JJ2 IMAGE LIMITED

Executive Summary

JJ2 IMAGE LIMITED demonstrates a solid financial position with strong liquidity and positive working capital, reflecting good short-term financial health. While cash reserves have decreased slightly, the company maintains a low level of liabilities and a growing equity base, indicating stability. Continued monitoring of cash flow and strategic planning for growth will support ongoing financial wellness.

JJ2 IMAGE LIMITED - Analysis Report

Company Number: 13308178

Analysis Date: 2025-07-20 19:08 UTC

Financial Health Assessment for JJ2 IMAGE LIMITED as of 30 April 2024

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Financial Health Score: B

Explanation:
JJ2 IMAGE LIMITED displays a generally healthy financial condition with strong liquidity and positive net current assets, indicating good short-term financial stability. The company maintains a solid equity base relative to its current liabilities. Slight caution is warranted due to a reduction in cash balances and a history of fluctuating current liabilities, but overall, the company is financially sound and well-positioned.

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Key Vital Signs:

Metric	2024 Value (£)	Interpretation
Current Assets	42,835	Healthy buffer of liquid assets to cover short-term needs
Cash at Bank	29,767	Adequate cash reserves but decreased from previous year
Debtors	13,068	Stable receivables indicating consistent customer payments
Current Liabilities	2,690	Very low short-term obligations, reducing financial stress
Net Current Assets (Working Capital)	40,145	Strong positive working capital, showing good liquidity
Shareholders’ Funds (Equity)	40,145	Equity base has grown since inception, reflecting retained profits
Employee Count	1	Very small operation, low fixed costs

Interpretation:

• The company has a healthy cash flow "pulse", with cash covering current liabilities by over 11 times in 2024, indicating excellent liquidity.
• The decrease in cash (from £40,530 in 2023 to £29,767 in 2024) signals some cash outflow or investment, which should be monitored to ensure it does not develop into a symptom of cash strain.
• Current liabilities have dropped significantly from £12,049 in 2023 to £2,690 in 2024, suggesting improved management of short-term debts and payables.
• Stable debtors imply consistent revenue collection with no signs of bad debts or collection issues.
• The company’s net assets and equity have increased since 2021, reflecting retained earnings and a stable financial foundation.

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Diagnosis:

JJ2 IMAGE LIMITED exhibits the financial health of a small but stable enterprise. The company's liquidity ratios are strong, showing no immediate signs of distress or insolvency risk. Positive working capital indicates the business can meet its short-term obligations comfortably, a key sign of operational "vitality."

The business is in its early years (incorporated 2021) and remains a micro to small-sized entity with minimal employees and modest capital. The presence of only one director and a small workforce suggests low operational complexity, which can be both a strength (low overhead) and a risk (dependence on a single individual).

The drop in cash reserves year-on-year should be investigated to ensure it reflects planned investment or business growth rather than operational inefficiencies or unexpected expenses. The very low current liabilities in 2024 indicate the company is managing its payables well, reducing the risk of liquidity issues.

No audit was required under the small companies regime, which is typical but means financial controls and reporting rigor may be limited. However, there are no overdue filings or compliance issues, indicating good governance.

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Recommendations:

1. Monitor Cash Flow Carefully:
   Ensure that the reduction in cash balance is part of a strategic plan (e.g., investment, asset purchase) and not a symptom of increasing operational costs or delayed customer payments.

2. Maintain Strong Working Capital Management:
   Continue to keep current liabilities low relative to current assets to avoid liquidity crunches. Negotiate favorable payment terms with suppliers if possible.

3. Strengthen Financial Reporting and Controls:
   Even though audit exemption applies, consider voluntary internal reviews or periodic external financial advice to detect any emerging financial risks early.

4. Consider Business Diversification or Growth Strategies:
   With only one employee and one director, the company may be vulnerable to key person risk. Planning for growth or additional staff could improve operational resilience.

5. Regularly Review Debtors and Credit Control:
   Maintain the current strong position on debtors by ensuring timely invoicing and follow-up on payments to avoid cash flow issues.

6. Plan for Long-Term Capital Needs:
   The company should assess if its current equity and reserves are sufficient to fund medium-term expansion or capital expenditure.

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