JJSP LTD

Executive Summary

JJSP LTD possesses a strong investment property asset base but displays critical liquidity issues characterized by negative working capital and high current liabilities. The company relies heavily on director loans to maintain operations, indicating financial vulnerability. Addressing liquidity shortfalls and reducing dependency on director funding are essential to strengthen its financial health and ensure sustainable future operations.

JJSP LTD - Analysis Report

Company Number: 13118515

Analysis Date: 2025-07-19 12:53 UTC

Financial Health Assessment of JJSP LTD

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1. Financial Health Score: C

Explanation:
JJSP LTD shows a stable asset base primarily composed of investment property, but its liquidity position reveals symptoms of financial strain. The company maintains positive net assets, albeit at a low level relative to current liabilities, and relies heavily on director funding. This places it in a moderate health category—stable but vulnerable without improvement in working capital and liquidity.

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2. Key Vital Signs

Metric	Latest (FY 2024)	Interpretation
Fixed Assets (Investment Property)	£145,679	Healthy asset base, stable valuation, representing long-term investment strength.
Current Assets	£8,739	Very low liquidity relative to liabilities; mostly cash and minimal debtors.
Current Liabilities	£145,715	Very high short-term obligations; nearly matching fixed assets value.
Net Current Assets (Working Capital)	-£136,976	Negative working capital indicates a liquidity crunch and potential cash flow difficulties.
Total Assets less Current Liabilities (Net Assets)	£8,703	Positive but marginal net assets suggest limited cushion against financial shocks.
Shareholders’ Funds (Equity)	£8,703	Low equity base, but positive and improving from previous years.
Director Loans (Related Party Creditors)	£143,317	Heavy reliance on director funding to meet liabilities; a sign of external financial support needed.

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3. Diagnosis

JJSP LTD is a company with solid long-term assets, primarily investment property held at fair value. This "healthy fixed asset" position is akin to a patient with strong bones but weak blood flow. The company suffers from a liquidity symptom of distress—negative working capital and current liabilities nearly equal to the fixed asset value. This means the company does not have enough short-term assets (cash or receivables) to cover its immediate debts, risking potential cash flow problems.

Notably, the director has provided substantial loans to the company, which acts like an external life support system. While this support keeps the company afloat, it also represents a dependency that could become critical if the director cannot continue funding.

The company reports no audit requirement and prepares accounts under the small companies regime, which suggests a relatively small operational scale. The going concern statement relies on director support, which is a risk factor.

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4. Recommendations

• Improve Liquidity Management:
  Increase short-term liquid assets by accelerating debtor collections, reducing stock (if applicable), or negotiating longer payment terms with creditors to reduce immediate cash outflows.

• Reduce Reliance on Director Loans:
  Explore refinancing options or external funding sources to reduce dependency on director loans, which pose a risk to financial independence.

• Enhance Working Capital:
  Develop a cash flow forecast and implement tighter controls on payables and receivables to move net current assets into positive territory.

• Regular Asset Valuation:
  Continue to monitor investment property fair value to ensure asset base remains robust; consider potential for asset sales if necessary to improve liquidity.

• Strategic Growth or Cost Control:
  Either seek ways to grow revenue streams to build retained earnings or control operating costs to improve profitability and equity position.

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