Company Number: 14188196

Analysis Date: 2025-07-29 14:15 UTC

Financial Health Assessment for CLAREMORRIS CONSULTANCY LTD

---

1. Financial Health Score: D

Explanation:
The company shows signs of financial distress with deteriorating net assets and liquidity issues over recent years. While there was a strong start in 2022, the financial position has worsened significantly, culminating in negative net assets and a net current liability position in the latest year. This grade reflects a fragile financial state that requires urgent attention.

---

2. Key Vital Signs

Metric	2022 (£)	2023 (£)	2024 (£)	2025 (£)	Interpretation
Fixed Assets	-	-	0	1	Negligible fixed assets, typical of a micro entity consultancy.
Current Assets	33,263	10,445	10,445	163	Drastic drop in liquid assets, indicating declining cash reserves.
Current Liabilities	16,516	7,168	12,041	7,695	High short-term obligations remain; some volatility noted.
Net Current Assets	16,747	5,572	-1,596	-4,710	Shift from strong working capital to a worrying negative balance.
Net Assets (Equity)	16,141	1,630	-1,630	-12,440	Equity turned negative, signaling insolvency symptoms.
Shareholders Funds	16,141	1,630	-1,630	-12,440	Mirror net assets; indicates retained losses accumulating.

Interpretation of Vital Signs:

• Healthy Cash Flow: Initially present with high current assets vs liabilities in 2022.
• Symptoms of Distress: By 2024 and 2025, the company shows negative net current assets and net liabilities, a red flag indicating inability to cover short-term debts comfortably.
• Negative Equity: Implies accumulated losses exceeding capital, a critical warning sign of financial instability.

---

3. Diagnosis

The company began with a relatively healthy financial position in its first year (2022), showing strong working capital and positive equity. However, in the years following, the financial health deteriorated significantly. The recorded net assets have swung from positive to deeply negative by 2025 (£-12,440), alongside a sharp decline in current assets from £33,263 to just £163, signalling a severe liquidity crunch.

Negative working capital (net current assets) in the last two years indicates the company may struggle to meet its short-term obligations on time, a symptom akin to a patient showing signs of acute distress. Moreover, the persistent negative net assets suggest the business is technically insolvent, implying liabilities exceed total assets.

The company is a micro entity with only one employee (the director), so operations are likely minimal, and the financial strain is possibly linked to insufficient revenue generation or escalating costs not supported by cash inflows.

---

4. Recommendations

To improve financial wellness and stabilize the business, the following specific actions are recommended:

• Cash Flow Management: Immediate focus on improving liquidity by accelerating receivables, delaying payables where possible, or injecting fresh capital to restore working capital.
• Cost Control: Review all expenses critically to reduce unnecessary costs and enhance operational efficiency.
• Revenue Generation: Explore new client acquisition strategies or diversify services to boost income streams.
• Capital Injection: Consider a shareholder loan or equity injection to restore positive net assets and reassure creditors.
• Financial Monitoring: Implement regular financial reviews (quarterly at minimum) to detect and address symptoms of financial distress early.
• Professional Advice: Engage a financial advisor to explore restructuring options or support in managing creditor relationships.
• Compliance and Reporting: Continue timely filing of accounts and returns to avoid penalties and maintain regulatory compliance.

If these steps are not taken promptly, the prognosis is poor, potentially leading to formal insolvency proceedings.

---