JJ PUBS LIMITED

Executive Summary

JJ PUBS LIMITED, a newly formed private limited company in the public house sector, shows a stable but cautious financial position with positive net assets but a working capital deficit. The company's liquidity is strained by low cash reserves and high receivables, indicating the need for stronger cash flow management. With focused actions on improving cash collections and inventory control, the company can strengthen its financial health and support sustainable growth.

JJ PUBS LIMITED - Analysis Report

Company Number: 14500861

Analysis Date: 2025-07-29 12:33 UTC

Financial Health Assessment Report for JJ PUBS LIMITED

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1. Financial Health Score: C

Explanation:
JJ PUBS LIMITED shows a modest financial position typical of a newly established small enterprise in the hospitality sector. The company has positive net assets but is experiencing a working capital deficit, which signals liquidity pressure. The financials demonstrate early-stage operational challenges but no immediate distress. The score "C" reflects a stable but cautious outlook—healthy enough to continue but needing attention to cash flow and short-term liabilities.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	6,727	Small investment in long-term assets, typical for a startup.
Current Assets	23,980	Includes stock (£5,000), debtors (£17,637), and cash (£1,343).
Cash on Hand	1,343	Low cash reserves; potential liquidity risk.
Current Liabilities	28,323	Short-term debts exceed current assets by £4,343 (working capital deficit).
Net Current Assets (Working Capital)	-4,343	Negative — risky sign indicating difficulty in covering short-term obligations.
Net Assets (Equity)	2,384	Positive net worth; company has some cushion for losses.
Share Capital	100	Minimal equity base, typical of start-up entities.
Debtors (Receivables)	17,637	High relative to cash, indicating delayed customer payments or credit sales.
Stock	5,000	Inventory held; turnover speed unknown but must be managed carefully.

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3. Diagnosis: What the Financial Data Reveals

• Liquidity Concern ("Symptoms of Distress"): The company’s working capital is in negative territory (-£4,343), meaning current liabilities exceed current assets. This is a critical "symptom" indicating that the company may face challenges in meeting short-term obligations without additional cash inflows. The low cash holding (£1,343) compounds this concern.

• Early Stage Growth Profile: As a company incorporated in late 2022 and reporting for its first financial year, JJ PUBS LIMITED is still establishing its operational footing. The modest fixed assets and minimal equity reflect a typical start-up profile in the public house industry.

• Receivables Concentration: Debtors represent a large portion of current assets, suggesting the company has extended credit to customers or awaits payments. This "patient" (business) relies heavily on collecting these receivables timely to maintain a healthy cash flow.

• Profitability Not Directly Reported: The accounts do not include a Profit and Loss statement for this period (exemption taken), so profitability cannot be directly assessed. However, the retained earnings (profit and loss account) of £2,284 indicate some net positive results, albeit small.

• Risk of Cash Flow Strain: The low cash balance relative to liabilities, combined with the working capital deficit, signals a risk of cash flow strain if receivables are delayed or if stock ties up funds without corresponding sales.

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4. Recommendations to Improve Financial Wellness

• Improve Cash Flow Management: Prioritize accelerating the collection of receivables to convert debtors into cash more quickly. Consider offering early payment discounts or tightening credit terms to customers.

• Manage Inventory Levels: Monitor and optimize stock levels to avoid overstocking, which can tie up vital cash resources unnecessarily.

• Increase Cash Reserves: Aim to build cash buffers to better cover current liabilities. This may involve seeking short-term financing options or negotiating extended payment terms with suppliers.

• Regular Financial Monitoring: Implement monthly cash flow forecasts and working capital reviews to detect liquidity issues early and take corrective action.

• Explore Equity Injection: If feasible, consider increasing share capital or attracting investment to strengthen the equity base and provide additional working capital.

• Profit & Loss Transparency: Prepare and review full Profit and Loss accounts in future reporting to get clearer insights into operational profitability and cost control.

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Medical Analogy Summary

JJ PUBS LIMITED is like a young patient showing normal growth signs but currently experiencing "mild dehydration" (working capital deficit and low cash). The company needs to "rehydrate" by improving cash inflows and managing liabilities better to stabilize its financial "vital signs" and avoid more serious distress.

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