JM DESIGN AND CONSTRUCTION LTD

Executive Summary

JM Design and Construction Ltd has a weak financial position with negative net assets and a working capital deficit, indicating poor liquidity and limited ability to meet short-term obligations. Given its brief trading history and current insolvency indicators, credit extension is not advisable at this stage without substantial financial support or evidence of turnaround. Close monitoring of liquidity metrics and capital structure is essential going forward.

JM DESIGN AND CONSTRUCTION LTD - Analysis Report

Company Number: 14601080

Analysis Date: 2025-07-29 12:34 UTC

1. Credit Opinion: DECLINE
   JM Design and Construction Ltd shows a negative net asset position of £(20,620) as of 30 June 2024, indicating that current liabilities (£50,431) exceed current assets (£29,811). This suggests an immediate liquidity concern and a working capital deficit, which undermines the company’s ability to meet short-term obligations. The company is very young, incorporated in 2023, and has limited financial history. The negative equity position and insufficient current assets raise concerns about its capacity to service debt or absorb financial shocks. Without evidence of external funding or improved cash flow, extending credit would carry a high risk.

2. Financial Strength:
   The balance sheet reflects weak financial health. The company’s net current liabilities of £20,620 and overall negative net assets indicate insolvency on a balance sheet basis. Shareholders’ funds are negative, highlighting accumulated losses or insufficient capital injection. The company is classified as micro-entity with only 3 employees, and no fixed assets reported, suggesting minimal operational scale or capital investment. This fragile financial base limits resilience and access to further funding without additional equity support.

3. Cash Flow Assessment:
   Current assets consist primarily of cash or receivables totaling £29,811, which is insufficient to cover current liabilities of £50,431. The working capital deficit is a critical liquidity red flag. There is no detailed cash flow statement available, but given the negative net assets, the company likely faces cash flow pressure. The absence of reserves or retained earnings further restricts its ability to manage short-term liquidity demands or unplanned expenses.

4. Monitoring Points:

• Track improvements in working capital and movement towards positive net current assets.
• Monitor timely filing of future accounts and confirmation statements to assess operational continuity.
• Observe any capital injections or shareholder loans that might improve equity and liquidity.
• Keep watch on director changes and governance as new appointments could signal strategic shifts.
• Review any trading or payment performance data if available to assess operational cash flow improvements.