Company Number: 13153760

Analysis Date: 2025-07-20 13:58 UTC

1. Risk Rating: MEDIUM

Justification: C J Challoner Cleaning Ltd demonstrates a positive net asset position that has improved over recent years; however, persistent negative net current assets signal liquidity pressure. The company’s reliance on a directors loan account and current liabilities exceeding current assets pose solvency concerns that warrant monitoring.

2. Key Concerns:

• Negative Net Current Assets: The company has consistently reported net current liabilities (e.g., £-47,264 at 31 January 2024), indicating potential short-term liquidity strain to meet obligations as they fall due.
• Directors Loan Account Liability: A significant portion (£80,346) of current liabilities is attributable to the director’s loan account, which may reflect informal financing and could impact the company's financial flexibility.
• Limited Equity Base: Although equity increased to £52,434 in 2024, the initial share capital is minimal (£100), suggesting the company is relatively small and possibly capital constrained.

3. Positive Indicators:

• Increasing Net Assets: The company’s net assets have more than tripled from £14,190 in 2023 to £52,434 in 2024, indicating retained profits or capital injections improving the balance sheet.
• Asset Base Growth: Fixed assets increased to £105,050, showing investment in tangible and intangible assets (including goodwill), which may support operational capacity.
• No Overdue Filings: The company is timely with statutory accounts and confirmation statements, reflecting regulatory compliance and good governance practices.

4. Due Diligence Notes:

• Clarify the nature and terms of the director’s loan account, including repayment expectations and any formal agreements.
• Review cash flow statements and trading performance to assess the ability to convert current assets into cash to cover liabilities.
• Investigate revenue trends and profitability since the income statement is not provided, to evaluate operational sustainability.
• Confirm whether goodwill recognized relates to acquisitions and assess any impairment risks, given the amortisation charge.
• Verify adherence to accounting policies and the impact of any judgements or estimates on asset valuation, especially intangible assets.