Company Number: 14525225

Analysis Date: 2025-07-20 14:09 UTC

1. Credit Opinion: DECLINE
   JJ Group (Midlands) Ltd shows significant financial weakness with net liabilities of £32,517 as at 31 December 2023 in its first full financial year. The company has a negative working capital position of £33,874 and a shareholders' deficit, indicating it is currently insolvent on a balance sheet basis. The presence of bank loans (£43,920) and other creditors falling due within and beyond one year totaling £132,048 raises concerns about its ability to meet short and long-term obligations. Given the company’s recent incorporation in December 2022 and ongoing losses reflected in accumulated deficits, there is insufficient evidence of profitability or positive cash flow generation to support debt servicing. Without additional capital injection or turnaround plan, credit exposure presents high risk.

2. Financial Strength:
   The balance sheet shows total fixed assets of £44,927 and current assets of £54,704 mostly comprised of trade debtors. However, current liabilities at £88,578 exceed current assets, causing negative net current assets of £33,874. The company also reports long-term creditors of £43,570, resulting in overall net liabilities of £32,517 and a negative shareholders’ funds position. The build-up of losses and negative equity reflects weak financial strength and limited buffer for economic shocks. The company’s asset base is modest and heavily leveraged.

3. Cash Flow Assessment:
   The negative working capital position and accumulated losses suggest constrained liquidity. Trade debtors of £53,388 may provide some short-term cash inflow, but outstanding bank loans and creditor balances indicate pressure on cash resources. The company employs only 3 staff, which limits fixed overheads, but no cash flow statement is provided to confirm operational cash generation. The absence of positive net assets and negative equity signals potential cash flow risk in meeting liabilities as they fall due.

4. Monitoring Points:

• Track improvements in net current assets and reduction of creditor balances.
• Monitor profitability trends and cash flow generation in subsequent accounting periods.
• Watch for any capital injections or debt restructuring efforts.
• Review director’s reports and any operational changes impacting revenue and cost control.
• Assess compliance with filing deadlines and absence of any director disqualifications or legal actions.