TRADE TECH DIGITAL SOLUTIONS LTD

Executive Summary

TRADE TECH DIGITAL SOLUTIONS LTD shows troubling liquidity issues with a negative working capital position and worsening net assets. To avoid financial collapse, swift actions to improve cash flow and reduce short-term liabilities are crucial. Strategic financial restructuring and operational improvements are recommended for recovery.

TRADE TECH DIGITAL SOLUTIONS LTD - Analysis Report

Company Number: 13113246

Analysis Date: 2025-07-19 13:03 UTC

Financial Health Assessment of TRADE TECH DIGITAL SOLUTIONS LTD

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1. Financial Health Score: D

Explanation:
The company shows a concerning financial position with net current liabilities significantly exceeding current assets, indicating liquidity stress. While it has improved net assets year-on-year, the negative net current assets (working capital deficit) are a critical symptom of financial distress. The micro-entity scale limits complexity, but the current liabilities pressure overshadows other positives.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	4,062	2,283	Slight increase, but still low cash & receivables
Current Liabilities	14,708	8,532	High and increasing short-term debts
Net Current Assets (Working Capital)	-10,646	-6,249	Negative and worsening, a liquidity warning sign
Net Assets (Equity)	-10,646	-6,249	Negative equity indicates accumulated losses or liabilities exceeding assets
Average Number of Employees	2	0	Small workforce, typical for micro-entity

Interpretation:

• Healthy cash flow is challenged here: the company’s current obligations (debts due within one year) are nearly 4 times its current assets, a symptom of financial distress.
• Negative net assets show the company’s liabilities exceed its assets, a diagnostic marker of insolvency risk.
• Despite some growth in current assets, liabilities are growing faster, deepening the negative working capital.

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3. Diagnosis: Overall Financial Condition

The company is currently experiencing severe liquidity strain. Its working capital deficit means it may struggle to meet short-term obligations without additional financing or operational improvements. Negative net assets suggest accumulated losses or possibly undisclosed or off-balance sheet liabilities.

The increase in current liabilities year-on-year alongside modest asset growth signals an increasing burden of payables or short-term borrowing, while asset accumulation is insufficient to offset this. The small size and micro-entity status limit financial buffer capacity.

The company’s financial "pulse" is weak: it resembles a patient with low blood pressure (cash flow) and increasing "toxins" (liabilities) threatening organ function (business operations). Without intervention, this condition risks worsening, possibly leading to insolvency.

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4. Recommendations: Improving Financial Wellness

• Improve Cash Flow Management:
  Tighten receivables collection, negotiate longer payment terms with suppliers, and reduce discretionary spending to relieve short-term cash pressure.

• Restructure or Reduce Liabilities:
  Engage creditors to restructure payment plans or consolidate debts to reduce immediate liabilities.

• Increase Capital Injection:
  Consider new equity investment or director loans to bolster working capital and restore positive net assets.

• Operational Efficiency:
  Review cost structure and business operations to improve profitability and generate internal funds for debt servicing.

• Financial Monitoring:
  Implement regular cash flow forecasting and working capital analysis to catch early warning signs and adjust strategies proactively.

• Seek Professional Advice:
  Early consultation with insolvency practitioners or business turnaround specialists can provide tailored options to avoid insolvency.

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Executive Summary

TRADE TECH DIGITAL SOLUTIONS LTD is currently experiencing significant liquidity distress, evidenced by a growing deficit in working capital and negative net assets. Without prompt financial restructuring and cash flow improvement measures, the company faces heightened insolvency risk. Immediate action to manage liabilities and improve cash inflows is essential to restore financial health.