MISTRY TECH SOLUTIONS LTD

Executive Summary

MISTRY TECH SOLUTIONS LTD is at an early stage but already showing signs of financial strain with negative net assets and insufficient current assets to cover liabilities. Immediate actions such as capital injection and improved cash flow management are essential to stabilize operations and support growth. With focused management, the company can recover from this fragile state and build a healthier financial foundation.

MISTRY TECH SOLUTIONS LTD - Analysis Report

Company Number: 14526034

Analysis Date: 2025-07-20 18:25 UTC

Financial Health Assessment for MISTRY TECH SOLUTIONS LTD

---

1. Financial Health Score: D

Explanation:
The company shows critical signs of financial distress with net liabilities and negative retained earnings shortly after incorporation. Lack of cash or significant current assets combined with current liabilities exceeding assets indicates a fragile financial state. However, being newly formed and with limited operational history must be considered. The score reflects urgent need for financial stabilisation.

---

2. Key Vital Signs

Metric	Value	Interpretation
Net Assets	-£502	Negative net assets indicate liabilities exceed assets, a symptom of financial distress.
Current Assets (Debtors)	£2	Virtually no current assets; minimal cash or receivables to cover liabilities.
Current Liabilities	£504	Obligations due within one year significantly surpass assets, indicating liquidity risk.
Shareholders’ Funds	-£502	Shareholder equity is negative, showing accumulated losses or undercapitalisation.
Number of Employees	1	Very small operation, minimal staff expenses but limited capacity for growth or revenue generation.
Company Age	~1 year	Early stage company, which may still be in investment or setup phase.

---

3. Diagnosis: What the Financial Data Reveals

• Symptoms of Distress:
  The company is operating with a negative net asset base, meaning it owes more than it owns — akin to a patient with dangerously low vital signs. The meagre current assets (£2 in debtors) are grossly insufficient to meet current liabilities (£504), indicating an urgent liquidity crunch or cash flow problem. This is a classic symptom of financial strain where the business may struggle to meet short-term obligations without additional funding or revenue.

• Underlying Causes:
  Given the company was incorporated in December 2022 and this is its first financial period ending December 2023, these figures likely reflect startup costs, initial investments, or early operating losses common in early business stages. The absence of audit and limited disclosures suggest the company is taking advantage of small company exemptions, but this also limits transparency.

• Governance & Control:
  The company is controlled by two individuals, each holding 25-50% shares and voting rights, with directorship and secretary appointments within the same family or group at the registered office. Such tight control may lead to efficient decision-making but also concentrates financial risk.

• Liquidity & Working Capital:
  With current liabilities exceeding current assets, the company has a working capital deficit, signaling it may not have enough liquid resources to pay bills as they fall due. This is like a patient whose blood pressure (cash flow) is too low to sustain vital functions.

• Going Concern Assumption:
  The directors have prepared accounts on a going concern basis, but the financial indicators suggest close monitoring is needed to ensure the company can continue operating without raising additional funds or improving profitability.

---

4. Recommendations: Specific Actions to Improve Financial Wellness

1. Inject Additional Capital or Obtain Financing:
   Immediate cash infusion from shareholders or external lenders is critical to restore positive net assets and improve liquidity. Consider equity investment or short-term credit facilities to cover current liabilities.

2. Strengthen Cash Flow Management:
   Implement stringent cash flow forecasting and control mechanisms. Accelerate collection of receivables, negotiate better payment terms with suppliers, and minimize unnecessary expenses.

3. Develop Revenue Streams:
   Focus on increasing sales and diversifying income channels. Given the retail and telecom equipment SIC codes, explore online marketing, broaden customer base, and enhance product offerings to boost turnover.

4. Monitor and Control Operating Costs:
   Keep employee costs and overheads minimal, especially in the early growth phase. Consider outsourcing non-core functions or leveraging technology to reduce expenses.

5. Regular Financial Review:
   Schedule monthly financial health check-ups akin to medical monitoring to detect early signs of financial stress and react promptly.

6. Prepare for Future Filings and Compliance:
   Maintain timely and accurate filings to avoid penalties and ensure transparent communication with stakeholders, which can improve creditworthiness and business reputation.

---