JDH RESOURCES LTD

Executive Summary

JDH Resources Ltd is showing signs of financial distress with negative net assets and working capital deficits, indicating liquidity and solvency challenges. However, a significant reduction in borrowings is a positive development. Immediate action to inject capital and improve cash flow is crucial to stabilize and improve the company’s financial health.

JDH RESOURCES LTD - Analysis Report

Company Number: 13555994

Analysis Date: 2025-07-29 12:41 UTC

Financial Health Assessment for JDH RESOURCES LTD (as of 31 August 2024)

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1. Financial Health Score: D

Explanation:
The company is showing clear symptoms of financial distress. It operates with negative net assets and shareholders’ deficit, indicating that its liabilities exceed its assets. While the company remains active and is filing accounts on time, the negative equity and working capital issues negatively impact its financial health score. This grade reflects a concerning but not yet critical condition—there is still potential to recover with appropriate intervention.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Net Assets (Equity)	-£385	Negative net assets, a symptom of financial distress; liabilities exceed assets.
Current Liabilities	£607	Relatively low compared to prior year but still higher than current assets.
Current Assets (Debtors)	£222	Very low current assets, indicating poor short-term liquidity ("weak pulse").
Net Current Assets (Working Capital)	-£385 (approx.)	Negative working capital, indicating potential liquidity strain ("cash flow blockage").
Shareholders’ Funds	-£385	Deficit in equity means the company is technically insolvent on a balance sheet basis.
Loans and Borrowings	£7	Significant improvement from £769, showing reduction in short-term debt stress.
Average Staff Employed	1	Micro-scale operation, limiting operational complexity but also revenue potential.
Account Category	Small	Subject to small companies regime, with limited disclosure requirements.

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3. Diagnosis: What the Financial Data Reveals

• Negative Equity and Net Assets: JDH Resources Ltd has had negative net assets consistently over the last three years, signaling a chronic capital deficiency. This can be likened to a patient with a deficient blood count—there is an ongoing lack of financial "nutrients" or capital to sustain operations comfortably.

• Working Capital Deficiency: Negative net current assets indicate the company’s short-term liabilities exceed short-term assets, creating a liquidity crunch. This "cash flow blockage" might hinder the company’s ability to pay suppliers or meet day-to-day expenses promptly.

• Improved Debt Position: The company has significantly reduced its borrowings from £769 in 2023 to £7 in 2024. This is a positive sign of financial management, akin to a patient reducing harmful cholesterol levels.

• Limited Operational Scale: With only one employee (the director) and small asset base, the company operates on a micro scale. This restricts its ability to generate large revenue streams but keeps overheads low.

• No Profit and Loss Disclosure: The absence of a Profit & Loss account limits insight into operational profitability, but the retained earnings deficit suggests recurring losses or insufficient capital injections.

• Timely Compliance: Despite financial challenges, the company is up to date with filings and accounts, indicating good governance and regulatory compliance.

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4. Recommendations: Steps to Improve Financial Wellness

• Capital Injection or Restructuring: To address the negative equity and improve balance sheet health, consider a capital injection from shareholders or external investors. Alternatively, restructuring liabilities to reduce short-term pressure could stabilize the company.

• Improve Cash Flow Management: Strengthen debtor collections and manage creditors carefully to alleviate working capital strain. Introducing tighter credit terms or securing short-term financing might improve liquidity.

• Explore Revenue Growth or Cost Reduction: Evaluate business model and operational efficiency to increase turnover and profits. Given the small scale, even modest revenue improvements can have a meaningful impact.

• Regular Financial Monitoring: Establish regular financial reviews to monitor vital signs and detect emerging symptoms early, enabling proactive management.

• Seek Professional Advice: Engage with financial advisors or business turnaround specialists to develop a sustainable recovery plan.

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Medical Analogy Summary

JDH Resources Ltd is currently exhibiting "symptoms of financial distress" — negative net assets and working capital deficiency indicate its financial "vital signs" are weak. However, the reduction in borrowings is a positive sign, like a patient responding well to treatment. The company’s prognosis depends heavily on timely capital support and improved cash flow management to restore its financial "health" and avoid deterioration into insolvency.

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