Company Number: 13888115

Analysis Date: 2025-07-20 13:51 UTC

Financial Health Assessment of JJR Stokes Limited (Year Ended 31 March 2024)

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1. Financial Health Score: B

Explanation:
JJR Stokes Limited demonstrates a generally healthy financial position with strong liquidity, positive net assets, and growth in shareholders’ funds over the year. However, the company carries moderate secured debt (hire purchase contracts) and relatively high current liabilities, particularly tax and social security liabilities, which warrant cautious monitoring. The absence of an income statement limits profitability insights but balance sheet metrics suggest stable operations with good cash reserves.

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2. Key Vital Signs

Metric	31 March 2024	Interpretation
Current Assets	£277,675	Healthy: Significant increase, largely driven by cash.
Cash at Bank	£253,762	Very healthy: Strong liquidity to cover short-term needs.
Current Liabilities	£170,872	Elevated: Includes substantial tax/social security owed.
Net Current Assets (Working Capital)	£106,803	Healthy: Positive working capital indicates short-term stability.
Total Assets Less Current Liabilities	£203,172	Solid: Indicates asset base after covering current debts.
Net Assets (Shareholders’ Funds)	£139,028	Positive: Increased from previous year, reflecting retained earnings growth.
Fixed Assets (Tangible)	£96,369	Reasonable investment in plant/machinery for the business.
Hire Purchase Debt (Secured)	£45,276	Moderate leverage: Debt secured against assets, manageable but requires monitoring.
Employees	11	Small workforce appropriate for a licensed restaurant.

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3. Diagnosis: Financial "Symptoms" and Business Health

• Liquidity Vital Signs:
  The company’s cash balance has surged from £71k to £254k in one year, suggesting healthy cash flow and operational cash management. High liquidity is a sign of a “healthy heartbeat” in financial terms, ensuring the company can meet immediate obligations comfortably.

• Working Capital:
  Positive and improved net current assets (£106k) indicate that short-term assets exceed liabilities, a sign of good working capital management and no immediate “circulatory” distress.

• Leverage and Debt:
  The company has hire purchase agreements totaling £45k, secured against fixed assets. This is a moderate level of debt for a business with £96k in tangible assets, implying a cautious but reasonable use of leverage to finance equipment. The “respiratory” function of the business (assets to support operations) is well maintained.

• Tax and Social Security Liabilities:
  A notable jump in taxation and social security creditors from about £16k to £88k suggests either timing of payments or increased tax obligations—this could be a “symptom” of stress if not managed properly, as it affects cash flow and creditor relations.

• Profitability:
  The absence of an income statement (not filed due to small company exemption) limits profitability insight. However, retained earnings have increased substantially from £36,812 to £138,929, indicating accumulated profits or capital injections, a positive “immune response” showing business growth.

• Asset Management:
  Fixed assets grew slightly, with some disposals and new additions, showing active management and reinvestment in operational capacity.

• Company Size and Sector:
  As a licensed restaurant with 11 employees, the company fits within the micro to small enterprise category, with financials consistent with a growing hospitality business.

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4. Recommendations: Prescriptions for Financial Wellness

• Monitor Tax and Social Security Payables:
  The elevated tax liabilities should be closely monitored and planned for payment to avoid penalties or cash flow strain. Consider working with a tax advisor to ensure efficient tax management and timely payments.

• Maintain Cash Flow Discipline:
  Continue to nurture the strong cash position, ensuring the business keeps a buffer for seasonal fluctuations common in the hospitality sector.

• Debt Management:
  While hire purchase debt is manageable, ensure regular review of repayment schedules to avoid over-leveraging. Explore opportunities to refinance or reduce debt cost where possible.

• Profit and Loss Transparency:
  Although exempt from filing, internally track profitability and margins rigorously. This will help detect early symptoms of distress not visible from balance sheet alone.

• Growth and Investment Planning:
  With positive net assets and increasing retained earnings, consider strategic reinvestment into marketing or service improvements to sustain growth.

• Contingency Planning:
  Build a financial contingency plan considering potential market volatility, especially given the hospitality industry’s sensitivity to economic cycles.

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Summary in Medical Terms:

JJR Stokes Limited shows a “healthy heartbeat” with strong liquidity and positive working capital, indicating good short-term financial health. The increased retained earnings reflect a strong “immune system” response with profitability building over time. However, the elevated tax liabilities warn of a possible “infection” that needs treating promptly to prevent cash flow distress. Overall, the company’s financial “vitals” suggest a stable condition with a favorable prognosis if current financial discipline continues.

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