JCS INSTALLS LIMITED

Executive Summary

JCS INSTALLS LIMITED is currently facing significant financial challenges marked by negative working capital and net liabilities, signaling liquidity distress and potential insolvency risk. Immediate focus on cash flow management, debt restructuring, and capital injection is critical to restore financial health and ensure ongoing business viability.

JCS INSTALLS LIMITED - Analysis Report

Company Number: 15126932

Analysis Date: 2025-07-20 12:33 UTC

Financial Health Assessment for JCS INSTALLS LIMITED (As of 31 March 2025)

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1. Financial Health Score: D

Explanation:
The company exhibits signs of financial distress with a net liabilities position and negative working capital, indicating it is currently "unhealthy" in financial terms. The sharp deterioration from a positive net asset and working capital position in the prior year to a significant deficit signals urgent attention is required.

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2. Key Vital Signs:

Metric	2025	2024	Interpretation
Fixed Assets	£616	£773	Minimal long-term assets; stable but very small
Current Assets	£42,346	£33,329	Increased cash/debtors/inventory; positive sign
Current Liabilities	£68,679	£18,351	Sharp increase in short-term debts; alarming
Net Current Assets (Working Capital)	-£26,333	£14,978	Negative working capital indicates liquidity distress
Net Assets (Shareholders' Funds)	-£25,717	£15,751	Negative equity signals insolvency risk

Interpretation:

• Healthy cash flow is undermined by a large increase in current liabilities, likely short-term debts or payables, which exceed current assets.
• The symptom of distress is the negative working capital and net liabilities, indicating the company cannot cover its short-term obligations from liquid assets.
• Fixed assets are negligible, implying the business is not asset-intensive but likely service or labour-based.
• The shareholder equity has reversed from positive to negative, showing accumulated losses or increased debts.

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3. Diagnosis:

JCS INSTALLS LIMITED is currently in a financially vulnerable state. Despite growth in current assets, the disproportionate increase in current liabilities has resulted in negative working capital and net liabilities. This condition is akin to "acute financial strain," where the company’s short-term debts are overwhelming its liquid resources, threatening operational continuity if not addressed promptly.

The company is a micro-entity in the construction installation sector, typically with limited assets and employee numbers. However, the rapid deterioration over one year suggests cash flow management issues, possibly delayed receivables, increased payables, or rising operational costs not matched by revenues.

The change in directorship in May 2025 may reflect internal shifts to manage these challenges.

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4. Recommendations:

To restore financial health and prevent insolvency, the company should consider the following steps:

• Cash Flow Management:
  Conduct a detailed cash flow forecast to identify timing mismatches in inflows and outflows. Prioritize collection of receivables and negotiate extended payment terms with suppliers to ease liquidity pressure.

• Debt Restructuring:
  Engage with creditors to renegotiate payment terms or restructure short-term liabilities to manageable levels, possibly converting some into longer-term debt.

• Cost Control:
  Review and reduce discretionary expenses and overheads to preserve cash. Avoid unnecessary capital expenditures given the limited fixed assets.

• Capital Injection:
  Consider equity financing or director loans to shore up working capital and restore positive net assets, improving creditor and market confidence.

• Operational Review:
  Assess project profitability and pricing strategies to ensure sustainable margins, preventing further erosion of equity.

• Monitoring and Reporting:
  Implement regular financial health checks to detect early warning signs and take corrective action promptly.

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Medical Analogy Summary:

The company's financial "vital signs" reveal a patient (the business) suffering from "acute liquidity distress," with symptoms including negative working capital and net liabilities—a clear indication of financial "illness." Immediate intervention (cash flow and debt management) is essential to stabilize and "nurse" the business back to health.

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