CLICK DOT SALES AND SERVICES LTD

Executive Summary

Click Dot Sales and Services Ltd is experiencing significant financial distress, characterized by persistent negative net assets and liquidity shortfalls over multiple years. While still operational, the company must urgently improve cash flow and restructure liabilities to avoid insolvency risks. With targeted financial management and capital support, the company can stabilize and improve its financial condition.

CLICK DOT SALES AND SERVICES LTD - Analysis Report

Company Number: 12589480

Analysis Date: 2025-07-29 15:14 UTC

Financial Health Assessment of CLICK DOT SALES AND SERVICES LTD

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1. Financial Health Score: D

Explanation:
The company exhibits persistent negative net assets and net current liabilities over the last five years, indicating financial distress. Its working capital position is weak, with current liabilities significantly exceeding current assets, signaling liquidity challenges. Although it remains active with no overdue filings, these financial "symptoms" suggest it is struggling to maintain a healthy cash flow and solvency. Hence, the grade reflects a concerning financial condition requiring prompt attention.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Current Assets	£8,753	Very low liquid resources to cover short-term obligations.
Current Liabilities	£36,667	High short-term debts that must be settled within a year.
Net Current Assets	-£27,914	Negative working capital indicates liquidity stress; company may struggle to meet short-term debts.
Net Assets / Shareholders’ Funds	-£35,410	Negative equity showing accumulated losses exceeding capital contributions; signs of insolvency risk.
Creditors > 1 year	£7,436	Long-term liabilities add further pressure on overall solvency.
Employee Count	3	Small workforce consistent with micro entity status.
Share Capital	£1.00	Minimal capital base; little buffer to absorb losses.

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3. Diagnosis: Financial Condition Analysis

The company is showing "symptoms of distress" akin to a patient with a chronic condition:

• Negative Net Assets: The company’s liabilities exceed its assets by over £35k as of the latest accounts. This "balance sheet deficit" is a critical red flag indicating insolvency risk if the trend continues.

• Liquidity Crunch: The large gap between current liabilities (£36.7k) and current assets (£8.7k) suggests the company lacks sufficient liquid resources to cover immediate debts, analogous to a patient with low blood pressure struggling to circulate vital nutrients.

• Trend Deterioration: Over five years, net current liabilities worsened from -£512 to -£27,914, confirming a progressive weakening rather than recovery.

• Low Capital Base: The minimal share capital (£1) provides negligible financial cushion to absorb ongoing losses or shocks.

• No Audit Requirement: As a micro entity, the company benefits from simplified reporting, but this also means less external scrutiny on financial health.

• Business Activity: Operating in telecommunications (SIC 61900), a competitive sector requiring investment, the current financial position may limit growth or innovation potential.

Overall, the company appears to be in a fragile state, with ongoing operational challenges impacting its ability to maintain financial stability.

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4. Recommendations for Financial Wellness Improvement

Short Term Actions (Stabilising the Patient):

• Improve Cash Flow Management: Tighten controls on receivables and payables to enhance liquidity. Prioritize collecting outstanding debts promptly.

• Negotiate with Creditors: Seek extended payment terms or restructuring of current liabilities to ease short-term pressures.

• Increase Working Capital: Inject funds via shareholder loans, equity infusion, or short-term financing if feasible, to restore positive net current assets.

• Cost Rationalization: Review operating expenses and reduce non-essential costs to conserve cash.

Medium to Long Term Actions (Recovery and Growth):

• Business Model Review: Assess pricing, product/service mix, and market positioning to improve profitability and revenue.

• Capital Restructuring: Consider recapitalization to improve equity base and signal financial strength to stakeholders.

• Seek Professional Advice: Engage financial advisors or turnaround specialists to develop a comprehensive recovery plan.

• Monitor Financial KPIs Regularly: Track liquidity ratios (current ratio), solvency ratios (debt-to-equity), and profitability metrics to detect early warning signs.

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Medical Analogy Summary:
CLICK DOT SALES AND SERVICES LTD currently shows "symptoms of financial illness" with negative net assets (equivalent to a patient with critical organ function decline) and liquidity shortages ("low blood volume"). Without timely intervention, the prognosis could worsen, potentially leading to insolvency ("financial collapse"). Prompt "treatment" through cash flow improvement, liability management, and capital strengthening is essential to restore financial health.

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