JAMES VAUGHAN PROPERTIES LIMITED

Executive Summary

JAMES VAUGHAN PROPERTIES LIMITED shows a stable but weakening financial condition with strong cash reserves offset by increasing liabilities and diminishing equity. Prompt actions on cash flow management and cost control are recommended to restore financial vitality and safeguard long-term sustainability.

JAMES VAUGHAN PROPERTIES LIMITED - Analysis Report

Company Number: 13119572

Analysis Date: 2025-07-20 12:24 UTC

Financial Health Assessment: JAMES VAUGHAN PROPERTIES LIMITED (as of 31 January 2024)

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1. Financial Health Score: C

Explanation:
JAMES VAUGHAN PROPERTIES LIMITED demonstrates moderate financial stability but shows signs of emerging pressures on liquidity and net assets. The company’s working capital remains positive, indicating a "healthy cash flow" position for short-term obligations. However, a notable decline in net assets and shareholder funds year-on-year signals "symptoms of distress" that require careful monitoring and strategic management.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	390,062	300,822	Increased, showing improved short-term resources
Cash at Bank	331,792	272,998	Strong cash position, positive liquidity sign
Debtors	58,270	27,824	Doubled, indicates more money owed to company
Current Liabilities	303,923	193,951	Increased significantly, rising short-term debts
Net Current Assets	86,139	106,871	Declined, less buffer to cover short-term debts
Creditors due after 1 year	29,995	29,995	Steady long-term liabilities
Net Assets (Shareholders’ funds)	56,585	77,818	Decreased by ~27%, indicating erosion of equity
Share Capital	100	100	Nominal, typical for small private company
Tangible Fixed Assets	441	942	Small fixed asset base, minimal capital investment

Interpretation:

• Liquidity ("Cash Flow Health"): The company holds a strong cash reserve relative to current liabilities, but the rise in current liabilities outpaces the growth in current assets, causing a decline in net current assets. This suggests tighter liquidity conditions ahead if obligations increase or cash inflows slow.
• Working Capital ("Operational Buffer"): Positive but shrinking, showing the company can cover short-term liabilities but with less margin for error.
• Equity Position ("Financial Resilience"): A significant drop in net assets and shareholders’ funds suggests the company is consuming reserves or encountering operational losses. This is a red flag for long-term viability if the trend continues.
• Debt Levels ("Financial Strain"): Current liabilities surged by 56% year-over-year, which may indicate increased borrowing, accrued expenses, or delayed payments. Long-term liabilities remain constant but are notable given the small equity base.

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3. Diagnosis

JAMES VAUGHAN PROPERTIES LIMITED is currently in a cautiously stable state but showing early signs of financial stress. The "vital signs" indicate the company’s "heart" — its liquidity and operational cash flow — is still beating, supported by a strong cash balance. However, the "symptoms" such as a shrinking equity base, rising current liabilities, and decreased net working capital reveal underlying financial strain. These may be caused by increased operational costs, slower receivables collection, or higher short-term debt use.

The company remains solvent but less robust than in the previous year. If these trends persist, the risk of "financial fatigue" increases, potentially leading to liquidity crunches or the need for external funding.

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4. Recommendations

• Improve Cash Flow Management:
  Prioritize faster collection of debtors and negotiate longer payment terms with creditors to ease pressure on working capital. A healthy "cash flow pulse" is critical to avoid liquidity distress.

• Cost Control and Expense Review:
  Analyze rising current liabilities to identify avoidable expenses or operational inefficiencies. Tighten budgeting to preserve net assets and equity.

• Equity Injection or Financing Strategy:
  Consider raising additional equity capital or restructuring debt to strengthen the balance sheet. Maintaining a healthy "financial immune system" through adequate capital buffers is essential for future growth.

• Monitor Financial KPIs Regularly:
  Implement monthly financial reviews focusing on liquidity ratios, net assets, and cash flow forecasts to detect and respond quickly to any deterioration.

• Strategic Growth Planning:
  Since the company operates in real estate agencies and building development, evaluate market opportunities carefully to ensure new projects or sales contribute positively to profitability and cash inflows.

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Executive Summary