Company Number: NI672556

Analysis Date: 2025-07-29 13:23 UTC

Financial Health Assessment for ULTRA CLEANING SOLUTIONS LTD

---

1. Financial Health Score: D

Explanation:
The company shows signs of financial distress, primarily due to negative net current assets (working capital) and a dramatic reduction in net assets over the last year. While the company remains active with ongoing operations and no overdue filings, the financial "vital signs" indicate liquidity challenges and a fragile equity base. This score reflects the need for urgent attention to improve liquidity and restore financial stability.

---

2. Key Vital Signs

Metric	2023 Value	Interpretation
Fixed Assets	£29,575	Moderate investment in long-term assets
Current Assets	£201,796	Healthy amount of liquid and short-term assets
Current Liabilities	£216,154	High short-term obligations exceeding assets
Net Current Assets (Working Capital)	-£14,358	Negative working capital; symptom of liquidity stress
Total Assets Less Current Liabilities	£15,217	Assets available after covering short-term debts
Creditors After One Year	£11,249	Long-term liabilities further strain equity
Net Assets (Equity)	£468	Equity almost depleted; severe erosion from £10,124 in 2022
Average Number of Employees	3	Small team consistent with micro-entity status

Interpretation:

• Although current assets increased significantly in 2023, current liabilities grew disproportionately, resulting in negative working capital. This "imbalance" is akin to a patient having plentiful energy reserves but facing severe immediate constraints that threaten survival.
• The sharp decline in net assets from £10,124 to just £468 reflects accumulated losses or increased liabilities, indicating the company’s financial "immune system" is severely weakened.
• Fixed assets dropped but remain moderate, suggesting some asset disposals or depreciation.
• The presence of creditors due beyond one year adds pressure on future cash flows.

---

3. Diagnosis

ULTRA CLEANING SOLUTIONS LTD is currently in a state of financial distress characterized by:

• Liquidity Issues: Negative net current assets imply that the company does not have sufficient short-term resources to meet immediate liabilities. This is a critical "symptom" that could lead to insolvency if not corrected.
• Equity Erosion: The near depletion of shareholders' funds signals ongoing losses or increasing debt, weakening the company’s financial backbone.
• Volatile Asset Base: Reduction in fixed assets and fluctuating current assets indicate instability in asset management or operational challenges.

This financial profile suggests the company is under stress, possibly due to operational losses, cash flow problems, or increased borrowing. Without intervention, the risk of insolvency or forced restructuring is elevated.

---

4. Recommendations

To nurse the company back to financial health, the following steps are advised:

• Improve Liquidity Management:

  • Accelerate collection of receivables and manage inventory tightly.
  • Negotiate extended payment terms with suppliers to ease immediate cash outflows.
  • Consider short-term financing or overdraft facilities to cover working capital gaps.

• Cost Control and Revenue Enhancement:

  • Review operating expenses critically; reduce non-essential costs.
  • Explore opportunities to increase sales or diversify services within specialised cleaning and wholesale sectors.

• Capital Structure Strengthening:

  • Evaluate possibilities for capital injection from shareholders or external investors to rebuild equity.
  • Consider converting short-term debt to longer maturities where feasible to reduce immediate pressure.

• Financial Monitoring:

  • Implement rigorous cash flow forecasting to detect distress symptoms early.
  • Regularly review financial ratios and liquidity indicators to monitor recovery progress.

• Professional Advice:

  • Engage financial advisors or turnaround specialists if liquidity issues persist, to avoid "medical emergency" scenarios like insolvency proceedings.

---