CL HEALTH SOLUTIONS LIMITED

Executive Summary

CL HEALTH SOLUTIONS LIMITED is currently facing significant liquidity and solvency challenges, as evidenced by negative working capital and erosion of shareholders’ funds. Immediate actions to improve cash flow, secure capital, and manage costs are essential to restore financial health. Without intervention, the company’s financial condition may deteriorate further, risking operational viability.

CL HEALTH SOLUTIONS LIMITED - Analysis Report

Company Number: 14458922

Analysis Date: 2025-07-29 13:03 UTC

Financial Health Assessment for CL HEALTH SOLUTIONS LIMITED (as at 30 November 2024)

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1. Financial Health Score: D

Explanation:
The company exhibits significant signs of financial distress. While it holds some fixed assets, its current liabilities substantially exceed its current assets, resulting in negative working capital and net assets. This indicates liquidity challenges and potential solvency issues, warranting a cautious rating. The business is at an early stage (incorporated late 2022), which can explain some volatility, but the current financial position signals urgent need for remedial action.

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2. Key Vital Signs

Metric	2024 (£)	Interpretation
Fixed Assets	2,905	Presence of tangible assets (plant and machinery) valued modestly; positive sign of investment.
Current Assets	356	Very low short-term resources available, down sharply from £3,263 the prior year.
Current Liabilities	6,550	Liabilities due within one year have doubled compared to 2023, indicating growing short-term debt.
Net Current Assets (Working Capital)	-6,194	Negative by a large margin; symptoms of liquidity distress—company may struggle to meet short-term obligations.
Net Assets (Shareholders’ Funds)	-3,289	Negative net worth; indicates creditors’ claims exceed assets, a serious warning sign.
Shareholders’ Funds	-3,289	Mirror of net assets; shows erosion of invested capital.
Cash Position	Not separately reported but inferred low given current assets of £356.	Cash is insufficient to cover liabilities.

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3. Diagnosis: Financial Condition

• Liquidity Crisis: The company’s "vital signs" reveal a "symptom" of acute liquidity distress — current liabilities nearly 20 times the current assets. This means the company’s "blood flow" (cash and liquid assets) is severely restricted, risking inability to pay immediate debts or suppliers.

• Solvency Concerns: The company’s net assets have moved from a positive £31 in 2023 to a negative £3,289 in 2024. This erosion of equity suggests the business is "unwell" financially, with liabilities exceeding the total value of assets owned—a state akin to "organ failure" in medical terms.

• Early Stage & Investment: The company is newly incorporated (November 2022) and classified as a micro-entity. It invested in fixed assets (£2,905 net book value), likely to support operations. However, the lack of employees and low current assets imply limited operational activity or revenue generation so far.

• No Audit Requirement: The company qualifies for micro-entity financial reporting standards and is unaudited, so detailed financial scrutiny is limited. However, the large negative working capital is an unmistakable red flag.

• Director Control: Fully controlled by Mr Carmelo Lorenzano, which can simplify decision-making but also concentrates risk.

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4. Recommendations: Path to Financial Wellness

• Immediate Cash Flow Management:
  The company needs to urgently improve cash flow to address its short-term liabilities. This could include negotiating extended payment terms with creditors, accelerating receivables, or securing short-term financing.

• Capital Injection:
  Consider additional equity funding or shareholder loans to restore positive net assets and provide a buffer against insolvency risks.

• Operational Review:
  Evaluate business model viability and revenue streams. The absence of employees and minimal current assets suggest limited trading activity; strategic pivot or scaling operations may be needed.

• Cost Control:
  Review and reduce fixed and variable costs to preserve cash. Avoid unnecessary capital expenditures until liquidity improves.

• Regular Financial Monitoring:
  Implement monthly cash flow forecasts and financial health checks to detect and address symptoms of distress early.

• Professional Advice:
  Engage with financial advisors or turnaround specialists to explore restructuring or refinancing options if cash flow remains constrained.

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Medical Analogy Summary:

CL HEALTH SOLUTIONS LIMITED shows "symptoms" of financial distress characterized by a "poor circulatory system"—insufficient cash and liquid assets to meet immediate obligations, and a "weakened heart" reflected in negative net assets. Without prompt intervention—akin to emergency treatment for a patient in critical condition—the business risks progressing to insolvency.

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