CLEANBEST LTD

Executive Summary

CLEANBEST LTD shows a stable but fragile financial position typical of a young micro-entity in cleaning services. While solvent and free of debt, the company's declining net assets and low liquidity signal the need for improved cash flow management and strategic asset utilization. With careful financial stewardship, the company can strengthen its resilience and support future growth.

CLEANBEST LTD - Analysis Report

Company Number: 13472003

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

Financial Health Assessment for CLEANBEST LTD (as of 30 June 2024)

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Financial Health Score: C

Explanation:
CLEANBEST LTD demonstrates a stable but subdued financial position typical of a micro-sized cleaning services company in its early years. The company shows no immediate distress signals such as liabilities or creditor pressure, but the declining net assets and reduced fixed assets suggest some operational or investment contraction. The lack of current liabilities is positive, but very low current assets and net working capital indicate tight liquidity. Overall, the score reflects a company that is surviving but needs to strengthen its financial resilience.

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Key Vital Signs

Metric	2024 Value	Interpretation
Current Assets	£904	Minimal cash or receivables; liquidity is very tight
Current Liabilities	£0	No short-term debts; positive sign of no immediate financial stress
Net Current Assets	£904	Working capital positive but very low; limited buffer
Fixed Assets	£1,519	Moderate investment in long-term assets; decreased from prior year
Net Assets (Equity)	£1,532	Positive equity, yet declined from £2,560 in prior year
Accruals and Deferred Income	-£891	Some unearned income or accrued expenses; watch for timing of cash flows

• Liquidity (Vital Sign: Healthy Cash Flow): The company holds very limited current assets, indicating a “thin blood supply” to meet day-to-day expenses. The absence of current liabilities is positive but suggests the company is not leveraging credit lines.

• Solvency (Vital Sign: Structural Integrity): Positive net assets show the company is solvent, but the drop from prior years signals some erosion in financial strength, possibly due to asset disposals or retained losses.

• Operational Scale (Vital Sign: Muscle Mass): The company remains very small with only 1 employee and limited fixed asset base, consistent with its micro-entity status.

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Symptoms Analysis

• Declining Net Assets: The drop from £2,560 in 2023 to £1,532 in 2024 suggests the company has either taken losses or written down assets. This could be from reduced profitability or asset impairment, implying some operational challenges.

• Reduced Fixed Assets: Fixed assets decreased by approximately £774 (from £2,293 to £1,519), indicating possible asset sales, depreciation, or lack of reinvestment. This reduces the company’s operational capacity or long-term resource base.

• Minimal Current Assets: Very low current assets (£904) constrain the company’s ability to cover immediate expenses, suggesting cash flow management is critical. The lack of current liabilities means the company is not relying on short-term borrowing but may also be limiting growth.

• Accruals & Deferred Income: The presence of nearly £891 in accruals/deferred income could mask timing differences in cash flow, potentially indicating that some income is received in advance or expenses are due, requiring careful cash flow forecasting.

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Diagnosis

CLEANBEST LTD is akin to a patient with stable but low vitality—no immediate danger signals, but with signs of weakening strength and limited reserves. The company is solvent and currently meets its obligations without debt, which is good. However, the shrinking equity and asset base reflect underlying strains, possibly from operational losses or underinvestment. The company’s liquidity is fragile, with minimal current assets to cover unexpected expenses or growth opportunities.

The business is in an early stage of its lifecycle, operating on a tight financial leash, requiring careful management of cash flow and strategic decisions on asset utilization or expansion.

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Prognosis

If the current pattern continues without improvement, the company risks further erosion of equity and operational capacity. However, with prudent cash flow management and possibly infusion of capital or revenue growth, the company can stabilize and rebuild financial strength.

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Recommendations

1. Improve Cash Reserves: Focus on increasing current assets, primarily cash or receivables, through improved billing cycles or cost control to ensure a healthier liquidity buffer.

2. Monitor Asset Utilization: Review why fixed assets have decreased and assess if reinvestment or replacement is needed to maintain operational capacity.

3. Manage Accruals/Deferred Income Carefully: Ensure timing mismatches do not lead to cash shortages; implement robust forecasting.

4. Explore Growth Opportunities: As a micro business, consider scaling operations cautiously to improve revenue and profit margins, which will enhance equity.

5. Consider External Funding: If growth is planned, evaluate options for external funding to strengthen the balance sheet without compromising control (currently 75-100% owned by the director).

6. Regular Financial Review: Establish monthly financial health checks ("vital signs") to detect and address financial symptoms early.

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