DMHA LTD

Executive Summary

DMHA LTD is exhibiting signs of good financial health with growing turnover, profitability, and positive working capital. The absence of debt and rising net assets indicate a stable foundation, though the company should closely monitor provisions and build financial resilience as it expands. With prudent management and strategic planning, the outlook for sustainable growth is positive.

DMHA LTD - Analysis Report

Company Number: 13442511

Analysis Date: 2025-07-29 18:14 UTC

Financial Health Assessment for DMHA LTD (as of 30 June 2024)

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1. Financial Health Score: B

Explanation:
DMHA LTD demonstrates a stable and improving financial position typical for a young micro-entity in its initial years of operation. The company shows healthy growth in turnover and profits, positive net current assets with no current liabilities, and an increasing net asset base. However, the relatively low scale of operations and the presence of provisions for liabilities, which reduce net assets, indicate room for strengthening its financial "immune system" to withstand future shocks. Overall, the company’s financial vital signs suggest good health but with caution warranted for scaling and managing liabilities.

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2. Key Vital Signs

Metric	Value (2024)	Interpretation
Turnover	£4,252	Significant increase (~5x) from previous year, indicating growing business activity.
Profit for the Period	£2,974	Positive and increased profit margin, showing operational effectiveness.
Net Current Assets	£1,145	Healthy working capital indicating good short-term liquidity; no immediate pressure on cash.
Current Liabilities	£0	No short-term debts or payables, indicating absence of financial strain or overdue payments.
Provisions for Liabilities	£807	Noted provisions reduce net assets; needs monitoring to understand nature and sufficiency.
Net Assets / Shareholders’ Funds	£338	Positive and growing equity base, though modest, reflecting accumulated retained earnings.
Fixed Assets	£0	No capital investment in long-term assets; typical for service-based micro-enterprises.
Employee Count	1	Sole operator or very small team, aligning with micro-entity status.

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3. Diagnosis: What the Financial Data Reveals

• Healthy Cash Flow and Liquidity: The company has no current liabilities and positive net current assets (£1,145), indicating a "healthy pulse" in terms of liquidity and ability to cover short-term obligations without stress.
• Growth Trend: The turnover increased significantly from £838 to £4,252 in the latest year, suggesting strong business development or successful client acquisition. Profitability also improved, a positive "symptom" of operational efficiency.
• Modest Scale and Capital Base: As a micro-entity with minimal fixed assets and only £338 in net assets, the business is in an early development phase, relying mainly on operational cash flows rather than asset backing.
• Provisions for Liabilities: The £807 provision is a "warning sign" that there are potential future expenses or risks earmarked, which reduce the equity buffer. These should be regularly reviewed to avoid unexpected financial "flare-ups."
• No Debt Burden: Absence of creditors indicates the company is not currently depending on external borrowings or supplier credit, which lowers financial risk.
• Single Director/Employee: The business is likely owner-operated, which means financial health is closely tied to the director’s ability to sustain operations.

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4. Recommendations: Specific Actions to Improve Financial Wellness

• Monitor and Manage Provisions: Understand the nature of the £807 provisions and ensure they are adequate but not excessive. Regular review can help anticipate and mitigate future liabilities.
• Build Financial Reserves: Aim to increase retained earnings and net assets to create a stronger financial buffer against unexpected expenses or downturns.
• Consider Asset Investment: Evaluate investments in fixed assets or technology that could improve efficiency or service delivery, supporting sustainable growth.
• Cash Flow Forecasting: Maintain detailed cash flow projections to ensure liquidity remains healthy as the business scales.
• Diversify Revenue Streams: Explore opportunities to expand client base or service offerings to reduce dependence on a narrow income source.
• Compliance and Record-Keeping: Continue timely filing of accounts and confirmation statements to avoid penalties and maintain good standing.
• Seek Professional Advice: As the business grows, consider consulting financial or business advisors to optimize tax planning, financing, and strategic growth.

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