Company Number: 13595472

Analysis Date: 2025-07-29 13:31 UTC

Financial Health Assessment: OCEANO CLEANING SERVICES LTD

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1. Financial Health Score: C

Explanation:
The company shows mixed signals in its financial health. While it maintains positive net current assets (working capital), the presence of significant long-term creditors exceeding current assets creates a concerning "liability overhang." This suggests the company is managing to operate but under financial strain, akin to a patient with stable but borderline vital signs requiring close monitoring and intervention.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	3,788	Small investment in long-term assets; typical for a micro cleaning services business.
Current Assets	22,777	Cash, receivables, and stock available in the short term; has decreased significantly from 2023.
Current Liabilities	40,881	Debts due within one year; this is quite high relative to current assets, indicating liquidity pressure.
Net Current Assets	-18,104*	(22,777 - 40,881) Negative working capital implies short-term liquidity stress.
Creditors after 1 year	40,881	Long-term debts; large and almost double the current assets, a "chronic condition" affecting solvency.
Net Assets	-17,991	Negative net worth indicates liabilities exceed assets; a symptom of financial distress.
Shareholders Funds	-17,991	Equity capital is negative, meaning the company is "underweight" financially.
Employees	2	Small workforce consistent with micro-entity status.

*Note: The balance sheet data has some conflicting entries in the provided document (e.g., net current assets shown as positive £19,102 but calculation of 22,777 - 40,881 gives a negative figure). Assuming the current liabilities include longer-term creditors improperly classified or a note clarifying this, the overall net asset position is negative.

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3. Diagnosis

• Liquidity Concern ("Healthy Cash Flow?"):
  The company’s current liabilities are higher than its current assets, indicating a liquidity crunch. This is a "symptom of distress" because it suggests the company might struggle to cover short-term obligations as they fall due.

• Solvency Risk ("Balance Sheet Weakness"):
  Negative net assets and shareholders’ funds point towards insolvency risk. The company’s total liabilities exceed its total assets, a serious financial imbalance akin to a patient with an underlying chronic condition.

• Operational Scale and Stability:
  As a micro-entity with only 2 employees and limited fixed assets, the company likely operates with tight margins. The reduction in current assets from 2023 to 2024 and the increase in liabilities is a red flag for worsening financial health.

• Continuity and Control:
  The director holds full control and no filings are overdue, reflecting responsible governance despite financial challenges.

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4. Recommendations

• Improve Liquidity ("Restore Healthy Cash Flow"):

  • Accelerate collection of receivables and manage payables more effectively to reduce short-term liabilities.
  • Consider negotiating extended payment terms with creditors or exploring short-term financing options.

• Address Solvency ("Strengthen the Balance Sheet"):

  • Injection of additional equity or debt restructuring may be necessary to restore positive net asset position.
  • Review and possibly reduce overheads or non-essential expenses to improve profitability.

• Financial Monitoring and Reporting:

  • Maintain timely filings and closely monitor cash flow forecasts to anticipate and manage liquidity needs.
  • Engage with financial advisors to develop a turnaround plan if negative trends continue.

• Operational Efficiency:

  • Evaluate service pricing, cost control, and operational efficiencies to improve margins.
  • Consider opportunities for business growth or diversification to increase revenue base.

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