CLEANX LTD

Executive Summary

CLEANX LTD demonstrates promising profitability but suffers from critical liquidity shortages typical of a start-up. While operational margins are healthy, the absence of cash reserves poses a risk to ongoing operations. Immediate focus on improving cash flow and ensuring regulatory compliance will be vital for sustaining and scaling the business.

CLEANX LTD - Analysis Report

Company Number: 14716613

Analysis Date: 2025-07-29 14:52 UTC

Financial Health Assessment for CLEANX LTD

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1. Financial Health Score: C

Explanation:
CLEANX LTD is an active private limited company newly incorporated in 2023, operating in a niche service sector (SIC 96090: Other service activities not elsewhere classified). The company shows early signs of operational profitability with a positive operating profit margin but exhibits symptoms of limited liquidity and very low asset base. The absence of cash or current assets is a concern, although the business has no current liabilities, suggesting a neutral short-term financial position. Overall, the company is in a fragile but stable condition typical for a start-up, meriting a mid-level score with significant improvement needed.

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2. Key Vital Signs

• Turnover: £13,609 (first 13 months)
  Interpretation: Modest revenue generation consistent with a small start-up phase.

• Gross Profit: £11,499 (gross margin ≈ 85%)
  Interpretation: Healthy gross margin, indicating good control over cost of sales and pricing.

• Operating Profit: £7,193 (operating margin ≈ 53%)
  Interpretation: Positive operating profit shows operational viability and initial business model effectiveness.

• Net Assets / Shareholders’ Funds: £2,086
  Interpretation: Small net asset base reflects limited capital investment and asset accumulation.

• Current Assets: £0; Cash: £0; Net Current Assets: £0
  Interpretation: No liquid assets or working capital indicates potential cash flow risk—"symptoms of distress" in liquidity, which could impair day-to-day operations or ability to cover short-term obligations.

• Fixed Assets: £2,086 (office equipment and motor vehicles)
  Interpretation: Asset base is tangible but very small, showing modest investment in operational infrastructure.

• Employees: 1 (average)
  Interpretation: Very small workforce consistent with micro/small enterprise status.

• Filing Status: Accounts filed on time; Confirmation Statement overdue
  Interpretation: Compliance is mostly good, but overdue confirmation statement indicates minor risk of regulatory non-compliance "symptoms."

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3. Diagnosis: Financial Condition

CLEANX LTD is in an early developmental stage typical of a new business. The company’s "vital signs" show a strong gross and operating profit margin, which is a positive "heartbeat" indicating that the core business activities are generating value efficiently. However, the absence of current assets and cash flow is a significant "symptom of distress" that could threaten operational continuity if not addressed promptly.

The company's small net asset base and lack of liquidity suggest it is largely dependent on owner funding or external financing for working capital. The lack of cash means there is no buffer to absorb unexpected expenses or delays in client payments, which is akin to "low blood pressure" in financial terms—potentially dangerous if prolonged.

The overdue confirmation statement filing is a mild "infection" that could lead to penalties if unresolved but does not immediately affect financial health.

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4. Recommendations: Steps to Improve Financial Wellness

• Boost Liquidity: Prioritize building a cash reserve to cover at least 3 months of operating expenses. Consider short-term financing options or owner injections to improve working capital.

• Active Cash Flow Management: Implement strict invoicing and collection procedures to ensure timely payments. Monitor cash flow forecasts regularly to anticipate shortfalls.

• Increase Revenue: Explore marketing and client acquisition strategies to scale up turnover beyond the initial modest level, leveraging the current profitable margins.

• Cost Control: Maintain tight control on distribution and administrative costs to preserve operating profitability as the business grows.

• Regulatory Compliance: Immediately update and file the overdue confirmation statement to avoid penalties and maintain good standing.

• Financial Planning: Develop a medium-term financial plan including budgets, forecasts, and capital expenditure plans to guide growth and investment decisions.

• Seek Professional Advice: Engage with a financial advisor or accountant to assist with financial management and compliance going forward.

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