DOMINOCODES LTD

Executive Summary

DOMINOCODES LTD maintains a fragile but stable financial position with minimal working capital and equity buffers. Strengthening cash flow management and building reserves through improved profitability or capital injection are vital to ensure sustainable operations and prevent liquidity crises.

DOMINOCODES LTD - Analysis Report

Company Number: 14545767

Analysis Date: 2025-07-29 12:57 UTC

Financial Health Assessment of DOMINOCODES LTD (formerly MONKEY STAMP LTD)

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1. Financial Health Score: C

Explanation:
The company shows marginally positive net current assets and shareholders' funds, indicating it is currently solvent but with very thin working capital margins. The cash position is modest and liabilities are nearly equal to current assets, reflecting a fragile liquidity situation. This score suggests the company is "stable but vulnerable," requiring close monitoring and proactive financial management to avoid distress.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Current Assets	£6,562	Adequate short-term resources, slight increase from prior years.
Cash at Bank	£2,129	Limited cash buffer; essential for daily operations.
Debtors	£4,433	Substantial receivables; ability to collect timely critical.
Current Liabilities	£6,328	High short-term obligations nearly equal to current assets.
Net Current Assets (Working Capital)	£234	Very slim positive working capital; fragile liquidity.
Shareholders Funds (Equity)	£234	Low equity base; company is just above breakeven in net assets.

• Cash Flow Health: The "heartbeat" of the company—cash—is weak but positive. Cash balance is sufficient for immediate needs but leaves little margin for unexpected expenses.
• Liquidity Ratio (Current Ratio): Current Assets / Current Liabilities ≈ 1.04, just above 1. A ratio close to 1 signals the company can meet short-term obligations but with minimal cushion.
• Receivables vs. Payables: Receivables are nearly equal to payables, which could mean delays in cash inflows might stress daily operations.
• Equity Position: Shareholder funds are minimal, indicating limited financial “reserves” to absorb shocks.

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3. Diagnosis

DOMINOCODES LTD, active since December 2022 and classified as a small private limited company operating in IT services (SIC 62090), is in a delicate financial state resembling a patient with stable but borderline vital signs. The company has maintained a positive net current asset position for two years, but only marginally so, indicating an ongoing struggle to build financial robustness.

• Symptoms of Financial Stress:

  • Very low working capital margin (£234).
  • High current liabilities nearly equal to current assets, suggesting tight liquidity.
  • Cash on hand is low relative to liabilities, which might challenge operational flexibility.
  • The company relies heavily on receivables, so any delays in collections could cause cash flow issues.
  • No long-term assets or reserves appear from the balance sheet, limiting collateral or fallback options.

• Strengths:

  • Positive net assets over three years indicate solvency.
  • No overdue filings or administrative issues.
  • Ownership and control are consolidated under a single person (Mr. Thibault Howard Nicholl), enabling streamlined decision-making.

• Weaknesses:

  • Thin equity and working capital cushions increase vulnerability to operational hiccups or unexpected costs.
  • Director loans and related party balances indicate some reliance on internal financing, which may not be sustainable long-term.
  • Limited employee base (1 employee) suggests potential limits in operational capacity or scale.

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4. Recommendations

To improve the company's financial wellness and build resilience, the following steps are advised:

• Strengthen Cash Reserves:

  • Accelerate debtor collections to improve cash inflows and reduce days sales outstanding.
  • Negotiate longer payment terms with creditors to improve liquidity timing.

• Build Working Capital:

  • Monitor and control expenses strictly to prevent erosion of net current assets.
  • Consider short-term financing options (e.g., overdrafts or invoice factoring) cautiously to buffer liquidity gaps.

• Increase Equity Base:

  • Explore opportunities for capital injection either from the owner or external investors to build financial reserves.
  • Retain profits within the company rather than distributing, to bolster retained earnings.

• Operational Efficiency:

  • Evaluate service pricing and cost structures to improve profitability and increase retained earnings.
  • Plan for growth by scaling staff or operations prudently to avoid overextension.

• Financial Monitoring:

  • Implement regular cash flow forecasting and scenario analysis to detect and address liquidity risks early.
  • Maintain discipline in statutory compliance and timely filing to avoid penalties and reputational damage.

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Medical Analogy Summary

DOMINOCODES LTD’s financial "pulse" is steady but weak, with "symptoms" of limited liquidity and thin equity akin to a patient with borderline vital signs. Immediate steps to improve cash flow and build financial reserves are critical to avoid slipping into financial distress. Regular financial "check-ups" and proactive management will be essential to restore full financial "health."

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