AJR MULTI TRADE LTD

Executive Summary

AJR MULTI TRADE LTD shows a solid financial foundation with improving net assets and strong working capital, indicating good short-term financial health. However, limited cash reserves and a director loan highlight liquidity management areas to monitor closely. With focused cash flow improvements and prudent financial controls, the company is well-positioned for continued stable growth.

AJR MULTI TRADE LTD - Analysis Report

Company Number: 14034541

Analysis Date: 2025-07-20 18:57 UTC

Financial Health Assessment for AJR MULTI TRADE LTD
Assessment Date: Financial Year Ending 30 April 2024

---

1. Financial Health Score: B

Explanation:
AJR MULTI TRADE LTD presents a solid and improving financial position with a healthy increase in net assets and net current assets year-on-year. The company shows strong working capital management with net current assets significantly exceeding current liabilities. However, limited cash reserves and a director loan indicate some liquidity caution. Overall, the company is financially stable but should monitor cash flow closely as it grows.

---

2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Current Assets	28,915	Increased substantially, indicating improved short-term resources.
Cash	2,017	Low cash balance relative to current liabilities; potential liquidity constraint.
Debtors	26,898	High receivables, possibly indicating extended credit terms or slow collections.
Current Liabilities	9,259	Manageable short-term obligations but rising from prior year.
Net Current Assets (Working Capital)	19,656	Strong positive working capital, a sign of good short-term financial health.
Net Assets (Equity)	20,217	Growth in net worth, reflecting retained earnings and asset accumulation.
Director's Loan	4,605	Loan to director suggests internal financing; repayment terms and timing should be monitored.
Tangible Fixed Assets	693	Low fixed asset base, typical for a service/trade company, with disposals reducing asset holdings.

---

3. Diagnosis

AJR MULTI TRADE LTD exhibits symptoms of financial robustness with improving net assets and positive working capital, indicating the company can cover its short-term debts comfortably. The rise in debtors suggests increased sales or extended credit terms, which is a double-edged sword: while it may drive revenue growth, it also ties up cash in receivables, potentially straining liquidity.

The low cash balance relative to current liabilities and the director loan outstanding indicate a mild liquidity symptom that should be watched closely. The company is effectively using internal financing to bridge cash flow gaps, but this is not a sustainable long-term solution without cash inflow improvements.

The company is young (incorporated in 2022) and is in the manufacturing of builders' carpentry and joinery, a sector that typically involves project-based billing and may have variable cash flow cycles. The reduction in tangible fixed assets and depreciation suggests asset turnover and possibly a lean operational model.

No overdue filings or legal distress symptoms are noted, and the director holds full control, which may allow for swift decision-making but also concentrates risk.

---

4. Recommendations

To enhance financial wellness and address potential symptoms:

• Improve Cash Flow Management:
  Prioritize faster collection of debtors. Consider stricter credit control policies or offering early payment incentives to improve cash conversion.

• Monitor Director Loan:
  Establish a clear repayment plan for the director loan to avoid potential conflicts of interest and improve the company's liquidity position.

• Build Cash Reserves:
  Aim to increase cash holdings to cover at least 3 months of current liabilities to cushion against unexpected expenses or delays in debtor payments.

• Asset Management:
  Review the necessity of fixed assets and consider leasing options or outsourcing to keep capital expenditure low and maintain flexibility.

• Forecasting & Budgeting:
  Implement rolling cash flow forecasts to anticipate liquidity needs and plan financing or investment actions accordingly.

• Maintain Compliance:
  Continue timely filing and regulatory compliance to avoid penalties or reputational damage.

---