CL CONNELL LTD

Executive Summary

CL CONNELL LTD currently demonstrates a fragile financial state with zero net assets and no working capital buffer, reflecting a break-even but vulnerable position typical of a very young micro-entity. While it holds adequate current assets to meet immediate liabilities, the lack of financial cushion leaves the company exposed to liquidity risks. Focused efforts on building equity, managing cash flow, and scaling operations are essential to improve its financial health and ensure sustainable growth.

CL CONNELL LTD - Analysis Report

Company Number: 14192928

Analysis Date: 2025-07-29 16:07 UTC

Financial Health Assessment for CL CONNELL LTD

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1. Financial Health Score: D

Explanation:
CL CONNELL LTD exhibits a fragile financial condition with a net asset position at zero, indicating the company currently breaks even without any buffer. The absence of net current assets (working capital) signals no financial cushion to cover short-term liabilities. Given the micro-entity status and very limited financial activity, the company’s financial health is weak and warrants attention to avoid distress.

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2. Key Vital Signs

Vital Sign	Value	Interpretation
Current Assets	£32,112	Sufficient cash or receivables, which is a positive sign ("healthy cash inflow").
Current Liabilities	£32,112	Equal short-term obligations offsetting current assets, no excess liquidity ("no cash buffer").
Net Current Assets	£0	Working capital is zero, indicating no margin for operational flexibility.
Net Assets (Equity)	£0	No residual value after liabilities, implies no financial cushion or retained earnings.
Shareholders’ Funds	£0	No equity capital beyond liabilities, indicating break-even equity position.
Employees	1	Very small scale, low fixed overhead burden.
Account Category	Micro	Minimal filing requirements but limited financial scale and resources.
Company Age	Less than 2 years	Early-stage company, possibly still in a startup or development phase.

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3. Diagnosis: What the Numbers Reveal

The financial "vital signs" reveal symptoms of financial fragility. While the company holds current assets of £32,112, these are entirely matched by current liabilities, resulting in zero net working capital. This means the company has no liquidity cushion to absorb unexpected expenses or delays in cash inflows—akin to a patient with stable but no reserve blood pressure.

The net asset position of zero suggests no retained earnings or equity buffer to support growth or withstand financial shocks. The company’s micro-entity status and single employee indicate a very small operational footprint, which is typical at this early stage but also highlights limited capacity to generate substantial revenues or profits yet.

The absence of audit requirements and reliance on the small companies regime means financial statements are simplified, but also that transparency on profitability and cash flows is limited. The company may be in a "startup incubation" phase with minimal transactions, reflected in the flat balance sheet.

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4. Recommendations: Steps to Improve Financial Wellness

1. Build Working Capital Buffer:
   Aim to increase current assets relative to liabilities to create a positive net current asset position. This can be achieved by managing payables and receivables efficiently or injecting additional capital.

2. Increase Equity Funding:
   Consider equity investment from shareholders or external sources to build net assets and provide a financial cushion.

3. Monitor Cash Flows Closely:
   Implement strict cash flow management to avoid liquidity stress—think of it as regular vital sign monitoring to catch early symptoms of distress.

4. Focus on Revenue Generation:
   With only one employee and micro scale, prioritise scaling sales or service delivery to improve profitability and retained earnings.

5. Plan for Contingencies:
   Develop contingency plans for periods of low cash inflow, considering short-term credit facilities or cost controls.

6. Maintain Compliance and Timely Filings:
   Continue to ensure all statutory filings are timely and accurate to avoid penalties that could exacerbate financial strain.

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