JIGSAW HOME IMPROVEMENTS LTD

Executive Summary

JIGSAW HOME IMPROVEMENTS LTD maintains a strong equity base but faces liquidity challenges indicated by negative working capital. Addressing cash flow management and reducing current liabilities are essential to improve financial health and ensure stable operations.

JIGSAW HOME IMPROVEMENTS LTD - Analysis Report

Company Number: 13119004

Analysis Date: 2025-07-20 14:19 UTC

Financial Health Assessment Report for JIGSAW HOME IMPROVEMENTS LTD

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1. Financial Health Score: B

Explanation:
JIGSAW HOME IMPROVEMENTS LTD demonstrates a generally stable financial position with a solid equity base and consistent asset levels. The company shows healthy net assets growth and positive shareholder funds over recent years, indicating financial resilience. However, the working capital position requires attention due to current liabilities exceeding current assets, signaling a symptom of liquidity tension. Overall, the business is financially sound but should address liquidity management to improve its financial wellness.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	53,900	Stable investment in long-term assets, reflecting a solid operational base in construction equipment or property.
Current Assets	12,192	Increase from prior year; positive sign for short-term liquidity improvement.
Current Liabilities	30,161	High relative to current assets, indicating potential pressure to meet short-term obligations.
Net Current Assets (Working Capital)	-17,969	Negative working capital ("symptom of liquidity distress"); could impact ability to cover immediate debts.
Total Assets Less Current Liabilities	35,931	Represents net assets after deducting short-term liabilities; improved from prior year.
Net Assets / Shareholders’ Funds	35,931	Positive and growing equity base; reflects retained earnings and capital invested.
Number of Employees	3	Small workforce consistent with micro-entity status; manageable overheads.

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3. Diagnosis

• Balance Sheet Strength:
  The company maintains a strong equity position with net assets increasing from £25,931 in 2023 to £35,931 in 2024. This indicates profitable operations or capital injections that have strengthened the business's financial foundation.

• Liquidity Concerns:
  The current assets (£12,192) are significantly lower than current liabilities (£30,161), resulting in a negative working capital of £-17,969. This is a key symptom of financial stress that could lead to difficulties in paying short-term creditors or suppliers on time. Such liquidity strain might be due to delayed receivables or high short-term debt levels.

• Asset Management:
  Fixed assets remain constant at £53,900, showing no recent capital expenditures or disposals. This stability suggests the company is maintaining its asset base without expansion, which is typical for a micro-entity in the construction sector.

• Operational Insights:
  A small employee base (3) indicates a lean operation, reducing overhead but also possibly limiting capacity for growth. The company is categorized under construction of domestic buildings, a sector that can be cyclical and sensitive to market conditions.

• Governance and Control:
  Miss Sharon Sandra Day holds full control over the company (75-100% shares and voting rights) and is the sole director, implying centralized decision-making. This can be efficient but also concentrates risk.

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4. Recommendations

• Improve Liquidity Position:
  The company should prioritise improving its working capital position to alleviate liquidity strain. This could involve:

  • Accelerating collection of receivables
  • Negotiating extended payment terms with suppliers
  • Reviewing short-term borrowing to reduce current liabilities
  • Implementing tighter cash flow forecasting and management

• Enhance Cash Flow Monitoring:
  Regular cash flow analysis ("checking vital signs") will help identify cash shortages early and avoid financial distress symptoms like missed payments or overdrafts.

• Consider Capital Injection or Financing:
  If liquidity issues persist, injecting additional equity or securing longer-term financing may stabilize the balance sheet and provide a buffer against short-term shocks.

• Operational Efficiency:
  Given the small workforce, investing in staff training or technology could increase productivity and support growth without significantly increasing costs.

• Risk Management:
  Diversify client base and projects to reduce dependence on single contracts, smoothing revenue volatility inherent in construction.

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Executive Summary

JIGSAW HOME IMPROVEMENTS LTD exhibits a solid equity foundation and consistent asset base, reflecting a generally healthy financial condition. However, the company shows symptoms of liquidity distress due to negative working capital, which warrants immediate attention to improve cash flow and short-term financial stability. With targeted actions to strengthen liquidity and operational efficiency, the company can enhance its financial resilience and support sustainable growth.