MYDATA-T LTD

Executive Summary

MYDATA-T LTD is financially stable with positive net assets but exhibits signs of cash flow strain and slim working capital margins. To improve financial health, the company should focus on accelerating debtor collections, increasing cash reserves, and enhancing profitability through cost control. With these actions, the company can strengthen its liquidity and build a more resilient financial position for future growth.

MYDATA-T LTD - Analysis Report

Company Number: 12467402

Analysis Date: 2025-07-20 17:15 UTC

Financial Health Assessment Report for MYDATA-T LTD

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1. Financial Health Score: C

Explanation: MYDATA-T LTD demonstrates moderate financial stability with positive net current assets and shareholder funds, but exhibits symptoms of cash flow constraints and modest profitability challenges. The company’s equity base is intact; however, the limited cash reserves relative to liabilities and fluctuating working capital suggest cautious monitoring and operational improvements are necessary.

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2. Key Vital Signs

Metric	2023 Value	Interpretation
Share Capital	£100,000	Solid base of invested capital, stable equity.
Cash at Bank	£51,360	Low cash relative to current liabilities; indicates "weak pulse" in liquidity.
Current Assets	£428,908	Healthy buffer but largely tied up in debtors.
Debtors	£377,548	High receivables may indicate slow collections—"symptom of cash flow congestion."
Current Liabilities	£418,073	High short-term obligations; care needed to meet these as they fall due.
Net Current Assets	£10,835	Positive but slim working capital margin; "borderline healthy."
Total Equity (Shareholders Funds)	£14,906	Positive net assets but reduced from prior years; signals "wear and tear" on capital.
Tangible Fixed Assets	£4,071	Modest investment in fixed assets; consistent with service-oriented business.
Operating Lease Commitments (next year)	£19,602	Fixed future cash outflows that reduce flexibility.

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3. Diagnosis

• Liquidity ("Cash Flow Health"): The company shows a low cash reserve (£51k) compared to liabilities due within a year (£418k). The major portion of current assets is tied up in trade debtors (£150k) and other debtors (£227k), suggesting slow cash conversion cycles. This is a "symptom of distress" that could restrict operational agility and timely payments.

• Working Capital: The positive net current assets (£10,835) indicate that current assets exceed current liabilities, but the margin is narrow, reflecting a fragile liquidity position. Past years showed similar trends with very low working capital, indicating a chronic "tight liquidity syndrome."

• Profitability and Reserves: The company carries a negative retained earnings (P&L reserves at -£85k), which indicates accumulated losses. However, the share capital remains at £100k, buffering the equity base. This implies the company is in a "recovery phase" but has yet to build up sustainable profits.

• Asset Management: Tangible fixed assets are minimal (£4k), consistent with the company’s data processing and hosting service activity. This suggests a "light asset" model, relying more on human capital and intangibles.

• Debt and Obligations: Current liabilities remain high but have decreased from 2022 (£515k down to £418k), showing some improvement in managing short-term debts. However, the company must maintain vigilance to avoid liquidity crises.

• Growth and Stability: The company’s total assets less current liabilities increased slightly, and shareholder funds improved from 2022 to 2023 (£8,716 to £14,906), indicating slow but positive progress.

• Governance: Directors and significant controllers are stable, with no adverse records noted, supporting operational continuity.

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4. Recommendations

• Improve Cash Flow Management:
  Accelerate debtor collections and tighten credit terms to convert receivables into cash faster. Consider incentivising early payments or factoring receivables if appropriate.

• Increase Cash Reserves:
  Build a stronger cash buffer to withstand short-term obligations comfortably. This may involve negotiating better payment terms with suppliers or securing short-term financing as a safety net.

• Cost Control and Profitability:
  Review operating expenses, especially lease commitments (£19.6k annually), and explore cost efficiencies. Enhancing profitability will reduce reliance on capital injections and strengthen reserves.

• Working Capital Optimization:
  Monitor stock levels (if applicable) and manage payables strategically without damaging supplier relationships to maintain positive net current assets.

• Financial Forecasting and Monitoring:
  Implement regular financial health checks and cash flow forecasts to detect early signs of distress and take corrective action promptly.

• Strategic Growth:
  Given the company operates in data processing and hosting, explore digital service expansion and customer base diversification to boost revenue streams.

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Medical Analogy Summary

MYDATA-T LTD’s financial health shows a patient with a stable but fragile heart rate: equity is present and positive, but the blood flow (cash) is somewhat sluggish due to delayed receivables. The company’s "circulatory system" (working capital) is functional but narrowly balanced, requiring attentive care to avoid a liquidity "crisis." With disciplined cash flow management and cost control, the company can strengthen its "immune system" and promote healthier financial vitality.

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