LDEN SPATIAL CLOUD DATA LIMITED

Executive Summary

LDEN SPATIAL CLOUD DATA LIMITED is currently facing significant financial challenges, with negative net assets and a working capital deficit indicating solvency and liquidity risks. While the company is profitable operationally, dividend payments and high short-term liabilities are straining cash flow. Immediate action to improve liquidity, restructure liabilities, and reduce dividend payouts is essential to restore financial health and ensure sustainable business operations.

LDEN SPATIAL CLOUD DATA LIMITED - Analysis Report

Company Number: SC676402

Analysis Date: 2025-07-29 20:21 UTC

Financial Health Assessment for LDEN SPATIAL CLOUD DATA LIMITED (as at 31 October 2024)

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1. Financial Health Score: D

Explanation:
The company is showing clear symptoms of financial distress with significant net current liabilities, negative net assets, and negative shareholders’ funds. While there is some modest cash on hand and debtor balances, the overwhelming current liabilities and negative equity position weigh heavily on the overall financial health, reflecting a fragile condition that requires urgent attention.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Current Assets	9,084	Low level of liquid assets but some cash and receivables present.
Cash	3,200	Limited cash reserves; tight liquidity.
Debtors	5,884	Some cash expected from customers; positive sign but small.
Current Liabilities	34,275	High short-term obligations; major concern for liquidity.
Net Current Assets	-25,191	Deficit in working capital; negative means liabilities exceed assets.
Net Assets	-25,191	Company is insolvent on a balance sheet basis (liabilities > assets).
Shareholders’ Funds	-25,196	Negative equity indicates accumulated losses or debt outweighing equity.
Profit for the Period	59,305	Positive operating result reported, but overshadowed by liabilities.
Dividends Paid	58,624	Large dividend payout relative to profits and financial position.

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3. Diagnosis: Financial Health Overview

LDEN SPATIAL CLOUD DATA LIMITED is currently in a precarious financial state akin to a patient with low vital signs but some signs of recovery. The negative net assets and shareholders’ funds are the most alarming symptoms and indicate underlying solvency issues. The company’s working capital is deeply negative, meaning it owes far more in short-term liabilities than it holds in short-term assets, signaling potential liquidity problems.

However, the company reported a profit in the latest period, which is a positive sign of operational capability, suggesting that the business model can generate income. The large dividend payments, almost matching the profit, might be a red flag as they reduce available cash reserves and could exacerbate liquidity pressures.

This financial profile suggests the company is currently surviving but is at risk of deteriorating health without intervention. The cash flow is weak ("unhealthy cash flow"), and the balance sheet shows distress ("symptoms of distress") that must be addressed.

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4. Recommendations: Path to Financial Wellness

• Improve Liquidity Management:
  Increase cash reserves and reduce current liabilities. This could involve negotiating extended payment terms with creditors or accelerating debtor collections to build a healthier cash buffer.

• Reassess Dividend Policy:
  The dividend payments are almost as high as the profits, which is unsustainable in a negative equity context. Consider suspending or reducing dividends until balance sheet health improves.

• Restructure Current Liabilities:
  Explore options to refinance or restructure short-term debts to longer-term liabilities to alleviate immediate liquidity strain.

• Enhance Working Capital Controls:
  Introduce rigorous credit control on debtors and optimize stock management (if applicable) to improve net current assets.

• Strategic Review:
  Undertake a comprehensive strategic review to identify growth opportunities and cost efficiencies to convert the positive operational profit into stronger financial stability.

• Regular Monitoring:
  Adopt a dashboard of key financial indicators to continuously monitor liquidity, solvency, and profitability, allowing early detection of financial stress.

• Seek Professional Advice:
  Given the negative equity and working capital deficit, consider engaging with financial advisors or turnaround specialists to develop a recovery plan.

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