J C THOMAS LTD

Executive Summary

J C Thomas Ltd exhibits critical signs of financial distress with negative net assets and liquidity shortages undermining its operational stability. Prompt action on cash flow management, expense reduction, and capital infusion is required to avert further deterioration and support recovery.

J C THOMAS LTD - Analysis Report

Company Number: 14469677

Analysis Date: 2025-07-20 12:23 UTC

Financial Health Assessment for J C THOMAS LTD (as at 30 November 2024)

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1. Financial Health Score: D

Rationale:
The company shows clear signs of financial distress in the latest year, with negative net assets and net current liabilities, indicating an unhealthy financial state. This warrants a below-average grade reflecting concerns about liquidity and solvency.

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2. Key Vital Signs

Metric	2023 (£)	2024 (£)	Interpretation
Current Assets	7,609	1,531	Sharp decline in liquid resources (cash down from £7,609 to £1,531) indicates tightening liquidity.
Current Liabilities	3,365	4,617	Increased short-term debts putting pressure on cash flow.
Net Current Assets (Working Capital)	5,644	-3,086* (Note below)	Shift from positive to negative working capital signals cash flow distress.
Total Assets less Current Liabilities	4,744	-340	Assets insufficient to cover short-term obligations.
Net Assets (Shareholders’ Funds)	1,379	-4,957	Negative equity signals insolvency on a balance sheet basis.
Retained Earnings	1,378	-4,958	Accumulated losses wiping out shareholders’ funds.

*Note: The reported Net Current Assets for 2024 is -340, which appears to be a reporting or classification nuance. Current liabilities (4,617) minus current assets (1,531) is actually -3,086. The company may have reclassified some current liabilities as long-term payables, but overall liquidity is weak.

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3. Diagnosis: What the Numbers Reveal About Business Health

• Liquidity Crisis ("Weak Pulse"): The company’s cash reserves have shrunk drastically by 80% year-on-year, from £7,609 to £1,531, while current liabilities have increased. This results in a negative working capital position, meaning the company does not have enough short-term assets to cover immediate debts. This is a classic symptom of cash flow strain and potential inability to meet upcoming obligations without new financing or operational improvements.

• Balance Sheet Deterioration ("Organ Failure"): The net assets have swung from a positive £1,379 to a negative nearly £5,000, indicating the company has absorbed losses that erode the capital invested by shareholders. Negative shareholders’ funds suggest the company is technically insolvent, which may limit access to credit and damage stakeholder confidence.

• Operational Scale: The company is very small, employing just one person, and classified under SIC code 86101 (Hospital activities). This niche and scale might restrict rapid revenue generation and increases dependence on tight financial management.

• No Audit and Limited Disclosure: The company has opted for small company exemptions, meaning no profit and loss statement is publicly available, which can obscure full understanding of operational performance and profitability trends.

• Control and Governance: Sole control by Ms. Joan Cecilia Alexander (holding 75-100% shares and voting rights) signifies centralized decision-making, which can be both a strength (quick decisions) and a risk (limited oversight).

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4. Recommendations: Steps to Improve Financial Wellness

• Immediate Cash Flow Management:

  • Prioritize collection of any outstanding receivables and negotiate extended payment terms with creditors to ease short-term pressures.
  • Consider short-term financing options such as a revolving credit facility or bridging loan to stabilize liquidity.

• Cost Control and Revenue Growth:

  • Review operational expenses to identify and cut non-essential costs immediately.
  • Explore ways to increase service delivery or diversify income streams within hospital activities to boost revenue.

• Capital Injection:

  • The negative equity position suggests a need for fresh capital — either through shareholder loans, equity injection, or external investors — to restore solvency and fund operations.

• Financial Reporting and Transparency:

  • Prepare more detailed internal management accounts to monitor profitability and cash flow closely and inform timely decisions.
  • Consider voluntary audit or review to reassure lenders and partners about financial integrity.

• Strategic Review:

  • Engage with a financial advisor or turnaround specialist to conduct a full diagnostic of business model viability and explore restructuring options if necessary.

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Executive Summary

J C Thomas Ltd is facing significant financial stress as evidenced by a sharp decline in cash reserves, increased liabilities, and negative net assets, indicating a liquidity crisis and balance sheet insolvency. Immediate focus on cash flow management, cost control, and capital injection is essential to stabilize operations and restore financial health. Without intervention, the company risks ongoing distress that could jeopardize its viability.