D2H ADVANCED TECHNOLOGIES LTD

Executive Summary

D2H Advanced Technologies Ltd remains financially stable with positive net assets and working capital, but recent significant declines in cash reserves and shareholder equity are concerning. Immediate focus on cash flow management and cost control is recommended to prevent further financial strain and ensure sustainable business health.

D2H ADVANCED TECHNOLOGIES LTD - Analysis Report

Company Number: 12553321

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

Financial Health Assessment: D2H Advanced Technologies Ltd

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1. Financial Health Score: B

Explanation:
D2H Advanced Technologies Ltd demonstrates solid financial stability with positive net assets and healthy working capital, but there are some warning signs including a marked decline in net assets and cash reserves over the latest reporting period. These symptoms suggest the company is generally financially sound but experiencing a period of stress that requires monitoring and potential corrective action.

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2. Key Vital Signs

Metric	Latest (31 Dec 2024)	Previous (31 Mar 2024)	Interpretation
Net Assets	£245,268	£539,348	Significant decrease (~54%), indicating erosion of shareholder equity.
Net Current Assets (Working Capital)	£140,534	£402,892	Substantial fall, but still positive, indicating current liabilities are covered by current assets.
Cash at Bank	£38,664	£128,463	Sharp decline (~70%) in cash reserves, potential liquidity concern.
Debtors	£394,238	£486,178	Reduction in receivables, may reflect lower sales or improved collections.
Current Liabilities	£292,368	£211,749	Increase in short-term debts, potential pressure on cash flow.
Long-Term Creditors	£33,250	£53,200	Decrease in long-term debt, positive for financial health.
Fixed Assets (Net Book Value)	£137,984	£189,656	Decrease primarily due to amortisation and depreciation, normal business wear.
Employees	12 (average)	9 (previous)	Slight increase in staff, increase in operating expenses likely.

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3. Symptoms Analysis

• Healthy Working Capital but Declining: The company maintains positive net current assets, which is a "healthy pulse" indicating it can meet short-term obligations. However, the nearly 65% decline signals a weakening of liquidity that could become a concern if the trend continues.

• Shrinking Cash Reserves: The drop in cash is a "symptom of distress" in cash flow management. This could be due to increased payments, lower cash collections, or investment activities. Low cash reserves reduce the company’s ability to absorb shocks or fund operations comfortably.

• Declining Net Assets: A halving of equity signals either losses incurred or distributions exceeding profits. This "weakening heart" of the company requires investigation into profitability and capital management.

• Increased Current Liabilities: Growth in short-term debts can indicate rising operational pressures or delayed payments to suppliers, which could strain supplier relationships and operational continuity.

• Stable Employee Numbers: A moderate increase in staff shows ongoing business activity and investment in human capital, but this can also pressure cash flow if revenue growth does not keep pace.

• Amortisation and Depreciation Effects: The reduced fixed assets value is typical due to systematic amortisation and depreciation ("normal aging"), not necessarily a negative sign.

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4. Diagnosis

D2H Advanced Technologies Ltd currently has a "stable but stressed" financial condition. The company shows a positive net asset base and working capital, indicating no immediate solvency risks. However, the dramatic falls in net assets and cash reserves—along with increased current liabilities—are "warning signs" that the company’s financial health is deteriorating. These could be early symptoms of cash flow management challenges or operational inefficiencies. The absence of an auditor’s report and only unaudited statements means some caution is warranted in interpretation.

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5. Prognosis

If current trends continue unchecked, the company may face increasing liquidity difficulties. However, the positive working capital and equity buffer provide time and opportunity to adjust operations and cash management. Proactive measures should be taken promptly to avoid further deterioration and maintain long-term viability.

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6. Recommendations

• Cash Flow Management: Improve cash inflows by accelerating debtor collections, negotiating better payment terms with suppliers, or securing short-term financing to shore up cash reserves.

• Cost Control: Review operating expenses, particularly staff costs and overheads, to enhance profitability and preserve cash.

• Profitability Analysis: Conduct detailed analysis to identify loss-making activities or projects to focus on profitable core services.

• Debt Management: Consider restructuring current liabilities to longer-term arrangements to ease immediate cash pressures.

• Financial Monitoring: Implement regular financial health checks using these vital signs to detect early distress signals.

• Stakeholder Communication: Keep shareholders and lenders informed about financial status and remedial steps to maintain confidence.

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Medical Analogy Summary:
D2H Advanced Technologies Ltd currently has "stable vital signs" but shows "symptoms of financial fatigue" such as declining cash and equity. The company is not in immediate danger but requires careful "treatment" through cash flow and cost management to restore full financial health.

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