C J CHALLONER CLEANING LTD

Executive Summary

C J Challoner Cleaning Ltd shows improving net asset value and asset investment but is constrained by ongoing negative net current assets and reliance on director financing. While regulatory compliance is maintained, liquidity pressures pose moderate solvency risks. Further financial and operational details are needed to fully assess sustainability.

C J CHALLONER CLEANING LTD - Analysis Report

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.