CLARKE & CO. LIMITED

Executive Summary

CLARKE & CO. LIMITED has shown significant financial improvement from a negative net asset position in 2021 to a strong positive equity and working capital status in 2024, reflecting financial resilience and operational recovery. The company demonstrates healthy balance sheet indicators but should focus on improving cash flow and debtor management to ensure sustainable liquidity. Continued vigilance and strategic planning will support ongoing financial wellness.

CLARKE & CO. LIMITED - Analysis Report

Company Number: 12633196

Analysis Date: 2025-07-29 14:45 UTC

Financial Health Assessment for CLARKE & CO. LIMITED
(as of financial year ending 31 May 2024)

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1. Financial Health Score: B

Explanation:
CLARKE & CO. LIMITED demonstrates a solid recovery and strengthening in its financial position over recent years, moving from a negative net asset position in 2021 to a healthy positive net asset and working capital balance in 2024. The company's net current assets and shareholders' funds have shown significant improvement, indicating stronger financial stability and liquidity. However, the relatively low cash balance compared to debtors and limited turnover information suggest some caution. Overall, the company shows signs of financial wellness but has room for improvement in cash management and operational scale.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Net Current Assets	25,204	Healthy working capital; current assets exceed current liabilities, indicating good short-term liquidity.
Current Assets	24,566	Mainly comprises debtors (£21,441) and cash (£3,125). High debtors relative to cash could signal collection risk or cash flow timing issues.
Current Liabilities	638 (negative)	Very low short-term liabilities, which supports good liquidity and low immediate financial stress.
Net Assets (Equity)	25,204	Positive net assets show the company has built equity and financial resilience since 2021's negative position.
Share Capital	1.00	Minimal share capital typical for a private limited company; equity mainly accumulated profits.
Profit and Loss Reserve	25,203	Accumulated retained earnings, indicating profitability or capital injections over the years.
Cash on Hand	3,125	Relatively low cash buffer compared to receivables; potential symptom of cash flow timing issues.
Debtors	21,441	Significant amount tied up in receivables, indicating potential delays in cash conversion.

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3. Diagnosis

CLARKE & CO. LIMITED's financial vital signs reveal a company that has emerged from early financial "symptoms of distress" (negative net assets and working capital in 2021) to a position of healthier financial "vitality" by 2024. The increase in net current assets and net assets signals a strengthening balance sheet and improved capacity to meet short-term obligations without stress.

The company’s current liabilities are minimal, which reduces liquidity risk. However, a large portion of current assets are debtors — money owed by customers — which poses some liquidity risk if collections are delayed. The relatively low cash balance compared to these receivables is a mild concern, akin to a patient with strong but uneven blood flow that requires monitoring.

Lack of employee count and turnover data limits insight into operational scale and efficiency, but the growing retained earnings suggest the company is either profitable or has been supported by capital injections. Being classified under "Other business support service activities not elsewhere classified" means revenue streams may be diverse but also potentially irregular.

The presence of two directors with significant control and professional backgrounds (solicitors) suggests sound governance, but no explicit information on revenue or profitability margins is available to assess operational health deeper.

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4. Recommendations

To further enhance financial wellness and ensure sustainable health, CLARKE & CO. LIMITED should consider the following steps:

• Improve Cash Flow Management:
  Focus on accelerating debtor collections to convert accounts receivable into cash more rapidly. This will improve liquidity and reduce reliance on low cash reserves.

• Monitor Debtor Credit Quality:
  Regularly review the age and quality of receivables to avoid symptoms of financial distress caused by bad debts or delayed payments.

• Increase Cash Reserves:
  Building a stronger cash buffer will help the company withstand short-term shocks and maintain operational flexibility, like a healthy heart maintaining steady circulation.

• Expand Financial Transparency:
  Providing detailed turnover, profit & loss, and cash flow statements will enable deeper diagnostic insight and better decision-making.

• Strategic Growth Planning:
  With healthy equity and working capital, the company may explore targeted investments or expansion opportunities, but should balance growth with maintaining liquidity.

• Regular Financial Health Checks:
  Conduct periodic reviews to track financial vital signs and detect early symptoms of distress, enabling timely interventions.

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