Company Number: 14330590

Analysis Date: 2025-07-29 20:42 UTC

Financial Health Assessment for CLEAN BRAND MANAGEMENT LTD

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1. Financial Health Score: C

Explanation:
The company shows some concerning signs of financial stress as of the latest financial year (2024). While it remains solvent with positive net assets, the deterioration in working capital and a significant drop in shareholders’ funds compared to prior years indicate emerging liquidity pressures. The score "C" reflects a borderline healthy status, with warning symptoms that warrant close monitoring and proactive management.

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2. Key Vital Signs

Metric	2024 Value (£)	2023 Value (£)	Interpretation
Fixed Assets	3,907	5,760	Slight decrease; relatively low long-term investment, typical for a micro company.
Current Assets	43,963	27,084	Increased cash or receivables; positive sign for short-term liquidity.
Current Liabilities	46,390	26,904	Nearly doubled current liabilities; red flag for liquidity and short-term obligations.
Net Current Assets (Working Capital)	-2,427	180	Negative working capital in 2024 indicates possible short-term cash flow stress.
Total Assets Less Current Liabilities	1,480	5,940	Sharp decline suggests less buffer after settling short-term debts.
Net Assets (Equity)	932	5,415	Significant reduction in net assets; possible losses or depletion of reserves.
Shareholders’ Funds	932	5,415	Mirrors net assets; equity base shrinking, indicating potential erosion of owner’s capital.
Advances to Directors	27,417 (2024)	Not reported	High director loans suggest reliance on insider funding to support operations.
Number of Employees	2 (2024)	1 (2023)	Slight increase; staffing remains minimal, consistent with micro company status.

Interpretation of Vital Signs:

• The negative working capital is a symptom of liquidity distress, signaling that current liabilities exceed current assets and the company may struggle to meet short-term obligations without new financing or cash inflows.
• The steep drop in net assets and shareholders’ funds suggests that the company has likely experienced losses or significant expenses eroding its capital base over the last year.
• The increase in advances to directors indicates the company may be relying on director loans to plug funding gaps, which is a warning sign of underlying cash flow challenges.

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3. Diagnosis

Underlying Financial Condition:
CLEAN BRAND MANAGEMENT LTD is showing symptoms of financial stress primarily due to liquidity pressures and erosion of shareholder equity. The company’s working capital has turned negative, indicating that its short-term debts now exceed its short-term assets. This "cash flow distress" could risk the company's ability to pay suppliers or creditors promptly, which might strain business relationships and operational continuity.

The large increase in current liabilities relative to assets, alongside a reduction in net assets, may be the result of operating losses or increased borrowing. The company relies on director advances, which, while beneficial in the short term, is not a sustainable source of funding for healthy growth.

However, the company remains active with positive net assets, which means it is not insolvent but is in a fragile financial state that requires urgent attention to prevent deterioration into more severe distress phases such as insolvency or liquidation.

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4. Recommendations

To improve the company’s financial wellness and strengthen its “financial immune system,” the following actions are advised:

1. Improve Working Capital Management:

   • Review and accelerate debtor collections to improve cash inflows.
   • Negotiate extended payment terms with creditors to ease immediate outflows.
   • Monitor inventory levels to avoid excess stock tying up cash.

2. Reduce Reliance on Director Loans:

   • Seek external financing options such as small business loans or investor capital to diversify funding sources and reduce risk concentration.
   • Formalize director loan agreements with clear repayment plans and interest terms to ensure transparency.

3. Cost Control and Profitability:

   • Conduct a detailed expense review to identify and reduce non-essential costs.
   • Explore opportunities to increase sales or pricing adjustments to improve profitability.

4. Financial Reporting and Forecasting:

   • Implement regular cash flow forecasting to anticipate liquidity gaps and plan corrective actions early.
   • Maintain up-to-date financial records to enable timely decision-making.

5. Engage Professional Advice:

   • Consider consulting with a financial advisor or turnaround specialist to develop a comprehensive recovery plan.
   • Keep up with filing deadlines to avoid penalties and maintain good standing.

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