CLEANCLEAR&CLARITY LTD

Executive Summary

CLEANCLEAR&CLARITY LTD shows significant financial distress with very low cash reserves, negative working capital, and negative equity, indicating an urgent need for financial stabilization. Immediate focus should be on improving liquidity, cost control, and strategic planning to avoid progression towards insolvency. Early intervention and capital support are critical to restore financial health and operational viability.

CLEANCLEAR&CLARITY LTD - Analysis Report

Company Number: 13885056

Analysis Date: 2025-07-29 20:32 UTC

Financial Health Assessment for CLEANCLEAR&CLARITY LTD

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1. Financial Health Score: D

Explanation:
The company's financial statements indicate significant financial distress, characterized by negative net assets, negative working capital, and minimal cash reserves. These symptoms suggest that the company is not currently in a healthy financial state and is at risk of liquidity problems. The grade "D" reflects serious concerns but not yet insolvency or formal distress proceedings.

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2. Key Vital Signs

Metric	Value (2024)	Interpretation
Current Assets	£78	Extremely low liquid assets to cover obligations.
Current Liabilities	£2,891	Short-term debts are sizable in relation to assets.
Net Current Assets (Working Capital)	-£2,813	Negative working capital, indicating inability to cover short-term obligations with current assets.
Net Assets (Shareholders’ Funds)	-£2,813	Negative equity, meaning liabilities exceed assets.
Cash on Hand	£78	Very limited cash available to meet immediate needs.
Turnover/Revenue	Not disclosed	Unknown — limits ability to assess operational performance.
Number of Employees	2	Small scale, possibly micro or small company category.

Interpretation:

• Healthy cash flow is absent; the company holds only £78 in cash, juxtaposed with nearly £2,900 in liabilities due within the year.
• The negative working capital is a critical symptom of distress, showing the company may struggle to meet short-term financial commitments.
• Negative net assets indicate accumulated losses or undercapitalization, weakening financial stability and shareholder equity.
• The balance sheet reveals a company currently unable to generate sufficient resources to cover debts, posing a risk for creditors and operational continuity.
• The company is young (incorporated in 2022), which may explain some early-stage financial challenges, but current signs point to urgent stabilization needs.

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3. Diagnosis

CLEANCLEAR&CLARITY LTD is exhibiting classic symptoms of financial distress:

• Liquidity Crisis: The minimal cash and negative net current assets reveal a "cash starvation" state, akin to a patient with low blood pressure failing to circulate life-sustaining fluids. The company risks being unable to meet immediate creditor demands.
• Balance Sheet Weakness: Negative net assets suggest the company has absorbed losses greater than the initial capital invested, comparable to a weakened immune system struggling to fend off illness.
• Early-Stage Risks: As a young company with only two employees and limited financial history available, it may be in a start-up phase grappling with initial losses and cash flow management challenges.

Without corrective action, these symptoms could progress to insolvency, similar to a patient’s condition worsening without treatment.

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4. Recommendations

To improve the financial wellness of CLEANCLEAR&CLARITY LTD, the following actions are advised:

1. Improve Liquidity and Cash Flow Management:

   • Seek additional working capital injections, possibly through shareholder loans or equity funding to bolster cash reserves.
   • Tighten credit control and accelerate debtor collections to improve cash inflows.
   • Negotiate extended payment terms with suppliers to ease immediate cash outflows.

2. Cost Control and Efficiency:

   • Review operational expenses critically to identify and eliminate unnecessary costs.
   • Optimize workforce utilization given the small team size to improve productivity.

3. Financial Planning and Forecasting:

   • Develop a detailed cash flow forecast to anticipate future liquidity needs and avoid surprises.
   • Regularly monitor key financial metrics to identify emerging financial stresses early.

4. Strategic Review:

   • Evaluate business model viability and market positioning to enhance revenue generation potential.
   • Consider seeking professional advice on restructuring or turnaround strategies if losses persist.

5. Compliance and Reporting:

   • Maintain timely and accurate financial reporting to ensure transparency and stakeholder confidence, as currently maintained with no overdue filings.

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