THE CLEAN TECH BUSINESS GROUP LTD

Executive Summary

THE CLEAN TECH BUSINESS GROUP LTD exhibits early-stage growth with improving liquidity and equity but faces tight short-term financial pressures due to rising liabilities. While current operations show potential, careful cash flow management and strengthening of the equity base are crucial to ensure sustainable financial health and avoid symptoms of distress. Timely compliance and a lean operating model support stability, but proactive financial monitoring is recommended to maintain vitality.

THE CLEAN TECH BUSINESS GROUP LTD - Analysis Report

Company Number: 12929794

Analysis Date: 2025-07-20 11:13 UTC

Financial Health Assessment for THE CLEAN TECH BUSINESS GROUP LTD

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1. Financial Health Score: C

Explanation:
The company presents a mixed financial condition. There is evidence of growth in current assets and shareholders’ funds over recent years, which is positive. However, the company operates with minimal equity and relatively high short-term liabilities, indicating some vulnerability. The cash flow position shows improvement but remains tight, characteristic of a micro-entity in early growth stages. The absence of long-term assets or significant capital investment suggests the business is still in a foundational phase, requiring careful monitoring.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Current Assets	£47,883	Healthy increase (up from £2,357 in 2023), indicating improved liquidity and cash or receivables.
Current Liabilities	£39,400	Also increased significantly (from £2,260 in 2023), raising concerns about short-term obligations.
Net Current Assets (Working Capital)	£8,483	Positive working capital, but modest; suggests a cautious buffer against short-term debts.
Shareholders' Funds (Equity)	£8,483	Small but growing; the company is building retained profits or capital base gradually.
Share Capital	£1.00	Minimal share capital, typical for micro-entities but means financial resilience depends on operations.
Average Number of Employees	0	No employees reported, indicating a potentially owner-operated or consultancy model.
Filing Status	Up to date	No overdue accounts or returns; compliance is current, a positive governance sign.

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3. Diagnosis: What the Financial Data Reveals

• Liquidity and Cash Flow: The surge in current assets, likely cash or receivables, is a "healthy pulse," showing the business has improved its immediate financial resources. However, the near-equivalent rise in current liabilities signals "symptoms of strain" as the company must meet increased short-term obligations. The net working capital remains positive but slim — akin to a patient with a mild imbalance requiring attention.

• Capital Structure: The very low share capital and modest shareholders’ funds reflect a "nascent cardiovascular system," where the business’s equity foundation is still developing. This is common for micro-entities but means the company is more reliant on operational cash flow and short-term credit rather than a robust equity cushion.

• Growth and Stability: The company shows signs of growth in assets and equity over the last two years, which is encouraging. Yet, the rapid increase in liabilities could indicate the business is leveraging credit or supplier terms to finance growth, which could be risky if revenue inflows do not keep pace.

• Operational Model: With an average of zero employees, the company likely functions through directors or contractors, keeping overheads low but possibly limiting scalability or operational flexibility.

• Compliance and Governance: Timely filing of accounts and returns suggests sound administrative health, reducing risks of penalties or regulatory complications.

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4. Recommendations: Steps to Improve Financial Wellness

• Strengthen Liquidity:
  Monitor cash flow closely to ensure the business can comfortably meet its current liabilities. Consider negotiating longer payment terms with creditors or accelerating receivables collection to ease cash flow pressure.

• Build Equity Base:
  Explore options to increase shareholders’ funds, either through additional share capital injection or retained earnings growth, to provide a more robust financial foundation.

• Manage Growth Pace:
  Cautiously balance growth ambitions with financial capacity. Avoid overextending credit lines or incurring liabilities that could overwhelm the company’s cash generation.

• Operational Efficiency:
  If the business model allows, consider scaling up through hiring or outsourcing to increase capacity and revenue potential without disproportionately increasing fixed costs.

• Regular Financial Review:
  Conduct quarterly financial health check-ups to detect early signs of distress, much like monitoring vital signs in a patient, to enable timely interventions.

• Contingency Planning:
  Maintain a contingency fund or access to short-term credit facilities to buffer unexpected expenses or downturns.

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