CLEARTECH SYSTEMS LTD

Executive Summary

Cleartech Systems Ltd is experiencing financial distress marked by persistent negative net assets and working capital deficits, indicating liquidity and solvency challenges. While some cash reserves exist, urgent actions to improve cash flow, recapitalize equity, and realign operations are essential to restore financial health and ensure future viability.

CLEARTECH SYSTEMS LTD - Analysis Report

Company Number: 12843982

Analysis Date: 2025-07-20 16:08 UTC

Financial Health Assessment Report for Cleartech Systems Ltd

---

1. Financial Health Score: D

Explanation:
Cleartech Systems Ltd exhibits significant financial distress characterized by persistent negative net assets and net current liabilities over the past four years. While the company has maintained active status and timely filings, its financial "vital signs" reveal symptoms of liquidity and solvency issues, meriting a low grade reflecting the need for urgent remedial action to restore financial wellness.

---

2. Key Vital Signs

Metric	2024 (£)	Interpretation
Current Assets	21,119	Includes cash (£15,618) and debtors (£5,501), showing some liquidity available but limited.
Current Liabilities	67,600	High short-term debts exceeding current assets, indicating working capital deficiency.
Net Current Assets	-46,481	Negative working capital — a critical symptom of cash flow stress.
Net Assets (Shareholders’ Funds)	-46,481	Negative equity position, reflecting accumulated losses eroding shareholder value.
Cash Balance	15,618	Some cash buffer exists, which is a positive sign amid overall weakness.
Debtors	5,501	Moderate receivables, but overall insufficient to cover liabilities promptly.
Share Capital	100	Minimal paid-up capital, typical for a start-up but insufficient as a financial cushion.
Average Employees	0 (2024)	No employees currently, which may indicate a lean operation but could also limit growth.

---

3. Diagnosis: Financial Condition Overview

Cleartech Systems Ltd presents a classic case of financial distress akin to a patient with chronic liquidity issues and a weak balance sheet "immune system." The company’s net liabilities and negative working capital over multiple years indicate an inability to meet short-term obligations comfortably, placing strain on day-to-day operations.

The persistent negative net assets suggest accumulated losses, likely from operational deficits or investment in growth without commensurate revenue generation. The presence of cash in 2024 is a vital sign that the company is not yet in immediate crisis but is in a fragile state requiring careful cash flow management to avoid default.

The absence of employees in the latest year could indicate a strategic pivot, cost-cutting, or operational scaling down, which may impact revenue-generating capacity and future viability.

In summary, the company is in a weakened financial state with symptoms of illness that, if untreated, could lead to insolvency or forced restructuring.

---

4. Recommendations: Prescriptions for Financial Wellness

1. Improve Liquidity and Working Capital

   • Prioritize accelerating debtor collections and negotiating extended payment terms with creditors to ease cash flow pressures.
   • Explore short-term financing options, such as invoice factoring or an overdraft facility, to provide a cash buffer for operations.

2. Address Negative Equity

   • Consider capital injection from shareholders or new investors to bolster equity and restore balance sheet health.
   • Evaluate cost structures rigorously to reduce ongoing losses and preserve retained earnings.

3. Operational Review

   • Reassess business model and revenue streams to identify growth opportunities or cost-saving measures, particularly considering the telecommunications industry focus.
   • Rebuild workforce strategically to support business objectives without overextending resources.

4. Financial Monitoring and Reporting

   • Implement regular financial health checks to monitor cash flow, profitability, and solvency indicators.
   • Ensure timely and transparent communication with stakeholders about financial status and recovery plans.

5. Strategic Planning

   • Develop a clear turnaround plan with measurable milestones, focusing on sustainable growth and profitability.
   • Engage professional financial advisors or turnaround specialists for expert guidance.

---

Medical Analogy Summary

Cleartech Systems Ltd is currently "under the weather" with symptoms of financial distress such as negative working capital and an eroded equity base. While there is a modest "cash pulse," the company’s overall condition requires immediate intervention—akin to prescribing a treatment plan focused on restoring liquidity, strengthening the financial "immune system," and preventing a potential "financial collapse."

---