J C & S K WILLIAMS LTD

Executive Summary

J C & S K WILLIAMS LTD demonstrates a solid asset foundation characteristic of a growing mixed farming business but faces liquidity challenges due to persistent negative working capital and increasing debt levels. To ensure long-term financial health, the company should focus on improving cash flow management, restructuring debt, and optimizing asset utilization. Prompt action will help avoid escalation of financial distress and support sustainable growth.

J C & S K WILLIAMS LTD - Analysis Report

Company Number: 12857567

Analysis Date: 2025-07-29 18:26 UTC

Financial Health Assessment of J C & S K WILLIAMS LTD

---

1. Financial Health Score: C

Explanation:
This company shows a moderate financial health profile with some concerning signs in working capital management and debt levels. While its asset base is growing and net asset value is positive, the persistent negative net current assets and significant long-term liabilities point to liquidity pressures that require careful management to avoid distress.

---

2. Key Vital Signs

Metric	2023 Value (£)	Interpretation
Fixed Assets	1,679,698	Growing asset base suggests investment in long-term productive capacity (farm property, equipment). Healthy structural foundation.
Current Assets	238,109	Current assets dropped compared to prior years, indicating reduced short-term liquidity.
Cash at Bank	57,392	Cash reserve has decreased significantly, indicating tighter cash flow.
Current Liabilities	730,298	High short-term debts, exceeding current assets, causing working capital deficit.
Net Current Assets	-455,680	Negative working capital—symptom of liquidity strain, potential difficulty meeting short-term obligations.
Long-Term Debt (Bank Loans)	730,298	Long-term liabilities increased notably, raising financial leverage and interest burden risk.
Net Assets (Equity)	390,615	Positive equity indicates that assets exceed liabilities overall, but equity growth is modest relative to liabilities.
Debt to Equity Ratio	Approx. 3.6	(Total debt £1,460,586 / Equity £390,615) High leverage, indicating reliance on external financing.
Turnover & Profitability	Not disclosed	No P&L data provided; thus, profitability and cash flow from operations cannot be assessed directly.

---

3. Diagnosis

The company is like a patient with a sturdy skeleton but weak circulation. Its fixed assets (land, property, machinery) form a strong backbone, growing steadily over recent years, which is encouraging for long-term sustainability in mixed farming operations.

However, the "circulatory system"—its working capital—shows symptoms of distress. Negative net current assets for several years indicate the company struggles to balance short-term liabilities with readily available current assets such as cash, debtors, and stock. This can hinder day-to-day operations, supplier payments, and payroll, risking operational disruption.

The growing long-term bank loans and hire purchase agreements reflect increased borrowing to fund asset acquisition or operations. While debt can be a healthy stimulant, the current debt to equity ratio of approximately 3.6 suggests over-reliance on leverage, increasing vulnerability to interest rate rises or income volatility inherent in farming.

Absence of profit and loss data limits insight into operational profitability and cash generation capacity, but the falling cash reserves and debt increase imply cash flow pressures.

In summary, the company has a solid asset base but exhibits liquidity and leverage concerns. Without corrective action, these symptoms could escalate into financial strain or distress.

---

4. Recommendations

• Improve Working Capital Management:
  Prioritize reducing current liabilities where possible, negotiate longer payment terms with creditors, and accelerate collection of debtors. A healthy "circulatory system" (positive working capital) is critical to maintain operational fluidity.

• Cash Flow Monitoring and Forecasting:
  Implement rigorous cash flow forecasting to anticipate liquidity gaps. Maintain a minimum cash buffer to handle unforeseen expenses or seasonal fluctuations typical in farming.

• Debt Restructuring:
  Engage with lenders to explore refinancing options to reduce short-term debt burden and smooth repayment schedules. Consider consolidating loans or extending maturities to reduce immediate pressure.

• Asset Utilization Review:
  Assess fixed assets for underutilization or non-core holdings that could be sold to generate cash. Maintaining a lean and efficient asset base can improve financial flexibility.

• Profitability Analysis:
  Although P&L data is not filed, the company should conduct internal profitability reviews to identify margins by activity and cut non-profitable operations.

• Seek Professional Advice:
  Given the signs of financial strain, consulting financial advisors or farm business consultants can help develop a turnaround plan and access available grants or subsidies in the agricultural sector.

---