AJC RECRUITMENT GROUP LTD

Executive Summary

AJC Recruitment Group Ltd demonstrates solid financial health with growing equity and positive working capital, indicating a stable business foundation. However, low cash reserves amid high receivables point to potential liquidity challenges that require improved cash flow management. With focused actions on debtor collection and liquidity enhancement, the company is well positioned for continued growth and financial wellness.

AJC RECRUITMENT GROUP LTD - Analysis Report

Company Number: 13559444

Analysis Date: 2025-07-19 12:57 UTC

Financial Health Assessment of AJC Recruitment Group Ltd

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1. Financial Health Score: B

Explanation:
AJC Recruitment Group Ltd exhibits solid foundational financial health with steady growth in net assets and positive working capital. The company’s balance sheet shows increasing net assets and shareholders’ funds over recent years, indicating accumulation of retained earnings and a stable equity base. However, the narrow margin of net current assets relative to current liabilities and the presence of secured creditors suggest some liquidity caution. Overall, the company appears financially stable but should monitor its short-term obligations closely to avoid any cash flow "symptoms of distress."

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2. Key Vital Signs

Metric	2025 Value	Interpretation
Net Assets	£7,961	Positive and increasing, showing growth in company’s equity.
Net Current Assets	£7,101	Positive working capital, but relatively small compared to liabilities, indicating limited liquidity buffer.
Current Assets	£223,982	Healthy level, mainly from debtors, but cash is low at £1,433.
Current Liabilities	£216,881	High current liabilities mainly comprising tax/social security and other creditors.
Cash Balance	£1,433	Very low cash on hand, could indicate tight cash flow despite healthy debtors.
Debtors	£222,549	High receivables, reflecting good sales but potential risk if collection slows.
Fixed Assets	£860	Minimal investment in long-term assets, typical for service/recruitment business.
Secured Creditors	£113,370	Significant secured debt may imply reliance on borrowing against assets or business.
Directors’ Loans	Net £28,094 owed to company	Positive sign that directors have advanced funds, showing commitment and support.
Employee Count	17 (up from 9)	Growth in workforce, indicating business expansion.

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3. Diagnosis: What the Financial Data Reveals

• Healthy Equity Growth: Net assets and shareholders' funds have increased steadily from £2 in 2021 to nearly £8,000 in 2025, indicating retained profits and successful operations.

• Working Capital and Liquidity: The company maintains a positive but modest net current assets position. This "healthy pulse" suggests the company can meet short-term debts but has limited cushion, and the very low cash balance is a "warning symptom" that cash flow management must be tight.

• Debtors Concentration: The bulk of current assets is tied up in debtors (£222,549), which reflects sales made on credit. This is a double-edged sword: good for revenue but risky if clients delay payments, potentially causing liquidity strain.

• Debt and Creditors: High current liabilities (£216,881) and significant secured creditors (£113,370) indicate the company relies on external financing. The removal of longer-term creditors in 2025 (previously £2,400) may mean debt restructuring or repayment.

• Directors’ Financial Support: Advances from directors totaling £28,094 net show strong commitment to maintaining the company’s liquidity and operations.

• Growth Signs: Increase in employee numbers shows operational scaling, which can improve future revenue but also increase overheads.

• No Audit Requirement: As a small company, the accounts are unaudited, which is normal but means less external scrutiny.

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4. Recommendations: Actions to Improve Financial Wellness

1. Improve Cash Flow Management:
The very low cash balance despite high receivables suggests delayed collection or timing issues. Implement tighter credit control policies and accelerate debtor collections to convert receivables into cash more quickly. Consider offering early payment incentives or more rigorous follow-ups.

2. Build Liquidity Buffer:
Aim to increase net current assets to create a more robust liquidity cushion. This could involve negotiating longer payment terms with creditors or reducing short-term liabilities where possible.

3. Monitor Debt Levels:
Review secured creditor arrangements to ensure debt servicing is sustainable. Explore refinancing options if interest or repayments become burdensome.

4. Continue Growth with Cost Control:
As the workforce expands, maintain careful control over personnel and overhead costs to protect profit margins.

5. Maintain Transparent Financial Reporting:
Though audit exemption applies, consider voluntary reviews or external advice for assurance and to prepare for future growth stages requiring full audits.

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Medical Analogy Summary

AJC Recruitment Group Ltd shows the "vital signs" of a growing company with a strong equity base and expanding operations. While its "heart" (net assets) is strong, the "circulatory system" (cash flow) shows signs of strain due to low cash despite healthy receivables. This "symptom" suggests the need for better "fluid management" (cash flow) to ensure the company remains "fit and resilient" against financial stresses.

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