DIMENSIONS TECHNOLOGIES LTD

Executive Summary

Dimensions Technologies Ltd is currently experiencing liquidity challenges and a significant decline in net assets, indicating early symptoms of financial distress despite maintaining a stable cash position. Prompt focus on working capital improvement, cash flow management, and cost control is essential to restore financial health and ensure long-term viability.

DIMENSIONS TECHNOLOGIES LTD - Analysis Report

Company Number: 14155203

Analysis Date: 2025-07-29 13:53 UTC

Financial Health Assessment for Dimensions Technologies Ltd (as at 30 June 2024)

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1. Financial Health Score: C

Explanation:
Dimensions Technologies Ltd shows signs of financial strain in its latest financial year, with a decline in net assets and a negative working capital position indicating liquidity challenges. However, the company maintains positive net assets and a reasonable asset base, suggesting it is still solvent but experiencing symptoms of financial distress that need addressing promptly.

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2. Key Vital Signs

Metric	2024 Value	2023 Value	Interpretation
Net Assets (Shareholders’ Funds)	£15,072	£51,486	Significant decline (~71%) – reduced cushion for creditors and owners.
Net Current Assets (Working Capital)	-£13,821	£24,522	Negative working capital signals liquidity stress; short-term obligations exceed short-term assets.
Cash Balance	£96,921	£93,249	Cash level is stable and slightly improved, a "healthy pulse" in cash terms.
Debtors	£71,108	£128,110	Debtor reduction may reflect better collections or lower sales; requires monitoring for cause.
Current Liabilities	£181,850	£196,837	Slight decrease, but still high relative to current assets.
Fixed Assets (Intangible + Tangible)	£29,678	£27,422	Asset base stable, indicating ongoing investment in long-term resources.
Share Capital	£14	£13	Minimal equity capital, typical for a small private company.

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3. Diagnosis

• Liquidity Symptoms: The company’s net current assets have turned negative, a key symptom of financial distress akin to a patient showing low blood pressure. This means the company may struggle to meet short-term obligations without relying on additional financing or converting fixed assets quickly. However, cash levels remain relatively healthy, which provides some immediate breathing room.

• Capital Base Decline: The steep fall in net assets from £51,486 to £15,072 suggests the company has either incurred losses or paid out reserves. This reduction weakens its financial resilience and ability to absorb shocks, similar to a weakened immune system.

• Receivables Management: The significant drop in debtors (from £128k to £71k) could be positive if it reflects improved collections, or negative if it signals a drop in sales. This needs further investigation to confirm.

• Asset Investment: The company continues to invest in intangible and tangible assets, which is a positive sign of business development but also represents a commitment of resources that might strain liquidity if not balanced.

• Shareholder Control: The company is controlled by individuals holding significant voting rights and shares, suggesting decision-making is concentrated and that any financial strategy changes can be implemented swiftly.

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4. Recommendations

• Improve Working Capital Management: Focus on reducing current liabilities and/or increasing current assets to restore positive working capital. This could involve negotiating longer payment terms with suppliers or accelerating cash collections from customers.

• Cash Flow Monitoring: Maintain and strengthen cash flow controls to ensure the "heartbeat" of the company remains stable. Consider preparing detailed cash flow forecasts and stress testing under different scenarios.

• Cost Control and Profitability Review: Investigate the causes of the asset and equity decline. Identify cost-saving opportunities or revenue enhancement strategies to restore profitability and rebuild reserves.

• Debt Restructuring: If short-term liabilities remain high, explore options for refinancing or restructuring debts to more manageable terms, easing immediate liquidity pressure.

• Regular Financial Health Checks: Implement quarterly financial reviews to catch early signs of distress and respond proactively.

• Engage Stakeholders: Given the concentrated ownership, ensure open communication with controlling shareholders to secure necessary support and alignment on financial recovery plans.

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