Company Number: 13280814

Analysis Date: 2025-07-20 13:40 UTC

Financial Health Assessment for CLEAR MIND CBT LTD (as at 31 March 2024)

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1. Financial Health Score: C

Explanation:
CLEAR MIND CBT LTD shows some positive signs such as increasing net assets and shareholder funds over the last two years, but also exhibits symptoms of financial strain, particularly in working capital management. The company’s net current assets have turned negative this year, indicating potential liquidity challenges. Overall, the company is in a moderate financial condition but requires attention to avoid future distress.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Net Assets	1,201	Positive net worth, increased from £256 in 2023, showing accumulating retained earnings.
Shareholders’ Funds	1,201	Mirrors net assets, indicating equity growth.
Fixed Assets (Tangible)	1,570	Slight decline, indicating some depreciation but no new investments.
Current Assets	8,673	Mostly trade debtors (£7,557) with limited cash (£1,116).
Current Liabilities	9,042	Slightly decreased but still exceeds current assets, leading to negative working capital.
Net Current Assets (Working Capital)	-369	Negative – a symptom of cash flow strain and possible short-term liquidity issues.
Cash at Bank	1,116	Relatively low cash balance compared to current liabilities.
Debtors	7,557	High receivables may indicate slow collection or credit risk.
Profit and Loss Reserve	1,101	Growing retained earnings show underlying profitability or capital injections.
Average Employees	2	Very small team, typical for a micro entity.

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3. Diagnosis

The company’s financial “vital signs” reveal a mixed picture:

• Positive Signs:

  • The company has grown its net assets and retained earnings significantly in the past year, which is a sign of operational profitability or capital retention.
  • The balance sheet remains positive in total assets over liabilities, meaning the company has equity buffer.

• Symptoms of Distress:

  • The net current assets have turned negative (£-369), signaling that current liabilities exceed current assets. This is akin to a “cash flow blockage” making it challenging to meet short-term obligations promptly.
  • The cash reserves have dropped considerably compared to the previous year (£1,116 vs £4,506), indicating less liquid cash available to cover immediate expenses.
  • The high level of debtors relative to cash suggests the company is tied up in receivables and may face collections challenges or extended payment terms with clients.

• Operational Scale:

  • The company remains very small and lean with 2 employees, indicating low overhead but also limited capacity to absorb financial shocks.
  • No new fixed asset investments during the year, with depreciation reducing asset book values, may indicate cautious capital expenditure or limited growth investment.

Overall, the company is stable but showing early signs of liquidity stress. This could be a “warning symptom” if cash collections do not improve or if liabilities escalate.

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4. Recommendations

To improve financial wellness and promote a healthier cash flow "heartbeat," the following actions are advised:

• Improve Cash Flow Management:

  • Accelerate debtor collections by tightening credit control policies and offering early payment incentives.
  • Monitor payment terms with creditors to extend where possible, enhancing working capital.

• Increase Cash Reserves:

  • Consider short-term financing options or capital injections if cash flow gaps persist.
  • Review operational expenses to optimize cash outflows without compromising service delivery.

• Enhance Financial Monitoring:

  • Implement monthly cash flow forecasting to detect liquidity issues early.
  • Track key performance indicators (KPIs) related to receivables aging and payment cycles.

• Strategic Growth Planning:

  • Explore opportunities to increase turnover sustainably, which will build cash inflows and strengthen equity.
  • Evaluate fixed asset needs carefully; avoid under-investment that could affect service capacity but also avoid unnecessary capital expenditure.

• Director Oversight:

  • Directors should stay vigilant regarding the company’s solvency position to prevent any risk of trading while insolvent.
  • Regular review of financial statements and operational strategy is crucial.

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