DREAM SUPPORT SOLUTIONS LTD

Executive Summary

DREAM SUPPORT SOLUTIONS LTD shows a sound financial position with positive working capital and strong cash reserves, indicating good liquidity and operational health. The company is expanding, as seen from growing debtors and equity, but must carefully manage receivables and payables to maintain a healthy cash flow. With prudent financial management, the outlook remains stable and positive.

DREAM SUPPORT SOLUTIONS LTD - Analysis Report

Company Number: 14374965

Analysis Date: 2025-07-20 18:37 UTC

Financial Health Assessment for DREAM SUPPORT SOLUTIONS LTD

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1. Financial Health Score: B

Explanation:
DREAM SUPPORT SOLUTIONS LTD exhibits signs of stable and improving financial health with growing net assets and positive working capital. The company’s cash reserves are healthy, and it has maintained a steady operational footing since incorporation. However, the relatively high current liabilities compared to current assets and modest fixed asset base suggest room for improvement in liquidity management and asset utilization. Overall, the company is financially sound but should remain vigilant against liquidity risks.

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2. Key Vital Signs

Metric	2024 Figure	Interpretation
Current Assets	£285,702	Healthy increase, driven by cash and debtors, indicating growing business activity.
Cash Reserves	£171,356	Robust cash position, essential for meeting short-term obligations and operational flexibility.
Debtors	£114,346	Significant rise from last year; indicates increased sales on credit but requires monitoring.
Current Liabilities	£220,696	Increased liabilities, mostly trade creditors; manageable but requires careful cash flow control.
Net Current Assets (Working Capital)	£65,006	Positive working capital signals ability to cover short-term debts, a sign of financial health.
Net Assets (Equity)	£70,278	Growth from previous year reflects retained earnings and capital build-up.
Fixed Assets (Net Book Value)	£5,272	Small asset base, typical for service-oriented business; depreciation is stable.
Employee Count	4	Small team size consistent with company category, manageable overhead costs.

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3. Diagnosis: Financial Health in Medical Terms

• Healthy Cash Flow: The company’s cash reserves are strong—a vital sign indicating good liquidity and operational cash inflows. This "healthy pulse" allows the business to meet immediate obligations without stress.

• Symptoms of Growth: The sharp increase in debtors suggests rising sales or receivables. While this reflects business expansion, it also reveals a "symptom" that requires careful monitoring to avoid potential cash flow strain if collections slow.

• Working Capital Strength: Positive net current assets (working capital) indicate the company has more short-term assets than liabilities, akin to a patient with a strong immune system able to fend off short-term financial stress.

• Asset Utilization: The modest fixed asset base is typical for a service company focused on real estate management rather than capital-intensive operations. This "lean physique" reduces fixed overhead but limits collateral for borrowing.

• Liabilities Management: The increase in current liabilities, mostly trade creditors, is a "stress indicator" that the company must manage carefully to avoid liquidity crunches. Timely payments and negotiation of credit terms will be vital.

• Equity Growth: The increase in shareholders’ funds signals retained profits and confidence from owners, which is like a growing "reserve strength" supporting the company’s financial health.

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4. Recommendations: Prescriptions for Financial Wellness

1. Strengthen Debtor Management:
   Implement or enhance credit control processes to ensure timely collection of receivables. This will prevent cash flow "blockages" caused by slow-paying customers.

2. Monitor and Manage Payables:
   Negotiate favourable payment terms with suppliers to better align outflows with inflows, reducing pressure on cash reserves.

3. Maintain Healthy Cash Buffers:
   Continue to build or maintain cash reserves to address unforeseen expenses and provide operational flexibility.

4. Consider Asset Investments Carefully:
   Evaluate whether increased investment in fixed assets could improve operational efficiency or revenue generation, but avoid overextension that could strain cash flow.

5. Regular Financial Check-Ups:
   Conduct quarterly reviews of key financial metrics to detect early signs of distress, much like regular health screenings.

6. Plan for Growth Sustainably:
   As the company expands, ensure that working capital and financing strategies keep pace with operational needs to avoid liquidity shortfalls.

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