SPARKLING WATER CARPET CLEANING LTD

Executive Summary

Sparkling Water Carpet Cleaning Ltd has made notable financial progress, shifting from net liabilities to positive net assets and improved liquidity over three years. The company exhibits stable financial health typical of a small, tightly controlled operation but should focus on strengthening cash reserves and expanding operations cautiously to sustain this positive trend.

SPARKLING WATER CARPET CLEANING LTD - Analysis Report

Company Number: 14528064

Analysis Date: 2025-07-29 12:56 UTC

1. Financial Health Score: B

Explanation: Sparkling Water Carpet Cleaning Ltd demonstrates a solid improvement in its financial position over the last three years, moving from net liabilities to positive net assets and net current assets. However, as a micro-entity with limited scale and only one employee, the financial base remains modest, indicating room for strengthening liquidity and capital buffers.

2. Key Vital Signs:

• Net Current Assets: £4,429 (2024) up from negative £746 (2022)
  Interpretation: This "healthy cash flow" indicator shows the company’s ability to cover short-term liabilities with short-term assets has improved substantially, resolving previous working capital "symptoms of distress."

• Net Assets/Shareholders' Funds: £4,429 (2024) from negative £746 (2022)
  Interpretation: Positive net assets indicate the company has built equity, signaling financial stability and a foundation to support growth.

• Current Liabilities: £2,504 (2024) vs £1,572 (2023)
  Interpretation: Current liabilities have increased but remain well covered by current assets. Monitor to ensure liabilities do not outpace asset growth.

• Employee Count: 1 (constant)
  Interpretation: A very lean operation, which minimizes fixed costs but may constrain scaling potential.

3. Diagnosis:

The company has transitioned from a fragile financial state with net liabilities to a healthier position with positive net assets and net current assets, reflecting improved liquidity and balance sheet strength. The steady increase in current assets relative to liabilities shows effective management of working capital and operational cash flow. The single-employee structure points to a small-scale operation, typical for a micro-entity, which aligns with the company’s micro account filing status. The director, who is also the sole significant controller, holds full ownership and decision-making authority, limiting risks of governance conflict but concentrating control.

No signs of financial distress or over-leverage are evident. However, limited scale and modest asset base mean the company remains vulnerable to external shocks or unexpected expenses. The absence of an audit is consistent with micro-entity status but limits transparency.

4. Recommendations:

• Continue to build cash reserves and net assets to further strengthen the financial buffer against unforeseen liabilities or downturns.

• Consider diversifying client base or service offerings to increase revenue streams and reduce dependence on a narrow market segment.

• Maintain tight control over current liabilities to ensure working capital remains positive, avoiding liquidity "symptoms" such as payment delays or overdrafts.

• Explore opportunities for gradual scaling, including hiring or outsourcing, to increase operational capacity without compromising financial stability.

• Keep up timely filings and compliance to maintain creditor and stakeholder confidence.

• Although audit exemption is applicable, consider voluntary financial reviews for enhanced credibility, especially if seeking external finance or partnerships.

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