CLARENCE COMMERCIAL CONSULTING LTD

Executive Summary

Clarence Commercial Consulting Ltd shows early signs of financial strain with negative working capital and equity, typical of a start-up in its initial year. Immediate capital injection and focused cash flow management are critical to stabilize the business. With proactive financial controls and growth in consultancy revenues, the company’s financial health can improve significantly.

CLARENCE COMMERCIAL CONSULTING LTD - Analysis Report

Company Number: 15470937

Analysis Date: 2025-07-29 17:54 UTC

Financial Health Assessment of Clarence Commercial Consulting Ltd

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1. Financial Health Score: D

Explanation:
The company currently exhibits signs of financial distress, primarily due to a negative net asset position and net current liabilities. While it is too early to fully assess future performance given the company’s recent incorporation (Feb 2024), the initial financial snapshot suggests the company is operating with a liquidity shortfall and negative equity. These are symptoms that require close monitoring and corrective action.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Current Assets	101	Very low cash reserves indicating limited liquidity.
Current Liabilities	675	Short-term debts exceed available liquid assets.
Net Current Assets (Working Capital)	-574	Negative working capital indicates cash flow strain.
Net Assets (Equity)	-574	Company’s liabilities exceed total assets; negative equity flagged.
Share Capital	1	Minimal share capital; limited shareholder buffer.
Number of Employees	1 (Director)	Micro-sized operation, likely founder-managed.

Interpretation of Vital Signs:

• Negative Working Capital (-£574): This is akin to a patient having a weak pulse—there is insufficient short-term asset coverage to meet imminent liabilities. The company may face difficulties paying suppliers or meeting other short-term obligations without additional funding or revenue inflows.
• Negative Equity: The company’s liabilities currently exceed its assets by £574, which is a symptom of financial strain. This is a warning sign as it indicates the business is technically insolvent on a balance sheet basis.
• Minimal Cash (£101): The cash on hand is very low, meaning the company has limited immediate resources to cover daily operational expenses or unexpected costs.

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3. Diagnosis

Clarence Commercial Consulting Ltd is in the very early stages of its business life cycle (incorporated in February 2024). The financial statements for its first year ending February 2025 reveal symptoms consistent with a start-up in its infancy, including very limited resources and a negative net asset position. Given the company's small scale and zero operating history beyond the first year, the negative working capital and equity are not uncommon but remain concerning "symptoms of distress" that could hamper growth or operational continuity if not addressed.

The company’s financial “vital signs” suggest it is currently undercapitalized and reliant on additional funding or rapid revenue generation to restore financial health. The director’s sole ownership and control indicates streamlined decision-making but also means the business’s fate is closely tied to the founder’s ability to inject capital or generate income.

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4. Recommendations

• Capital Injection: To improve the company’s “financial pulse,” an immediate infusion of additional funds from the director or external investors is essential to cover current liabilities and build a financial buffer. This will help restore positive working capital and equity levels.
• Cash Flow Management: Implement rigorous cash flow forecasting and management to avoid liquidity shortfalls. Prioritize collection of receivables and manage payables strategically to maintain a healthy cash flow cycle.
• Revenue Generation: Accelerate business development efforts to generate consistent revenues. Given the industry (management consultancy), focus on securing contracts or retainers to stabilize income streams.
• Cost Control: Keep overheads and discretionary expenses low to conserve cash during this fragile stage. Every pound saved contributes to improving the company’s financial “immune system.”
• Regular Financial Monitoring: Establish monthly financial health checks to monitor liquidity, working capital, and equity trends. Early detection of negative trends can prompt timely corrective measures.
• Consider Professional Advice: Engage with financial advisors or accountants experienced in start-up consulting firms to optimize tax reliefs, funding options, and financial structure.

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