Company Number: 13096803

Analysis Date: 2025-07-20 18:07 UTC

Financial Health Assessment Report: NU-CLEAR LTD (as at 31 December 2023)

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1. Financial Health Score: D

Explanation:
The company shows persistent negative net assets (shareholders’ funds) over multiple years, indicating chronic financial distress. While current assets exceed current liabilities, the overall balance sheet is burdened by long-term liabilities that substantially outweigh total assets. This suggests a fragile financial condition akin to a patient with a weak heartbeat but compromised vital organs. The company is still active and not in liquidation but must address its capital structure urgently.

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2. Key Vital Signs (Critical Metrics)

Metric	Value (2023)	Interpretation
Net Assets (Shareholders’ Funds)	£-57,565	Negative net worth signals insolvency risk; liabilities exceed assets—major symptom of distress.
Current Assets	£18,047	Includes cash and receivables, healthy short-term liquidity base.
Current Liabilities	£12,599	Short-term debts, manageable relative to current assets (positive working capital).
Net Current Assets (Working Capital)	£5,448	Positive, indicating the company can cover short-term obligations; good short-term health.
Fixed Assets (Tangible)	£29,218	Investment in long-term assets remains stable; indicates ongoing operational capacity.
Long-term Liabilities	£92,231	Substantial debt burden; primary cause of negative net assets and financial strain.
Cash on Hand	£5,229	Modest cash reserves, but sufficient for immediate needs.
Trend in Net Assets (2019-23)	Declining from £-40,419 to £-57,565	Worsening equity position reflects prolonged financial weakness.

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3. Diagnosis: Financial Condition of NU-CLEAR LTD

NU-CLEAR LTD exhibits the symptoms of chronic financial distress, primarily driven by a heavy long-term liabilities load that overshadows total assets. Despite maintaining a positive working capital—implying a “healthy cash flow” for short-term obligations—the company’s negative shareholders’ funds reveal a systemic capital deficiency comparable to an organ failure threatening overall health.

The company’s fixed assets and current assets are reasonable, supporting ongoing operations in the beauty treatment industry, but the excessive debts pose a significant risk to solvency. The negative net equity has persisted and worsened over four years, suggesting the underlying financial condition has not improved despite business activity.

The positive working capital is a bright spot, indicating the company can meet immediate liabilities, but it masks the deeper issue of long-term sustainability. Directors should be alert to the risk of insolvency if the company cannot restructure debt or improve profitability.

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4. Recommendations: Improving Financial Wellness

• Debt Restructuring: Engage creditors to negotiate terms, possibly refinancing or extending loan maturities to reduce the burden of long-term liabilities that are currently overwhelming assets.
• Capital Injection: Consider fresh equity investment from existing shareholders or new investors to restore positive net assets and improve solvency.
• Profitability Enhancement: Increase operational efficiency or expand revenue streams to generate retained earnings and reduce reliance on debt.
• Cash Flow Management: Monitor receivables closely to maintain healthy working capital; consider tighter credit control to avoid cash flow disruptions.
• Financial Monitoring: Implement regular financial reviews and forecasting to detect early warning signs and take corrective action promptly.
• Professional Advice: Consult insolvency practitioners or turnaround specialists proactively to explore options before distress worsens.

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