JMA AUTO LTD

Executive Summary

JMA AUTO LTD demonstrates solid financial health for a young, micro-sized automotive repair business, with positive working capital and growing equity reflecting operational progress. While liquidity is currently stable, the company should focus on improving its cash flow buffer and scaling cautiously to sustain and enhance financial wellness. Continued diligence in compliance and financial planning will support a strong future outlook.

JMA AUTO LTD - Analysis Report

Company Number: 14155971

Analysis Date: 2025-07-29 21:00 UTC

Financial Health Assessment: JMA AUTO LTD (As of 30 June 2024)

---

1. Financial Health Score: B

Explanation:
JMA AUTO LTD exhibits a generally healthy financial position for a micro-entity in its early years. The company shows positive net current assets and growing shareholders' funds, indicating improving liquidity and capital base. However, the scale of operations is small, and current liabilities are relatively close to current assets, which requires ongoing monitoring. The absence of an audit is typical for micro-entities but limits external assurance.

---

2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	24,438	Moderate investment in long-term assets, likely equipment for vehicle repair.
Current Assets	16,442	Cash, receivables, and stock are adequate but not abundant.
Current Liabilities	15,031	Short-term debts are significant but covered by current assets.
Net Current Assets	1,411	Positive working capital ("healthy cash flow buffer"), though narrow.
Total Assets Less Current Liabilities	25,849	Solid net asset base, showing equity growth since inception.
Shareholders' Funds	25,849	Equity financed, no indication of debt reliance beyond current liabilities.
Number of Employees	1	Very small operation, low fixed overheads.
Filing Status	On time	No overdue filings, indicating good compliance health.

---

3. Diagnosis

• Liquidity: The company has a small but positive net working capital (£1,411), meaning it can cover short-term obligations with current assets. This is a critical "vital sign" indicating no immediate liquidity distress.
• Capital Structure: Shareholders' funds increased from £16,020 in 2023 to £25,849 in 2024, signaling retained profits or additional capital injections. This is a positive "symptom" of financial growth.
• Asset Management: Fixed assets increased by approximately 48% over one year, suggesting reinvestment in operational capacity. This aligns with business growth in vehicle maintenance.
• Scale and Risk: As a micro-entity with only one employee, the company faces risks from limited human resources and operational scale but benefits from low fixed costs.
• Compliance: Timely filing of accounts and confirmation statements indicates good governance and reduces regulatory risk.
• Audit Status: Exemption from audit is standard for micro-entities but means financial information is unaudited, so internal controls and accuracy rely on management integrity.

---

4. Recommendations

• Improve Working Capital Cushion: Aim to increase current asset buffer beyond current liabilities to at least a 20-30% margin to guard against unexpected cash flow shocks.
• Monitor Payables and Receivables: Tighten credit control and negotiate favorable payment terms with suppliers to enhance liquidity.
• Plan for Growth: Consider gradual expansion of human resources to reduce dependency on a single employee and enable scaling.
• Maintain Compliance Discipline: Continue timely filing and consider voluntary audit or external review as the business grows to enhance stakeholder confidence.
• Financial Forecasting: Implement rolling cash flow forecasts to anticipate funding needs and avoid liquidity "symptoms of distress."
• Contingency Planning: Establish an emergency fund or access to short-term credit lines to manage unforeseen operational costs.

---