CLAY TECHNOLOGY LTD

Executive Summary

CLAY TECHNOLOGY LTD shows stable liquidity and low short-term liabilities, reflecting a healthy cash flow position. However, declining equity and minimal capital highlight limited financial resilience and growth potential. Strengthening equity and boosting operational activity are key to improving future financial health.

CLAY TECHNOLOGY LTD - Analysis Report

Company Number: 12830609

Analysis Date: 2025-07-20 16:07 UTC

Financial Health Assessment for CLAY TECHNOLOGY LTD

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1. Financial Health Score: C

Explanation:
CLAY TECHNOLOGY LTD shows a modest but stable financial position with low asset and liability levels typical of a small private limited company. The company maintains healthy liquidity with cash balances consistently exceeding current liabilities, indicating a "healthy cash flow" symptom. However, the declining net assets over recent years and minimal shareholder capital suggest limited financial robustness and growth capacity. This results in a middling grade reflecting stability but constrained financial strength.

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2. Key Vital Signs:

Metric	2024 Value (£)	Interpretation
Current Assets	4,282	Mostly cash, indicating liquid assets available.
Cash at Bank	4,282	Strong immediate liquidity, no cash crunch.
Debtors	0	No outstanding receivables; potential slow down in sales or operations.
Current Liabilities	120	Very low short-term obligations; manageable.
Net Current Assets	4,162	Positive working capital, "healthy cash flow."
Net Assets	4,162	Declining from £6,136 in 2023, a sign of some erosion in equity.
Share Capital	100	Minimal capital, typical for micro or small firms.
Profit and Loss Reserve	4,062	Retained earnings have declined, possibly due to losses or drawings.
Employee Count	1	Very small scale operation, limited workforce.

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3. Diagnosis:

CLAY TECHNOLOGY LTD is a small, single-director consultancy firm operating under a private limited company structure. The "symptoms" of its financial health are:

• Stable liquidity: The company maintains a consistently positive net current asset position, with cash covering all current liabilities comfortably. This is akin to a patient with a strong pulse and good blood circulation—indicating no immediate liquidity distress.
• Declining equity: Net assets have fallen from £6,136 to £4,162, which signals that the company’s "reserves" or accumulated retained earnings are shrinking. This could be due to operational losses, director drawings, or reinvestment shortfalls.
• Minimal growth indicators: The absence of debtors in the latest year and a reduction in current assets suggest a possible slowdown in business activity or reduced credit sales. This is similar to a patient eating less or reducing activity—possibly a sign of cautious business environment or reduced market demand.
• Limited capital base: With only £100 in share capital, the company has very limited financial cushioning to absorb shocks or invest in growth initiatives.

Overall, the company appears financially "stable" but "weak" in growth potential and resilience to external shocks. The financial structure is typical for a micro-business, with limited complexity and low financial stress symptoms.

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4. Recommendations:

To improve the financial wellness and vitality of CLAY TECHNOLOGY LTD, consider the following:

• Increase capital base: Inject additional equity to strengthen the company’s financial "immune system," allowing for investment in growth and cushioning against downturns.
• Boost operational activity: Explore new client acquisition or service expansion to grow revenue, which will increase debtors (receivables) and cash inflows, improving working capital health.
• Monitor cash flow rigorously: Maintain strong cash management practices to ensure liquidity remains robust and avoid any "symptoms" of cash flow distress.
• Reduce reliance on director loans: The previous year showed a director loan receivable which was repaid in 2024; continuing this trend will keep the balance sheet cleaner and reduce internal financial dependencies.
• Plan for growth investment: With limited assets and equity, strategic reinvestment into marketing, technology, or human resources could stimulate revenue growth and improve profitability.
• Regular financial reviews: Frequent analysis of financial metrics will help detect early signs of distress and enable timely interventions.

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