Company Number: 12865558

Analysis Date: 2025-07-29 16:09 UTC

1. Risk Rating: MEDIUM

Justification: FourJaw Manufacturing Analytics Ltd presents a solid asset base with positive net current assets and net equity, indicating fundamental solvency. However, there is a significant accumulated deficit in the profit and loss reserve, reflecting historical losses that offset shareholders’ funds, and a notable decrease in cash reserves in 2024 compared to 2023. These factors introduce concerns regarding liquidity and ongoing operational profitability, warranting a medium risk rating.

2. Key Concerns:

• Declining Cash Balance: Cash at bank fell substantially from approximately £1.44m in 2023 to £731k in 2024, which may signal cash flow pressure or increased operating costs.
• Increasing Accruals and Deferred Income: Accruals and deferred income nearly doubled from £110k in 2023 to £193k in 2024, potentially indicating growing liabilities or deferred revenue recognition complexities.
• Accumulated Losses: The profit and loss reserve reached a negative £1.99m at the end of 2024, worsening from negative £1.26m in 2023, which may question ongoing profitability and sustainability without additional capital or improved margins.

3. Positive Indicators:

• Strong Net Current Assets: The company maintains a healthy net current asset position (£942k in 2024), demonstrating the ability to cover short-term liabilities.
• Shareholders’ Funds and Share Premium: Shareholders’ funds remain positive at £3.11m, reflecting substantial paid-in capital, which provides a buffer against operational losses.
• Growing Workforce: The average employee count increased from 11 in 2023 to 27 in 2024, suggesting business expansion and potential growth in operations.
• No Filing or Compliance Issues: Accounts and confirmation statements are up to date with no overdue filings, indicating good regulatory compliance.

4. Due Diligence Notes:

• Investigate the reasons behind the significant cash reduction in 2024, including operating expenses, capital expenditures, or working capital changes.
• Review the nature and timing of accruals and deferred income to assess their impact on liquidity and revenue recognition.
• Examine management plans to address accumulated losses and achieve sustainable profitability, including revenue growth strategies and cost controls.
• Assess customer concentration and debtor quality, given that trade debtors have increased significantly, to evaluate credit risk.
• Confirm whether there are any contingent liabilities or off-balance sheet obligations not disclosed in the accounts.
• Understand the company’s lease commitments (£91k over next five years) and their impact on future cash flows.