TEC:VISION LTD

Executive Summary

TEC:VISION LTD demonstrates a solid liquidity foundation with improved cash and reduced liabilities, signaling good financial health. The significant drop in receivables requires attention to confirm it reflects positive cash flow rather than declining sales. Continued vigilance on profitability and client diversification will support sustainable growth.

TEC:VISION LTD - Analysis Report

Company Number: 13028509

Analysis Date: 2025-07-20 13:32 UTC

Financial Health Assessment: TEC:VISION LTD (As of 30 November 2023)

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1. Financial Health Score: B

Explanation:
TEC:VISION LTD demonstrates a moderately healthy financial position with improving liquidity and stable net current assets. The company has maintained positive working capital and increased shareholder funds year on year. However, some caution is warranted due to a significant reduction in debtors and a reliance on cash reserves, which may indicate challenges in revenue recognition or client payments. The absence of an income statement limits insight into profitability trends.

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2. Key Vital Signs

Metric	2023	2022	Interpretation
Current Assets	£125,134	£260,783	Healthy short-term asset base but has declined sharply from prior year, mainly due to drop in debtors.
Cash	£113,134	£64,629	Strong improvement in cash reserves, indicating better liquidity and cash flow management.
Debtors	£12,000	£196,154	Significant drop in receivables, which may reflect improved collections or reduced sales. Needs monitoring.
Current Liabilities	£73,068	£226,385	Large decrease, improving short-term solvency and easing pressure on working capital.
Net Current Assets	£52,066	£34,398	Positive and increasing, indicating sufficient liquid assets to cover short-term obligations.
Shareholders’ Funds	£52,066	£34,398	Increased equity base shows retained profits or capital injections, strengthening financial stability.
Average Employees	1	1	Small operational scale, typical for micro or small company category.

Interpretation of Vital Signs:

• Liquidity: The company's "pulse" is stronger with cash increasing nearly 75%, reflecting healthier cash flow and buffer for day-to-day operations.
• Receivables: The "symptom" of drastically reduced debtors suggests either better credit control or possibly decreased sales activity—this requires further investigation.
• Solvency: Reduced current liabilities ease immediate financial stress, improving the "breathing" of the business.
• Equity: Growing shareholders’ funds is a "sign of recovery and growth," implying retained earnings or capital injections.

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3. Diagnosis

TEC:VISION LTD presents the "vital signs" of a company with improving liquidity and working capital management. The strong cash position and reduced liabilities suggest it has strengthened its "financial resilience." However, the stark decline in receivables from £196k to £12k could be a double-edged sword—either indicating faster cash collection (positive) or possibly a decrease in sales volume or delayed revenue recognition (negative).

The company is small-scale with only one employee, which aligns with its industry classification in IT consultancy and software development. The balance sheet shows no fixed assets, implying a service-oriented business with limited capital investment.

The absence of an income statement means we cannot fully assess profitability or margins, which are critical for a complete diagnosis. The company’s "immune system" looks stable, but the lack of detailed profit and loss data is a "blind spot" in understanding overall health.

The company meets the small company exemption thresholds and has filed accounts on time, indicating compliance and good administrative "hygiene."

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4. Recommendations

• Investigate Revenue Trends: Examine the underlying causes for the substantial drop in trade debtors. Is this due to improved collection efforts, reduced sales, or changes in customer payment terms? Understanding this is crucial for forecasting future cash flows and growth potential.
• Profitability Monitoring: Since the income statement has not been filed (due to small company exemptions), management should internally monitor profit margins and operating expenses to ensure sustainable growth.
• Cash Flow Management: Maintain the healthy cash reserves and continue prudent management of working capital to avoid liquidity "crises."
• Diversify Client Base: To strengthen long-term financial health, consider diversifying clients and contracts to reduce dependency risk and stabilize receivables.
• Strategic Growth Planning: With positive equity growth, explore opportunities for investment in technology, marketing, or personnel to support scaling the business.
• Regular Financial Reviews: Conduct quarterly financial health checks including cash flow forecasts, debtor aging analysis, and liability management to catch early symptoms of distress.
• Consider Audit or Review: Although not mandatory, an audit or external review might provide additional assurance to stakeholders and help uncover hidden risks.

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Executive Summary

TEC:VISION LTD shows a strong liquidity position with improved cash reserves and reduced short-term liabilities, indicating good financial "vital signs." However, the sharp fall in trade debtors warrants further investigation to understand its impact on revenue sustainability. Overall, the company is financially stable but should closely monitor profitability and cash flow to ensure continued health and growth.