J&D LOCUM SOLUTION LIMITED

Executive Summary

J&D Locum Solution Limited is currently facing liquidity challenges signified by a sharp decline in net current assets and shareholders’ funds. While cash reserves have increased, rising short-term liabilities threaten financial stability. Immediate focus on cash flow management, cost control, and potential capital infusion is essential to restore financial health and ensure sustainable operations.

J&D LOCUM SOLUTION LIMITED - Analysis Report

Company Number: 14157226

Analysis Date: 2025-07-20 13:49 UTC

Financial Health Assessment Report for J&D LOCUM SOLUTION LIMITED

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1. Financial Health Score: D

Explanation:
The company shows signs of financial strain with a very low net asset base (£251) and minimal working capital. Although the business remains active, the sharp decline in net current assets and shareholders’ funds compared to the previous year signals early symptoms of financial distress. This grade reflects a fragile financial condition requiring close monitoring and prompt remedial action.

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2. Key Vital Signs

Metric	2024 Value (£)	2023 Value (£)	Interpretation
Current Assets	26,062	18,420	Slight increase in liquid assets, mostly cash. Positive sign but not sufficient alone.
Cash	26,062	14,067	Increased cash balance is a vital positive sign ("healthy cash flow"), providing some buffer.
Debtors	0	4,353	No receivables in 2024 could indicate tighter credit control or fewer sales on credit.
Current Liabilities	25,811	12,188	More than doubled, a major concern indicating increased short-term obligations ("symptom of distress").
Net Current Assets (Working Capital)	251	6,232	Dramatic reduction, approaching zero, which is a critical warning sign of liquidity risk.
Net Assets / Shareholders’ Funds	251	6,232	Reflects equity erosion, putting the company close to a "financial frailty" state.
Share Capital	100	100	Stable, no new equity injection noted.
Profit and Loss Account Reserve	151	6,132	Large drop in retained earnings, indicating losses or distributions.

Additional Observations:

• No fixed assets are held, implying the company operates with minimal capital expenditure or owns no significant long-term assets.
• The company employs only 1 person (the director), which is typical for a micro or small entity but limits operational scale.

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3. Diagnosis

The company exhibits symptoms of financial distress, primarily liquidity strain, evidenced by the near depletion of net current assets and shareholders’ funds. Despite an increase in cash, the doubling of current liabilities undermines financial stability, suggesting either increased short-term borrowing or unpaid obligations accruing rapidly. The absence of debtors may mean the company is limiting credit sales, but it also raises questions about revenue sustainability.

The decline from £6,232 in net assets in 2023 to only £251 in 2024 signals an erosion of the company’s financial "immune system." Without sufficient working capital, the company risks becoming unable to meet immediate financial obligations, analogous to a patient whose vital signs are weakening.

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4. Recommendations

To improve financial wellness, the company should consider the following actions:

1. Strengthen Liquidity Management:

   • Closely monitor cash flow to ensure all liabilities can be met on time.
   • Negotiate extended payment terms with suppliers or creditors to reduce immediate liabilities.

2. Review Cost Structure:

   • Scrutinize all expenses to identify areas where cost savings or operational efficiencies can be realized.
   • Avoid unnecessary expenditures until financial stability improves.

3. Increase Revenue Streams:

   • Explore ways to diversify or increase income, such as expanding client base or service offerings.
   • Consider reintroducing credit sales carefully to balance cash inflows and client relationships.

4. Seek Additional Capital:

   • If feasible, inject fresh equity or secure longer-term financing to bolster working capital and reduce reliance on short-term debt.

5. Regular Financial Monitoring:

   • Implement frequent financial health check-ups, akin to medical checkups, to detect early warning signs and take corrective action promptly.

6. Engage Professional Advice:

   • Consult with financial advisors or turnaround specialists for tailored strategies to regain financial strength.

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