Company Number: 13659802

Analysis Date: 2025-07-20 17:57 UTC

Financial Health Assessment for CLEAN INC CONTRACTS LIMITED

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1. Financial Health Score: C

Explanation:
The company demonstrates some signs of recovery after previous financial distress but still faces liquidity challenges. The net current liabilities and negative working capital represent symptoms of financial strain, although a positive turnaround in net assets is a hopeful sign. The business is still in a fragile state and requires careful management.

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2. Key Vital Signs

Metric	2023 Value (£)	Interpretation
Fixed Assets	13,415	Presence of intangible (goodwill) and tangible assets. Indicates investment but goodwill can be intangible and less liquid.
Current Assets	17,124	Includes cash and debtors; a decrease from previous year.
Cash	16,176	Healthy cash reserve but reduced since last year, signaling less liquidity buffer.
Debtors	948	Steady but low; low receivables may indicate prompt collections or small sales volume.
Current Liabilities	28,571	Increased liabilities, notably creditors and director loans, putting pressure on short-term obligations.
Net Current Assets	-11,447	Negative working capital—company owes more than it owns in the short term, a key symptom of liquidity stress.
Net Assets	1,968	Positive equity after previous negative position; indicates some financial healing.
Share Capital	2	Minimal share capital, typical for small private companies.
Employees	2	Small workforce consistent with micro/small business status.

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3. Diagnosis

• Liquidity and Working Capital:
  The company shows symptoms of liquidity strain, with net current liabilities of £11,447. This means the firm does not have enough short-term assets to cover its immediate debts, which is a classic sign of financial distress that requires close monitoring. Cash reserves have dropped significantly from £22,750 to £16,176, indicating cash flow is tightening.

• Asset Structure:
  The presence of intangible fixed assets (goodwill of £12,200) suggests acquisitions or brand value investments. While goodwill can be valuable, it is not easily converted to cash in a crisis, so the tangible asset base is quite small (£1,215).

• Profitability and Equity:
  The company moved from a negative net asset position in 2022 (-£1,226) to a slightly positive one (£1,968) in 2023. This is a positive sign that the company may be returning to profitability or reducing losses, though the margin remains thin.

• Funding and Capitalization:
  With only £2 in share capital and director loans appearing as part of liabilities, the business relies heavily on external short-term financing and internal support. This may be a symptom of undercapitalization.

• Business Activity:
  Operating in the washing and dry-cleaning of textiles sector, the company’s small scale (2 employees) and modest asset base align with a micro-business profile. The company is active and compliant with filings, indicating good governance.

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4. Recommendations

To restore and improve the company’s financial wellness, consider the following steps:

• Improve Liquidity Management:
  Tighten control over cash flow by accelerating debtor collections, negotiating longer payment terms with creditors, and minimizing unnecessary expenses. Aim to move net current assets into positive territory.

• Strengthen Capital Structure:
  Consider injecting additional equity capital or converting director loans into equity to reduce short-term liabilities and improve the balance sheet strength.

• Monitor Goodwill Asset:
  Review the recoverability and justification of the goodwill asset to ensure it reflects real value and does not mask underlying business risks.

• Enhance Profitability:
  Focus on increasing revenues and controlling costs to build retained earnings, thereby improving shareholders’ funds and financial resilience.

• Maintain Regulatory Compliance:
  Continue to file accounts and confirmation statements on time to avoid penalties and maintain good standing with Companies House.

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Medical Analogy Summary:

CLEAN INC CONTRACTS LIMITED currently exhibits symptoms of financial distress akin to a patient with low blood pressure (liquidity) and a weakened immune system (thin equity base). While there are early signs of recovery (positive net assets), the company remains vulnerable without immediate intervention to strengthen its cash flow and capital reserves. With targeted treatment—improved cash management and capital support—the prognosis can shift towards a healthier financial state.

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