MED NOTION LIMITED

Executive Summary

MED NOTION LIMITED is currently experiencing financial distress characterized by negative equity and working capital challenges. While the company remains operational, urgent attention to liquidity management and debt reduction is essential to avoid insolvency risks. With careful financial restructuring and improved cash flow control, there is potential to restore financial health.

MED NOTION LIMITED - Analysis Report

Company Number: 12863238

Analysis Date: 2025-07-20 11:24 UTC

Financial Health Assessment: MED NOTION LIMITED (as of 31 October 2023)

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1. Financial Health Score: D

Explanation:
The company shows significant symptoms of financial distress, primarily due to persistent and increasing liabilities outweighing assets. The net asset position has moved from positive in earlier years to a negative figure in the latest accounts. This negative equity and high creditor balances indicate a company under financial strain, thus a "D" grade reflecting below-average financial health but not yet insolvent.

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2. Key Vital Signs

Metric	Latest Value (2023)	Interpretation
Fixed Assets	£404	Minimal long-term assets; very lean asset base.
Current Assets	£2,833	Modest short-term resources; improved from prior year.
Current Liabilities	£4,233	Debts due within 1 year; moderate but increasing.
Creditors (due after 1 year)	£12,905	Large long-term liabilities; growing burden.
Net Current Assets	-£1,400	Negative working capital; indicates liquidity stress.
Total Net Assets	-£13,901	Negative equity; company owes more than owns.
Shareholders’ Funds	-£13,901	Reflects accumulated losses and liabilities.
Average Number of Employees	1	Very small operation; limited human resources.

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3. Symptoms Analysis

• Negative Net Assets (Equity): The company’s total liabilities exceed its total assets by £13,901. This is a classic symptom of financial distress, akin to a patient’s vital organ failure—here, the "organ" is the company's financial foundation.

• Working Capital Deficit: Negative net current assets (-£1,400) indicate the company may struggle to meet short-term obligations on time, risking cash flow crises.

• Rising Long-Term Creditors: Creditors falling due after more than one year have increased from £10,402 in 2022 to £12,905 in 2023, suggesting the company is relying more on borrowing or deferred payments to finance operations.

• Minimal Fixed Assets: The company's asset base is extremely lightweight, which limits collateral for borrowing and reduces ability to absorb financial shocks.

• Small Scale and Growth: The company operates with only one employee and is classified as a micro-entity, indicating a very lean business model with limited resources.

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4. Diagnosis

MED NOTION LIMITED is exhibiting clear symptoms of financial strain. The negative equity position signals that accumulated losses or liabilities have eroded shareholder value, much like a patient whose reserves are depleted. The negative working capital implies liquidity challenges—difficulty in meeting day-to-day expenses without additional financing.

While the company remains active and has not defaulted on filing obligations, its balance sheet reveals a precarious financial condition. The growing long-term liabilities suggest increasing dependence on external financing, which could become unsustainable if not managed carefully.

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5. Prognosis

If the current financial trends persist, without corrective action, the company risks worsening liquidity issues that may lead to insolvency. However, as a micro-entity with limited operational complexity and manageable employee headcount, there is potential for financial stabilization if liabilities are curtailed and cash flow improved.

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6. Recommendations

• Improve Liquidity Management: Focus on converting current assets into cash more efficiently and negotiating better payment terms with creditors to reduce working capital deficit.

• Reduce Long-Term Debt: Explore restructuring options to decrease long-term creditors or convert debt into equity if possible.

• Enhance Revenue Streams: Consider strategies to increase turnover to build reserves, such as expanding client base or diversifying services.

• Cost Control: Maintain strict control on overheads, particularly given the micro scale of operations.

• Seek Professional Financial Advice: Engage a financial advisor to explore funding options and develop a turnaround plan.

• Regular Monitoring: Implement monthly cash flow forecasts and financial reviews to detect early warning signs of distress.

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