J P PRECISION SERVICES LTD

Executive Summary

J P Precision Services Ltd operates with a weak balance sheet characterized by persistent working capital deficits and minimal equity, resulting in poor financial resilience. The company’s small scale and lack of liquidity limit its ability to service credit obligations reliably, leading to a recommendation to decline credit facilities currently. Close monitoring of liquidity improvements and capitalization is advised before reconsidering credit exposure.

J P PRECISION SERVICES LTD - Analysis Report

Company Number: SC680543

Analysis Date: 2025-07-20 13:32 UTC

1. Credit Opinion: DECLINE
   J P Precision Services Ltd shows ongoing net current liabilities and minimal net assets over the last four years, with shareholders' funds declining to a low £193 in 2023. The company operates at a micro scale with a very limited asset base and negative working capital, indicating inadequate short-term liquidity to meet obligations. Without evidence of profitability or positive cash flow improvements, the risk of default on credit facilities is elevated, making approval for new credit facilities inappropriate at this time.

2. Financial Strength:
   The balance sheet reveals very low fixed assets (£1,290) and current assets (£7,950) against current liabilities exceeding £9,000, resulting in net current liabilities of approximately £1,100. Shareholders’ funds have decreased from £529 in 2022 to £193 in 2023, reflecting little retained earnings or capital injection. The company’s micro classification and small scale limit financial flexibility. The financial position is fragile, with minimal buffer to absorb shocks or support growth.

3. Cash Flow Assessment:
   Current liabilities consistently exceed current assets, showing a working capital deficit. Negative net current assets imply the company may struggle to cover short-term liabilities as they fall due. The absence of cash flow statements makes precise liquidity analysis difficult, but the balance sheet suggests constrained liquidity and potential reliance on external support or director funding. The single director structure further concentrates operational risk.

4. Monitoring Points:

• Track improvements in net current assets and working capital position with future filings.
• Monitor any increases in share capital or external funding injections.
• Watch for changes in creditor days or any overdue payments indicating liquidity stress.
• Review profitability trends and cash flow generation once available.
• Assess director’s conduct and any related party transactions due to single director setup.