DR VISION LTD

Executive Summary

DR VISION LTD exhibits a stable financial condition typical of a young private company with positive working capital and manageable liabilities. While liquidity is healthy, the modest equity and reliance on a director’s loan suggest cautious monitoring and strategic strengthening of financial reserves are advisable. With prudent management, the company can build its financial resilience and support sustainable growth.

DR VISION LTD - Analysis Report

Company Number: 14699220

Analysis Date: 2025-07-20 15:10 UTC

Financial Health Assessment Report for DR VISION LTD

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1. Financial Health Score: B-

Explanation:
DR VISION LTD shows signs of stable financial footing for a recently incorporated company, with positive net current assets and net assets. However, the relatively low equity base and presence of long-term liabilities (notably a director’s loan) indicate some financial strain that requires monitoring. The company’s liquidity and solvency metrics are adequate but not robust, warranting cautious optimism.

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2. Key Vital Signs

Metric	2025 Figure (£)	Interpretation
Current Assets	14,423	Healthy level of short-term assets including cash and debtors, indicating liquidity.
Cash on Hand	8,823	Solid cash reserves relative to liabilities, a positive sign of immediate payment ability.
Debtors	5,600	Moderate amount owed by customers; stable but requires active management to avoid delays.
Current Liabilities	9,400	Debts due within one year; manageable given current assets but close monitoring needed.
Net Current Assets (Working Capital)	5,023	Positive working capital signals the company can cover short-term obligations comfortably.
Total Assets Less Current Liabilities	7,668	Indicates assets exceeding current liabilities, showing operational solvency.
Creditors Due After One Year (Director’s Loan)	5,518	Significant non-bank long-term debt to director; manageable but reflects reliance on internal funding.
Net Assets (Equity)	2,150	Low equity base, typical for a new company but a symptom of limited financial cushion.
Share Capital	1	Minimal share capital, common in small private companies, indicating concentrated ownership.

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3. Diagnosis: Financial "Vital Signs" and Symptom Analysis

• Liquidity ("Healthy Cash Flow"): The company maintains a good cash position (£8,823) relative to current liabilities (£9,400), showing a capacity to meet short-term obligations without distress. The positive net current assets (£5,023) confirm this liquidity health. This is akin to a patient having a strong pulse and normal blood pressure—good baseline indicators.

• Solvency ("Financial Backbone"): Total assets exceed total liabilities by £2,150, indicating solvency; however, the net asset value is modest. The £5,518 director’s loan is a long-term liability, reflecting reliance on internal funding sources rather than external creditors or equity. This suggests the company is still building its financial "muscle" and may be vulnerable to shocks, similar to a patient with some underlying vulnerabilities despite no acute symptoms.

• Profitability and Retained Earnings ("Energy Reserves"): The profit and loss reserve is positive but small (£2,149), indicating some retained earnings but limited profitability history, expected for a company incorporated less than two years ago.

• Operational Stability ("Overall Vitality"): The company employs 2 people and operates in a regulated healthcare-related sector, which may offer stable revenue streams but also regulatory compliance demands. The consistent figures year-over-year show steady but limited growth.

• Risk Indicators ("Symptoms of Distress"): The presence of a director’s loan as a significant creditor could represent a potential risk if the company struggles to generate sufficient cash flow to repay. No overdue filings or indications of financial distress are noted, which is positive.

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4. Recommendations: Prescription for Financial Wellness

1. Strengthen Equity Base: Consider injecting additional equity capital or retaining more earnings to build a stronger financial cushion, reducing reliance on director loans and improving solvency ratios.

2. Improve Debtor Management: Actively monitor and manage trade debtors to accelerate cash inflows and reduce the risk of bad debts, ensuring liquidity remains robust.

3. Plan for Loan Repayment: Develop a clear repayment schedule for the director’s loan to reduce long-term liabilities and improve financial independence.

4. Regular Financial Monitoring: Maintain regular cash flow forecasting and budget reviews to detect early signs of liquidity or solvency issues—akin to routine health check-ups.

5. Explore Growth Opportunities: As the company stabilizes, consider strategic investments in fixed assets or expanding staff to increase operational capacity and revenue generation.

6. Maintain Compliance and Transparency: Continue timely filing of accounts and confirmation statements to avoid penalties and maintain stakeholder confidence.

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