JEREMY CROSS AND ASSOCIATES LTD

Executive Summary

Jeremy Cross and Associates Ltd is financially solvent with positive net assets but exhibits signs of fragility due to a very narrow working capital margin and high reliance on director loans. The company maintains stable operations as a micro-entity consultancy but should focus on strengthening liquidity, reducing dependency on owner financing, and building cash reserves to improve financial resilience and support sustainable growth.

JEREMY CROSS AND ASSOCIATES LTD - Analysis Report

Company Number: 13275285

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

Financial Health Assessment of Jeremy Cross and Associates Ltd

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1. Financial Health Score: B-

Explanation:
Jeremy Cross and Associates Ltd demonstrates a stable but modest financial position typical of a micro-entity consultancy firm. The company maintains positive net current assets and shareholders’ funds, indicating it is solvent and able to meet short-term liabilities. However, the very thin working capital margin and minimal fixed assets suggest limited financial buffer and low capital investment, which could expose the business to liquidity risks under adverse conditions. The company's financial structure is currently stable but fragile.

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2. Key Vital Signs

Metric	Latest Value (31/03/2024)	Interpretation
Fixed Assets	£375	Very low investment in long-term assets, typical for service businesses.
Current Assets	£14,075	Includes cash and receivables; adequate but reduced from prior year.
Current Liabilities	£13,904	Almost equal to current assets; tight short-term liquidity.
Net Current Assets (Working Capital)	£171	Positive but very narrow margin; limited cushion for unexpected expenses.
Total Assets Less Current Liabilities	£546	Positive overall net assets indicating solvency.
Shareholders’ Funds	£546	Reflects retained earnings and capital; shows growth from £252 last year.
Director’s Loan Account	£12,651 (owed to director)	Indicates reliance on director financing; this is a vital lifeline.
Average Employees	1	Very small scale operation, low overheads.

Interpretation of Vital Signs:
The company is financially solvent ("alive and breathing") with positive net assets and working capital. However, the very slim working capital and a high director loan balance suggest "symptoms of financial fragility" — the firm depends substantially on the director’s financial support to maintain operations. The reduction in current assets and liabilities compared to the previous year indicates some contraction or tighter cash management.

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3. Diagnosis: Overall Financial Condition

• Solvency: The company is solvent with positive net assets, a good "heart rate" showing it can cover its liabilities.
• Liquidity: The "pulse" of working capital is weak; current assets only slightly exceed current liabilities, posing a risk if receivables are delayed or unexpected costs arise.
• Capital Structure: Minimal fixed assets and a heavy reliance on director advances indicate limited external capital and investment.
• Scale and Operations: The business is a micro-entity with only one employee (the director) and operates in management consultancy, a sector typically requiring minimal fixed assets.
• Financial Resilience: The company’s financial "immune system" is weak — it depends on continual director funding to maintain liquidity and operations.
• Growth and Profitability: Shareholders funds have doubled from £252 to £546 over two years, showing some retained earnings or capital injections, but absolute values are low, suggesting limited growth.

Overall, the company is financially "stable but vulnerable," typical for a small consultancy start-up relying on owner funding and limited resources.

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4. Recommendations: Steps to Improve Financial Wellness

1. Enhance Working Capital Buffer:
   Aim to increase current assets or reduce current liabilities to widen the working capital gap. This could involve accelerating client payments, negotiating longer payment terms with suppliers, or managing expenses tightly.

2. Reduce Reliance on Director Loans:
   While director financing is supportive, it poses a risk if the director’s ability to advance funds changes. Seek to build operational cash flow or consider external financing options like small business loans or grants suited for micro-entities.

3. Build Cash Reserves:
   Establish a modest cash reserve to manage unforeseen expenses and smooth cash flow variability, reducing the risk of liquidity crises.

4. Invest Prudently in Growth:
   Explore opportunities for incremental investment in tools or marketing to increase client base and revenue, which will improve financial strength and reduce dependency on director advances.

5. Regular Financial Monitoring:
   Implement monthly or quarterly cash flow forecasting and financial health checks to detect early signs of distress and respond proactively.

6. Consider Professional Advice:
   Engage with financial advisors or accountants to optimize tax planning, cash flow management, and explore funding opportunities.

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Medical Analogy Summary

Jeremy Cross and Associates Ltd’s financial health is akin to a patient with a steady but weak heartbeat—solvent and functioning but with limited reserves and a dependency on the "lifeline" provided by the director’s loans. Without strengthening this lifeline and improving liquidity, the company risks financial distress if unexpected pressures arise. With careful monitoring and strategic steps, the business can improve its financial "immune system" and build resilience for future growth.

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