	15	Moderate size for a tech services company, reflecting operational scale.

Trend Notes:

• Cash reserves have grown substantially from £169k to £722k, indicating improved liquidity.
• Debtors decreased from £2.43M to £1.33M, suggesting improved collections or sales mix.
• Stocks increased from £545k to £727k, necessitating attention to inventory turnover.
• Current liabilities reduced from £1.93M to £1.37M, easing short-term debt pressure.
• Net current assets improved from £1.21M to £1.40M, indicating stronger buffer to meet short-term obligations.
• Fixed assets increased notably, including capitalized intangible assets (website) and tangible assets.

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3. Diagnosis: Financial Condition and Underlying Business Health

Overall Financial Condition:

ALTNET SOLUTIONS LTD shows the "vital signs" of a financially stable and growing enterprise. The company has a healthy "heartbeat" in the form of strong cash reserves and positive working capital, which are critical for day-to-day operations. The increase in net assets year-over-year points to retained profits and reinvestment into the business.

Symptoms Analysis:

• Healthy Cash Flow: The substantial increase in cash from £169k to £722k is a positive symptom indicating effective cash management and operational cash generation.
• Receivables Management: A significant reduction in debtors by nearly £1.1M suggests improved credit control or a shift in sales terms, reducing exposure to late payments or bad debts.
• Stock Levels: The rise in stock levels could be a symptom of either planned inventory build-up for anticipated sales growth or potential overstocking. This requires monitoring to avoid cash being tied up unnecessarily.
• Asset Investment: Capital expenditure in tangible and intangible assets (notably a website) signals investment in operational capacity and technology, likely to support future growth.
• Employee Growth: Increasing employee count to 15 suggests scaling of operations, requiring commensurate revenue growth to sustain profitability.

Potential Areas of Concern:

• Working Capital Composition: While net current assets are positive, a large proportion of current assets are tied in stock and debtors. These are less liquid than cash and if not managed carefully may cause liquidity issues.
• Profitability Data: The absence of profit and loss details in the accounts limits full assessment of profitability, margins, and cost control. This is a "blind spot" in the diagnosis that should be addressed.

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4. Recommendations: Actions to Improve Financial Wellness

1. Improve Inventory Management: Implement tighter inventory controls and regular stock turnover analysis to prevent excess stock and free up cash flow.
2. Enhance Debtor Collections: Continue focus on credit control to further reduce debtor days and risk of bad debts.
3. Profit & Loss Transparency: Consider including a summary profit and loss account in future reports to provide stakeholders with insights into profitability trends and operational efficiency.
4. Maintain Cash Reserves: Preserve healthy cash balances while balancing working capital efficiency to ensure liquidity for unforeseen expenses or investment opportunities.
5. Monitor Capital Expenditure: Ensure that asset investments, including intangible assets like the website, are aligned with strategic growth plans and deliver measurable returns.
6. Growth Planning: With increased employee count, ensure revenue growth and cost management are aligned to maintain profitability and avoid operational strain.

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Medical Analogy Summary:

ALTNET SOLUTIONS LTD is like a patient with a strong pulse and good blood pressure (cash flow and working capital), showing signs of growth and vitality. However, the "symptoms" of increased inventory and sizeable receivables demand ongoing monitoring to avoid "circulatory blockages" in cash flow. Regular health checks on profitability and operational efficiency are advisable to maintain and improve this healthy financial state.

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