JB STUDIO LTD

Executive Summary

JB STUDIO LTD presents a stable but contracting financial profile with positive net assets and working capital sufficient to service short-term obligations. However, the significant increase in current liabilities and decline in equity require cautious credit extension and ongoing monitoring of liquidity and operational performance. Credit may be conditionally approved with limits aligned to the company’s modest scale and cash flow stability.

JB STUDIO LTD - Analysis Report

Company Number: 12461786

Analysis Date: 2025-07-20 19:07 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   JB STUDIO LTD is a micro-entity operating in photographic activities with stable management and no overdue statutory filings. The company shows positive net assets and working capital, indicating it can meet short-term obligations. However, a notable decline in net assets and current assets from 2023 to 2024 signals some financial contraction that warrants close monitoring. Given the small scale, limited capital base (£100 share capital), and recent reduction in liquidity, credit should be extended cautiously with limits aligned to the company’s size and cash flow capacity.

2. Financial Strength:
   The balance sheet at 31 March 2024 shows net assets of £44,766, down from £68,927 in 2023, a 35% reduction. Fixed assets decreased to £17,849 from £23,008, and current assets fell to £53,318 from £45,484 the prior year, though this masks a large drop in debtors compared to previous years (2023 debtor figures were £175,543, now not reported, likely reduced). Current liabilities increased substantially from £565 to £26,401, which is a material increase in short-term obligations. Despite this, net current assets remain positive at £26,917, supporting working capital adequacy. Shareholders’ funds remain positive, reflecting retained earnings, but the downward trend in equity suggests caution.

3. Cash Flow Assessment:
   The company’s liquidity position is moderate. Current assets include cash and receivables sufficient to cover current liabilities more than once, with a net current asset ratio above 1. However, the sharp rise in current liabilities from £565 to £26,401 could pressure short-term liquidity if not managed. The cash balance is not explicitly stated for 2024 but was £41,556 in 2023; absence of clear cash figures in 2024 accounts requires verification. The company’s ability to convert debtors into cash promptly and control payables will be critical for ongoing liquidity management.

4. Monitoring Points:

• Track quarterly cash flow and debtor collection efficiency to ensure liquidity does not deteriorate further.
• Monitor current liabilities closely, especially any trade creditors or short-term loans that could impact solvency.
• Watch for any adverse changes in net assets or equity that may signal sustained profitability issues or capital erosion.
• Review management’s plans to address the decline in net assets and increased liabilities to assess operational resilience.
• Confirm no director disqualifications or governance issues arise, considering the tight family control structure.