AZAREL JACOBS LIMITED

Executive Summary

Azarel Jacobs Limited is financially solvent with positive working capital but exhibits signs of contraction in assets and equity from the prior year. The company maintains healthy liquidity yet should focus on strengthening cash flow, diversifying income, and rebuilding reserves to secure long-term financial wellness. Proactive financial management and strategic growth initiatives are recommended to enhance stability and future prospects.

AZAREL JACOBS LIMITED - Analysis Report

Company Number: 13528214

Analysis Date: 2025-07-29 15:53 UTC

Financial Health Assessment for Azarel Jacobs Limited as of 31 March 2024

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1. Financial Health Score: C

Explanation:
Azarel Jacobs Limited shows a cautious financial health profile typical of a micro entity in its early years. The company maintains positive net current assets and shareholders’ funds, indicating a solvent position. However, there is a noticeable decline in asset size and working capital from the previous comparable period, signaling potential stress or contraction. The score "C" reflects a stable but vulnerable financial condition requiring close monitoring and proactive management to ensure sustainability.

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2. Key Vital Signs (Core Financial Metrics):

Metric	31-Mar-2024	31-Mar-2023	Interpretation
Fixed Assets	£3,683	£4,305	Slight decline; minimal long-term investment exposure.
Current Assets	£13,156	£62,712	Significant reduction; potential liquidity tightening.
Current Liabilities	£1,596	£12,528	Sharp decline; reduced short-term obligations.
Net Current Assets	£11,560	£50,184	Healthy working capital but reduced by 77%.
Total Assets less CL	£15,243	£54,489	Overall asset base has shrunk substantially.
Shareholders’ Funds	£15,243	£54,489	Equity base declined, indicating reduced retained earnings or capital.

Interpretation:

• Liquidity ("Healthy cash flow"): Net current assets remain positive, suggesting the company has more short-term assets than liabilities, which is a good indicator of liquidity.
• Asset base shrinkage ("Symptoms of distress"): The marked reduction in current assets and shareholders’ funds may indicate reduced sales, cash burn, or asset disposals.
• Solvency: Shareholders’ funds are positive, meaning the company’s net worth is above zero, a sign of solvency.

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3. Diagnosis — What the Financial Data Reveals:

• Early-stage business with contraction signs: Being incorporated in 2021, Azarel Jacobs Limited is still young. The sharp reduction in current assets and equity suggests the company may be investing less, facing revenue shortfalls, or managing cash more cautiously.
• Liquidity is intact but lower: Positive net current assets confirm that short-term obligations can be met, but the significant decrease from the prior year warns of tightening liquidity.
• Limited fixed asset investment: The company holds minimal fixed assets, consistent with a software development business model that relies more on intellectual capital than physical assets.
• Single employee operation: The company operates with one employee, likely the director, which limits operational capacity but controls overhead costs.
• No audit requirement: As a micro entity, the company benefits from simplified reporting but lacks external assurance, making internal controls and financial discipline critical.
• Owner-controlled governance: The sole director and shareholder is Mr. Azarel Jacobs, ensuring streamlined decision-making but also concentration risk.

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4. Recommendations — Specific Actions for Improving Financial Wellness:

• Enhance cash flow management: Monitor cash inflows and outflows closely to avoid liquidity crunches, especially given the reduced current assets. Consider forecasting monthly cash flows.
• Diversify revenue streams: As a software developer, exploring multiple client contracts or recurring revenue models can stabilize income and reduce financial volatility.
• Cost control and scalability: Maintain lean operations but plan for scalable growth, potentially hiring or outsourcing as workload increases.
• Build reserves: Aim to rebuild shareholders’ funds through retained earnings or capital injections to provide a buffer against future downturns.
• Regular financial reviews: Despite micro-entity exemption from audit, consider periodic external reviews or financial advice to detect early warning signs.
• Strategic investment: Evaluate fixed asset purchases or technology upgrades judiciously to support business growth without overstretching resources.
• Governance and risk management: Ensure compliance with Companies House filings and maintain transparent records to support creditworthiness and stakeholder confidence.

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Executive Summary