MICROTECH ONLINE SOLUTIONS LTD

Executive Summary

MICROTECH ONLINE SOLUTIONS LTD is currently experiencing significant liquidity and solvency challenges, as evidenced by its increasing working capital deficit and negative net assets. Immediate action is recommended to improve cash flow, reduce short-term liabilities, and strengthen equity to avoid financial collapse. Without intervention, the company's financial health is at high risk, threatening its ongoing viability.

MICROTECH ONLINE SOLUTIONS LTD - Analysis Report

Company Number: 13887107

Analysis Date: 2025-07-20 16:47 UTC

Financial Health Assessment for MICROTECH ONLINE SOLUTIONS LTD

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1. Financial Health Score: D

Explanation:
The company shows a concerning financial position with net current liabilities (working capital deficit) increasing from £11,231 in 2024 to £14,004 in 2025. This negative working capital indicates symptoms of liquidity distress — the company does not have enough short-term assets to cover its short-term liabilities. While it is a micro-entity and may have limited operational scale, this deficit raises red flags for financial stability and going concern.

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2. Key Vital Signs:

Metric	2025 (£)	2024 (£)	Interpretation
Current Assets	3,925	4,004	Very low and slightly decreasing, indicating limited liquid resources.
Current Liabilities	17,929	15,235	Increasing short-term debts, suggesting rising obligations.
Net Current Assets (Working Capital)	-14,004	-11,231	Negative and worsening, a critical symptom of liquidity strain.
Net Assets (Equity)	-14,004	-11,231	Negative equity indicates the company’s liabilities exceed assets.
Number of Employees	1	1	Very small scale, limited human resource.

• Working Capital Deficit: The company owes significantly more in the short term than it has available in current assets. This is similar to a patient whose vital signs show insufficient blood flow — the company may struggle to meet immediate obligations.
• Negative Net Assets: This represents a negative "financial health score" and hints at accumulated losses or excess liabilities.
• Stable but Low Current Assets: There is no sign of improvement in cash or receivables.

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3. Diagnosis:

MICROTECH ONLINE SOLUTIONS LTD is currently showing strong symptoms of financial distress, primarily related to liquidity and solvency issues. The company’s liabilities outweigh its assets by a notable margin, which is a critical sign of an unhealthy financial state. The increase in current liabilities alongside a decrease in current assets suggests that short-term obligations are growing faster than the company’s ability to meet them.

Given the company’s micro size with only one employee and no audit requirement, the financial structure is minimal but fragile. The director and sole shareholder (Mrs. Nahid Akhtar) controls the company fully, which may enable quick decision-making but also concentrates risk.

The company's financial position resembles a patient with a compromised circulatory system — cash (blood) flow is insufficient to meet immediate demands, which if not treated, can lead to further deterioration or collapse (insolvency or liquidation).

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4. Recommendations:

Immediate Actions to Improve Financial Wellness:

• Improve Liquidity:

  • Consider renegotiating payment terms with creditors to reduce short-term liabilities pressure.
  • Explore ways to accelerate cash inflows, such as offering early payment discounts or improving receivables collection.

• Increase Capital Injection:

  • The director/shareholder could provide additional equity or a shareholder loan to boost net assets and working capital.
  • Alternatively, seek external investment or small business loans with manageable repayment schedules.

• Cost Control and Revenue Growth:

  • Review all operational expenses to identify cost-saving opportunities.
  • Explore additional revenue streams or increase sales volume to improve cash generation.

• Financial Monitoring:

  • Implement regular cash flow forecasting and management to identify liquidity gaps earlier.
  • Monitor key ratios monthly to detect any worsening trends quickly.

• Professional Advice:

  • Engage with an accountant or business advisor to develop a turnaround plan tailored to the company’s micro scale and retail nature.
  • Evaluate the sustainability of current business model and operational efficiency.

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