JDK AUTOMOTIVE LIMITED

Executive Summary

JDK AUTOMOTIVE LIMITED is currently facing financial challenges characterized by negative net assets and liquidity deficits, indicating underlying financial distress despite operational compliance. Immediate focus on liquidity improvement and capital reinforcement is essential to stabilise the company's financial health and support sustainable growth.

JDK AUTOMOTIVE LIMITED - Analysis Report

Company Number: 13836888

Analysis Date: 2025-07-29 16:39 UTC

Financial Health Assessment of JDK AUTOMOTIVE LIMITED

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1. Financial Health Score: D

Explanation:
JDK AUTOMOTIVE LIMITED shows significant signs of financial distress primarily due to negative net assets and worsening working capital position. Despite being active and maintaining timely filings, the company’s balance sheet indicates a weak equity base with increasing liabilities compared to assets, which lowers financial stability. The absence of employees also suggests limited operational scale or early-stage development, contributing to financial strain.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Net Assets	£-133,261	Negative net assets indicate liabilities exceed assets—symptom of financial vulnerability.
Net Current Assets (Working Capital)	£-381,178	Current liabilities exceed current assets, indicating liquidity issues and potential cash flow problems.
Cash at Bank	£49,339	Low cash reserves relative to liabilities, reflecting potential difficulty in meeting immediate obligations.
Fixed Assets	£1,156,229	Significant investment in fixed assets; however, these are less liquid and may not cover debts quickly.
Debtors	£267,044	Substantial receivables tied up, which if delayed, could worsen cash flow symptoms.
Current Liabilities	£908,312	High short-term debts relative to current assets, a critical symptom of distress in liquidity management.
Shareholders’ Funds	£-133,263	Negative equity reflects accumulated losses or funding gaps, undermining solvency.
Employees	0	No employees, which may signal reliance on contractors or a nascent stage, impacting operational capacity.

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3. Diagnosis

The company is exhibiting symptoms of financial distress, primarily liquidity stress and negative equity. The working capital deficit and negative net assets suggest the company is currently undercapitalized and may face challenges meeting short-term obligations without additional funding or improved cash inflows. The reduction in intangible assets and increase in tangible fixed assets likely reflect capital expenditure, but this has not translated into a stronger financial position yet.

The sizeable current liabilities, exceeding current assets, signal a "cash flow cold" state where immediate outflows surpass readily available resources. Debtors are substantial, but delays in collection could exacerbate liquidity issues. Negative shareholders’ funds indicate the company has accumulated losses or funding deficits since incorporation.

However, the company remains active with no overdue filings, indicating management attention to statutory compliance. The presence of experienced directors and significant control by two individuals suggest a stable governance structure, but operational scaling or financial restructuring may be necessary.

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4. Recommendations

• Improve Liquidity Management: Accelerate debtor collections, negotiate better payment terms with creditors, and maintain a minimum cash buffer to avoid liquidity crises.
• Capital Injection: Consider equity funding or shareholder loans to restore positive net assets and improve solvency.
• Cost Control: Review operational expenses, especially considering zero employees, to ensure costs align with sustainable revenue streams.
• Asset Utilization: Evaluate fixed asset usage and consider disposing of non-essential assets to release cash and reduce depreciation burden.
• Financial Monitoring: Implement regular cash flow forecasting to detect and address early signs of distress.
• Business Development: Focus on revenue growth strategies to improve profitability and strengthen retained earnings.
• Engage Expert Advice: Seek professional financial advice to explore restructuring options or refinancing if necessary.

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