Company Number: 12816742

Analysis Date: 2025-07-20 15:28 UTC

Financial Health Assessment: DA NOTARY LIMITED

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1. Financial Health Score: C

Explanation:
DA NOTARY LIMITED exhibits modest financial stability but shows signs of emerging stress in liquidity and net asset base. While the company is solvent and operationally active, its shrinking net current assets and net equity over the last year indicate caution. The score "C" reflects a borderline healthy condition that requires proactive attention to avoid deterioration.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	5,926	6,410	Slight decrease; mostly cash and debtors
Cash at Bank	2,480	6,410	Significant drop indicating tighter liquidity
Debtors	3,446	0	Increase, possibly slower collections or increased sales
Current Liabilities	5,761	4,718	Increased short-term obligations, pressure on cash flow
Net Current Assets	165	1,692	Marked reduction, thin working capital
Net Assets / Equity	165	1,692	Substantial decline, reduced shareholder buffer
Share Capital	100	100	Stable, nominal capital base

Interpretation of Vital Signs:

• Liquidity (Cash & Net Current Assets): The sharp decline in cash from £6,410 to £2,480 and net current assets from £1,692 to £165 signals a "symptom of distress" in the company’s short-term financial health. The company’s ability to meet immediate obligations has become marginal.
• Debtors Increase: The rise in debtors to £3,446 from zero could mean slower payments by clients or higher sales on credit terms. This could be a liquidity risk if collections are delayed.
• Current Liabilities: A 22% rise in current liabilities to £5,761 adds pressure on working capital, potentially creating cash flow challenges.
• Net Assets and Equity: The steep fall in net assets from £1,692 to £165 indicates erosion of the company's financial cushion, reducing its ability to absorb shocks or invest without external funding.
• Operating Model: The small size of share capital and employee base (2 employees) indicates a micro or small enterprise profile, with limited financial flexibility.

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3. Diagnosis

DA NOTARY LIMITED currently shows signs akin to a "patient" whose vital signs are weakening but who is not yet critically ill. The company remains a going concern and solvent, as confirmed by directors, but the sharp decline in liquidity and equity over 12 months signals that the business could face operational strains if current trends persist.

• The increase in trade debtors alongside falling cash suggests that the company may be extending credit more aggressively or experiencing collection delays — a symptom that can precede cash flow crises if unaddressed.
• Rising current liabilities against a shrinking cash base reduces the margin for managing unexpected expenses or downturns.
• The profit and loss reserve has diminished significantly, reflecting either reduced profitability or distributions/expenditure exceeding income.
• The company is within the small entity regime, filing abridged accounts and exempt from audit, which means less external scrutiny but also potentially less robust financial controls.

In essence, DA NOTARY LIMITED is currently "stable but vulnerable." Without corrective action, it risks tipping into liquidity distress or erosion of shareholder value.

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4. Recommendations

To restore and maintain financial wellness, DA NOTARY LIMITED should consider the following:

1. Improve Cash Flow Management:

   • Tighten credit control processes to accelerate debtor collections.
   • Negotiate extended payment terms with suppliers to ease immediate liabilities.
   • Prepare cash flow forecasts to anticipate shortfalls and arrange short-term financing if necessary.

2. Monitor and Control Costs:

   • Review operating expenses to identify potential savings.
   • Avoid discretionary spending until liquidity improves.

3. Strengthen Equity Base:

   • Consider a small capital injection or shareholder loan to bolster net assets and working capital buffer.
   • Retain profits within the business rather than distributions to rebuild reserves.

4. Improve Financial Reporting and Oversight:

   • Although currently unaudited, consider voluntary financial reviews or management accounts for better visibility.
   • Engage a financial advisor to implement robust budgeting and monitoring systems.

5. Strategic Review:

   • Assess sales growth sustainability and debtor credit policies to avoid overextension.
   • Explore diversification or enhanced marketing to improve cash-generating activities.

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Medical Analogy Summary

DA NOTARY LIMITED is like a patient with good baseline health but currently showing early symptoms of dehydration (cash flow tightening) and low energy reserves (shrinking equity). Immediate hydration (cash management) and nutritional support (capital strengthening) are needed to avoid a crisis and restore robust health for sustainable growth.

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