JENNERS CATERING WEARSIDE LTD

Executive Summary

Jenners Catering Wearside Ltd is financially stable with positive net assets but exhibits signs of tight liquidity due to high current liabilities relative to current assets. The company’s financial health is fair but requires careful cash flow and working capital management to avoid stress. Strengthening debtor collections and negotiating supplier terms are key steps to improve financial resilience and support future growth.

JENNERS CATERING WEARSIDE LTD - Analysis Report

Company Number: 14014915

Analysis Date: 2025-07-29 15:33 UTC

Financial Health Assessment for Jenners Catering Wearside Ltd
Date of Financial Year End: 31 March 2023

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1. Financial Health Score: Grade C

Explanation:
Jenners Catering Wearside Ltd exhibits a modest financial position typical of a young, small private company in the event catering sector. The company shows positive net current assets and net assets, indicating it is solvent and able to meet short-term obligations. However, the margins are thin, and working capital is limited, signaling early-stage development with some financial vulnerabilities. This equates to a "C" grade reflecting fair but cautious financial health needing monitoring and improvement.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	1,200	Minimal investment in long-term assets, typical for a startup or small service company.
Current Assets	26,842	Includes cash (£20,097), debtors (£3,714), and stock (£3,031), showing liquidity presence.
Current Liabilities	25,101	Short-term debts nearly equal current assets, tight working capital position.
Net Current Assets	1,741	Positive but small buffer indicating limited short-term liquidity cushion.
Net Assets (Equity)	2,941	Positive net worth, reflecting accumulated profits and shareholder investment.
Share Capital	100	Minimal share capital, typical for a micro/small company.
Average Number of Employees	12	Small workforce consistent with company size and industry.

Interpretation of Vital Signs:

• Liquidity: The company holds a “healthy cash flow” with cash constituting the majority of current assets, which is a positive sign ("heart rate" of cash flow looks steady). However, current liabilities are high, especially VAT and trade creditors, which indicates "symptoms of stress" in managing short-term obligations. The net current assets are positive but small, suggesting limited working capital reserves to absorb shocks or delays in receivables.
• Solvency: The positive net assets and shareholders’ funds confirm the company is solvent, with owners’ equity covering total liabilities. This is a good "blood pressure" reading indicating the company’s financial foundation is stable but modest.
• Asset Base: Fixed assets are minimal, reflecting the nature of a service-oriented business with low capital intensity. This is typical and not a concern unless growth requires asset investment.
• Revenue & Profitability: The company has elected not to file a profit and loss account publicly, but the positive retained earnings (profit and loss account) suggest some profitability or retained earnings accumulation.

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3. Diagnosis: Financial Condition

Jenners Catering Wearside Ltd is in the early stages of its lifecycle, showing a financially stable but fragile condition. The company’s "vital signs" indicate it is solvent and operating with positive net assets, but the tight working capital (small net current assets) and significant short-term liabilities (mainly VAT and trade creditors) are "symptoms of liquidity pressure." This means the company must carefully manage cash flow and creditor payments to avoid distress. The company’s minimal fixed assets and small share capital are consistent with its micro/small company profile.

The presence of 12 employees shows operational activity, but the company’s ability to fund growth or absorb unforeseen expenses may be limited without external financing or improved profitability.

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4. Recommendations: Improving Financial Wellness

1. Strengthen Working Capital:

   • Improve debtor collection processes to speed up cash inflows and reduce days sales outstanding.
   • Negotiate longer payment terms with suppliers to ease liquidity pressure.
   • Monitor VAT liabilities closely to avoid cash flow surprises.

2. Cash Flow Management:

   • Maintain a cash buffer to cover at least 1-2 months of current liabilities.
   • Prepare detailed cash flow forecasts to anticipate periods of strain and plan financing or cost adjustments accordingly.

3. Profitability and Cost Control:

   • Review pricing and cost structure to improve profit margins and boost retained earnings.
   • Control overheads and optimize employee productivity.

4. Growth and Capital Planning:

   • Consider modest capital injections or external finance if expansion is planned.
   • Assess investment needs in fixed assets only if justified by growth prospects.

5. Regular Financial Monitoring:

   • Establish monthly financial reviews focusing on liquidity ratios and working capital trends to detect early warning signs.

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