CLEARTEL SOLUTIONS LTD

Executive Summary

CLEARTEL SOLUTIONS LTD displays very strong financial health with exceptional liquidity, robust working capital, and steadily growing equity. The company operates with a stable asset base and no signs of distress, reflecting sound financial stewardship. To maintain this healthy trajectory, it should consider targeted reinvestment strategies and continue prudent cash flow management to support future growth.

CLEARTEL SOLUTIONS LTD - Analysis Report

Company Number: 13106114

Analysis Date: 2025-07-19 13:03 UTC

Financial Health Assessment of CLEARTEL SOLUTIONS LTD

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1. Financial Health Score: A- (Very Healthy)

Explanation:
CLEARTEL SOLUTIONS LTD demonstrates very strong liquidity and capital structure, with robust cash reserves and positive net assets growth over recent years. The company shows signs of excellent financial vitality and low risk of distress, though a slight decline in fixed assets and moderate reliance on cash holdings suggest room for strategic reinvestment.

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2. Key Vital Signs

Metric	2023 Value	Interpretation
Cash & Cash Equivalents	£857,163	Exceptionally healthy cash flow position; ample liquidity to cover short-term obligations.
Current Assets	£974,433	High current assets relative to liabilities, indicating strong working capital.
Current Liabilities	£122,857	Low short-term debt burden; manageable liabilities.
Net Current Assets (Working Capital)	£851,576	Very strong working capital, signaling excellent short-term financial health.
Net Assets (Equity)	£881,816	Solid equity base; shareholders’ funds have increased steadily, indicating retained earnings growth and capital accumulation.
Fixed Assets (Net Book Value)	£30,240	Modest fixed asset base; slight reduction from prior year suggests depreciation outpacing capital expenditure.
Debtors	£52,625	Reasonable debtor levels, reflecting efficient receivables management.
Stock	£64,645	Stock levels stable; not excessive, suggesting good inventory control.
Share Capital	£100	Nominal share capital, typical for private limited companies; most value lies in retained earnings.

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3. Diagnosis: Understanding the Financial "Symptoms"

• Healthy Cash Flow: The company holds a large cash balance (£857k) relative to current liabilities (£123k), revealing a strong liquidity "pulse." This means CLEARTEL can comfortably meet its short-term obligations without stress, a key hallmark of financial wellness.

• Robust Working Capital: Net current assets of £851k indicate a very comfortable margin to cover immediate debts and operational needs. The business shows no signs of liquidity distress or "cash flow blockages."

• Increasing Equity and Net Assets: The growth from £537k net assets in 2020 to £882k in 2023 reflects accumulated profits and retained earnings, akin to a patient gaining strength over time. This signals sustainable profitability and prudent financial management.

• Asset Base Considerations: The decline in fixed assets from £76k in 2020 to £30k in 2023, mainly due to amortisation and depreciation, suggests the company may not be investing heavily in new long-term assets. While this is not immediately concerning, it represents a potential "nutritional deficiency" in capital investment that could impact future growth capacity.

• Stable Operational Scale: The average employee count remains steady at 5, indicating no rapid scaling or contraction. Stability here suggests consistent operations without overextension.

• No signs of financial distress: There are no overdue filings, no current liabilities approaching concerning levels, and the company remains active and compliant with regulatory deadlines. This is analogous to a patient showing no symptoms of acute illness.

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4. Recommendations: Strengthening Financial Wellness

1. Strategic Capital Investment: Consider reinvesting some of the strong cash reserves into upgrading or expanding fixed assets. This could prevent asset ageing and support future operational scaling, ensuring long-term vitality.

2. Liquidity Management: While cash is healthy, maintaining a balance between liquidity and productive asset deployment is essential to avoid "cash stagnation" where funds are not working optimally.

3. Monitor Debtor Levels: Continue efficient credit control to keep debtor days low and cash conversion cycles tight to avoid liquidity drying up.

4. Growth Strategy: With a solid financial base, explore opportunities for market expansion or product development to leverage the strong capital position.

5. Financial Forecasting: Regularly update cash flow forecasts to anticipate any seasonal or operational dips in liquidity and prepare accordingly.

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Executive Summary