CLARIGEM LIMITED

Executive Summary

Clarigem Limited demonstrates operational compliance and maintains positive net assets, but recent financials reveal a weakening equity position and increased current liabilities, particularly tax-related. Liquidity remains sufficient for current obligations, supported by cash reserves, yet cash flow pressures are evident. Conditional credit approval is advised with ongoing monitoring of tax liabilities and cash flow dynamics to mitigate risk.

CLARIGEM LIMITED - Analysis Report

Company Number: 12831444

Analysis Date: 2025-07-20 14:49 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Clarigem Limited is a privately held employment placement agency with a modest asset base and limited staff (1 employee including the director). The company is active, compliant with filing deadlines, and has no adverse legal status. However, the financial trend over the last two years shows a significant decline in net assets (from £40,780 in 2023 to £19,231 in 2024) and net current assets (from £37,819 to £17,594), primarily driven by an increase in current liabilities, particularly taxation and social security obligations. The company’s ability to service debts depends heavily on its cash position and future profitability, which is not disclosed in detail but appears constrained given the reduced working capital. Approval is recommended on the condition of close monitoring of cash flow and liabilities, with particular attention to tax obligations and the director’s loan account.

2. Financial Strength:
   The balance sheet indicates low tangible fixed assets (£2,462) and a current asset base dominated by cash (£72,736). Debtors have dropped to zero from £4,912 previously, which may indicate either improved collections or reduced sales activity. Current liabilities have increased markedly to £55,142, largely due to taxation and social security liabilities (£52,895), which suggests accumulated tax debts or delayed payments. Shareholders’ funds have depreciated by more than 50% year-on-year, signaling a weakening equity buffer. The company remains solvent but with reduced financial strength and tighter liquidity.

3. Cash Flow Assessment:
   The company holds cash balances of £72,736, which covers current liabilities but with a reduced net working capital buffer of £17,594. The absence of trade debtors may reduce future cash inflows unless new contracts are secured. The increase in tax and social security payables could pressure cash flow if not managed proactively. The director has provided an interest-free loan (£577) repayable on demand, which could be a source of emergency liquidity but also reflects limited external funding. Overall, liquidity is adequate for current obligations but fragile, dependent on operational cash generation.

4. Monitoring Points:

• Track the evolution of taxation and social security liabilities to avoid potential enforcement or penalties.
• Monitor cash flow forecasts and actual cash position monthly to ensure adequate liquidity.
• Assess receivables generation and collection efficiency to improve working capital.
• Watch for any increases in director loan account or external borrowings indicating cash stress.
• Monitor profitability trends as indicated in future accounts or management reports to confirm ability to rebuild equity.