JCA GROUP CONSULTING LIMITED

Executive Summary

JCA Group Consulting Limited maintains a solid net asset base but struggles with persistent negative working capital, indicating liquidity challenges. The company relies heavily on group funding to support short-term obligations, signaling cash flow stress. Addressing liquidity management and reducing dependency on related party financing will be key to improving financial health and future stability.

JCA GROUP CONSULTING LIMITED - Analysis Report

Company Number: 13801670

Analysis Date: 2025-07-29 17:14 UTC

Financial Health Assessment Report: JCA GROUP CONSULTING LIMITED

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1. Financial Health Score: C+

Explanation:
The company shows moderate financial health with a relatively strong net asset position but significant liquidity concerns reflected in persistent negative working capital. The score C+ reflects a business with solid equity backing but symptoms of cash flow stress and reliance on related party funding, indicating caution is warranted.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Net Assets (Shareholders’ Funds)	412,713	Healthy equity base, growing steadily over years.
Current Assets	9,970	Small short-term asset pool, slight growth observed.
Cash at Bank	7,775	Cash position improved but still modest.
Debtors	2,195	Low level of receivables; no significant increase.
Current Liabilities	174,073	Very high short-term obligations, increasing trend.
Net Current Assets (Working Capital)	-164,103	Negative working capital; liquidity strain evident.
Long-Term Liabilities	56,524	Reduction in long-term debt, positive sign.
Share Capital	204	Minimal share capital; core equity mainly retained earnings and share premium.

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3. Diagnosis: Financial Symptoms and Underlying Health

• Negative Working Capital ("Cash Flow Symptoms"):
  The company consistently reports a large deficit in net current assets (current assets less current liabilities), showing a shortfall of over £160k in the latest year. This indicates that the business may struggle to meet its short-term obligations with liquid assets alone, a classic symptom of liquidity distress.

• Reliance on Group Funding ("Related Party Dependency"):
  A significant portion of current liabilities consists of amounts owed to group undertakings (£132k in 2024, up from £15.9k in 2023). These are unsecured, interest-free, and repayable on demand, suggesting the company is relying on internal group funding to plug liquidity gaps rather than external financing or operational cash flow.

• Equity Growth and Investment Stability ("Healthy Net Asset Base"):
  Despite working capital issues, the net assets have increased by approximately £53k over the year, suggesting retained earnings growth and/or capital injections (e.g., share premium increasing from zero to £2,191). The company’s fixed assets (investments in subsidiaries) remain substantial (£633k), underpinning the net asset position.

• Debt Structure Improvement:
  Long-term liabilities have reduced from ~£177k to £56.5k, showing a positive trend in debt management and potential reduction in financial risk over time.

• Small Operational Footprint:
  The company is classified as a small entity, with limited turnover and employees (average 4 employees), consistent with being a holding company rather than an operational trading entity. This limits cash flows from operations and increases dependency on group funding.

• No Audit and Limited Financial Detail:
  The accounts are unaudited and do not include an income statement, restricting insight into profitability and operational performance. This limits the diagnostic scope regarding earnings quality and cash generation.

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4. Recommendations: Steps to Improve Financial Wellness

• Improve Liquidity Management:
  Focus on converting non-liquid assets or obtaining additional short-term funding to cover the negative working capital symptom. Establish a clear plan to reduce current liabilities or increase current assets, especially cash reserves.

• Reduce Reliance on Group Financing:
  Engage with group companies to formalize repayment schedules on intercompany balances or consider external financing options to diversify funding sources and reduce risk.

• Enhance Cash Flow Forecasting:
  Implement rigorous cash flow forecasting and management practices to anticipate liquidity needs proactively and avoid short-term cash shortages.

• Strengthen Capital Base if Possible:
  Consider capital injections or increasing share capital to bolster equity, providing a stronger buffer against financial distress.

• Seek Audited Accounts and Full Financial Statements:
  To improve transparency and stakeholder confidence, prepare audited accounts including income statements, enabling a fuller assessment of profitability and operational health.

• Monitor Debt and Creditors:
  Continue reducing long-term liabilities prudently and negotiate better terms with creditors where feasible to ease short-term pressure.

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Medical Analogy Summary

JCA Group Consulting Limited has a "strong skeleton" — its net assets and investments provide a solid structural base. However, it is showing "symptoms of distress" in its "circulatory system" — liquidity and working capital — which could impede healthy day-to-day operations if not addressed. The current financial "pulse" suggests caution, with a need to improve "blood flow" (cash management) to ensure overall vitality.

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