JACK & VICTOR LTD

Executive Summary

Jack & Victor Ltd exhibits significant financial challenges characterized by negative working capital and shareholders' funds, indicating liquidity and solvency pressures typical of a company under financial distress. Immediate action to improve cash flow, restructure debt, and stabilize governance is critical to prevent insolvency and restore financial health.

JACK & VICTOR LTD - Analysis Report

Company Number: SC684062

Analysis Date: 2025-07-29 20:43 UTC

Financial Health Assessment: JACK & VICTOR LTD (as of 30 April 2024)

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1. Financial Health Score: D (Poor)

Explanation:
The company shows persistent negative net current assets and shareholders' funds, indicating ongoing financial distress. While the business remains active, the financial "vital signs" suggest significant liquidity and solvency issues that require urgent attention.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	1,576	Minimal long-term asset base, common for micro entities; no significant capital investment.
Current Assets	84,436	Short-term assets including cash and receivables; moderate level but insufficient against debts.
Current Liabilities	132,310	Obligations due within one year; significantly higher than current assets, creating liquidity risk.
Net Current Assets	-47,874	Negative working capital ("symptom of distress"), indicating inability to cover short-term debts.
Total Assets less Liabilities	-46,298	Negative net assets; company equity is eroded, suggesting insolvency risk if condition persists.
Shareholders' Funds	-46,298	Negative equity; shareholders’ investment is effectively wiped out, indicating financial weakness.
Share Capital	10.00	Nominal capital; company heavily reliant on external funding or creditors.
Average Number of Employees	0	No employees; possibly minimal operations or reliance on contractors.

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3. Diagnosis: Financial Condition Analysis

• Liquidity Concerns:
  The company exhibits a chronic shortfall in working capital, with current liabilities exceeding current assets by nearly £48k. This "unhealthy cash flow" scenario means it may struggle to meet immediate obligations, which is a critical symptom of financial strain.

• Solvency Issues:
  Negative net assets and shareholders' funds indicate that total liabilities surpass total assets. This is a serious "diagnostic marker" of potential insolvency, where the company owes more than it owns.

• Operational Scale:
  Being a micro-entity with no employees and minimal fixed assets suggests a small-scale operation, likely relying on third-party services or owners’ efforts. This limits the ability to generate significant revenue or absorb financial shocks.

• Industry Context:
  Operating in wholesale of alcoholic beverages (SIC 46342) may involve inventory management and credit sales. The negative current assets position could indicate issues with inventory turnover or collection of receivables.

• Governance Notes:
  Two directors resigned in June 2024, leaving two current directors, which might reflect internal restructuring or response to financial challenges.

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4. Prognosis: Future Financial Outlook

Without corrective action, the company’s financial health may worsen, leading to:

• Increased risk of insolvency due to persistent negative working capital and equity.
• Potential difficulties in securing credit or supplier terms.
• Possible need for restructuring, capital injection, or creditor negotiations.

However, the company is not overdue on filings and remains active, which indicates it is managing compliance and possibly taking steps to address financial issues.

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5. Recommendations: Actions to Improve Financial Wellness

• Improve Cash Flow Management:
  Conduct a detailed review of receivables and payables. Accelerate collections and negotiate extended terms with creditors to relieve liquidity pressure.

• Capital Injection or Debt Restructuring:
  Explore equity funding or shareholder loans to restore positive net assets. Alternatively, negotiate with creditors to restructure debt obligations.

• Operational Efficiency:
  Assess cost structure and reduce unnecessary expenses. With zero employees, consider whether outsourcing or automation can reduce overheads further.

• Financial Monitoring:
  Implement robust cash flow forecasting and monthly financial reviews to detect early signs of distress and react promptly.

• Strategic Review:
  Evaluate the business model viability in the wholesale alcohol sector. Consider diversification or focus on higher-margin products to improve profitability.

• Director Stability and Governance:
  Maintain a stable and engaged board to guide turnaround efforts, ensuring clear accountability and strategic focus.

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Medical Analogy Summary

JACK & VICTOR LTD presents "symptoms of financial distress," notably an "unhealthy cash flow" with negative working capital and "eroded equity." These conditions resemble a patient with chronic liquidity deficiency and weakened financial "immune system." Without intervention, the risk of "financial collapse" (insolvency) remains high. Timely treatment through capital infusion and operational adjustments is essential for recovery.

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