STAY SHARP CLEANING SERVICES LIMITED

Executive Summary

STAY SHARP CLEANING SERVICES LIMITED is currently in a fragile financial state with negative net assets and mounting short-term liabilities indicating liquidity and solvency concerns. Immediate focus on cash flow management, cost control, and possible capital infusion is critical to stabilize and improve the company's financial health. Without intervention, the risk of financial distress will likely increase.

STAY SHARP CLEANING SERVICES LIMITED - Analysis Report

Company Number: 13643685

Analysis Date: 2025-07-29 13:05 UTC

Financial Health Assessment Report
Company: STAY SHARP CLEANING SERVICES LIMITED
Financial Year End: 30 September 2024

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1. Financial Health Score: D

Explanation:
The company exhibits clear symptoms of financial distress, with net liabilities replacing net assets and a significant increase in current liabilities. While historically the company had positive net assets, the latest financial year shows a marked deterioration. This warrants a below-average grade reflecting concerns over solvency and liquidity.

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2. Key Vital Signs: Critical Metrics and Interpretation

Metric	2024 (£)	2023 (£)	Interpretation
Fixed Assets	15,304	18,239	Slight decline; not severe but indicates asset base shrinking.
Current Assets	1,961	745	Improved liquidity position from prior year, positive sign.
Current Liabilities	31,829	13,135	Sharp increase, indicating rising short-term obligations.
Net Current Assets (Working Capital)	-29,868	-12,390	Negative working capital; company may struggle to meet short-term debts.
Net Assets (Shareholders' Funds)	-15,064	5,349	Shift from positive equity to negative, indicating insolvency on paper.
Shareholder Control	75-100% owner Ronald Sharpley	N/A	Single controlling person; concentrated risk and decision-making.

Interpretation:

• Liquidity distress: Negative working capital signals a "symptom of distress," suggesting the business may not currently possess enough liquid assets to cover immediate debts.
• Erosion of equity: The move from positive to negative net assets indicates accumulated losses or increased liabilities, a "diagnostic alarm" for financial health.
• Asset base shrinking: Fixed assets have declined slightly, possibly due to disposals or depreciation without significant reinvestment.
• No employees reported: The company reported zero employees, which may reflect outsourcing or minimal operations, affecting revenue generation capability.

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3. Diagnosis: Overall Financial Condition

The financial "vital signs" reveal a company in a precarious state:

• The negative net assets position suggests the company is technically insolvent under accounting rules, meaning liabilities exceed assets.
• The sharp increase in current liabilities (more than doubling year-over-year) is a worrying symptom, possibly indicating reliance on short-term credit or delayed payments to suppliers.
• Despite a small increase in current assets (cash/debtors), this is insufficient to offset the ballooning short-term debts, weakening liquidity and increasing risk of cash flow crisis.
• The absence of employees and minimal asset base implies limited operational scale, which can magnify financial vulnerability.
• The company remains active and has filed accounts on time, which is a positive procedural "health sign," but financial substance is weak.

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4. Recommendations: Actions to Improve Financial Wellness

1. Urgent Cash Flow Management:

   • Conduct a detailed cash flow forecast to identify immediate liquidity gaps.
   • Negotiate extended payment terms with creditors to alleviate short-term pressure.
   • Explore short-term financing options (overdrafts, invoice factoring) cautiously to bridge liquidity.

2. Cost and Expense Review:

   • Evaluate operational costs and fixed commitments to identify potential savings or restructuring opportunities.
   • Consider whether the current business model is sustainable without employees or if re-investment in resources is needed.

3. Capital Structure Review:

   • With negative equity, consider injecting fresh capital or shareholder loans to restore balance sheet health.
   • Explore bringing in new investors or strategic partners if possible.

4. Strategic Business Review:

   • Reassess business model and revenue streams, particularly as the company operates in a competitive cleaning services market.
   • Develop a turnaround plan focusing on profitability and sustainable growth.

5. Regular Monitoring and Reporting:

   • Implement tighter financial controls and regular management accounts to detect issues early.
   • Engage professional advice if turnaround is challenging to develop restructuring solutions.

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Medical Analogy Summary

The company’s financial "pulse" is weak with signs of "liquidity anemia" and "balance sheet infection" (negative net assets). Though the business is "alive" and filing accounts timely, the "symptoms of distress" in liabilities and working capital suggest urgent intervention is required to prevent worsening "financial health" or "collapse."

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