J-MAC & CO RENEWABLES LIMITED

Executive Summary

J-Mac & Co Renewables Limited is currently in a moderate financial health state with positive equity but signs of liquidity stress and high lease obligations. The company should prioritize working capital management and debt restructuring to improve cash flow and reduce financial strain. With proactive financial discipline, the outlook can stabilize and support sustainable growth.

J-MAC & CO RENEWABLES LIMITED - Analysis Report

Company Number: 13951662

Analysis Date: 2025-07-20 15:09 UTC

Financial Health Assessment for J-MAC & CO RENEWABLES LIMITED
(As at 31 March 2024)

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1. Financial Health Score: C

Explanation:
The company shows a moderate financial condition with some signs of strain in liquidity and gearing. While it maintains positive net assets and shareholders’ funds, the negative net current assets and significant finance lease obligations indicate ongoing cash flow and leverage pressures. This score reflects a "watchful" status—neither severely distressed nor robustly healthy, requiring attention to improve working capital and debt management.

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2. Key Vital Signs

Metric	Value (2024)	Interpretation
Net Assets (Equity)	£8,216	Positive but small equity base; company has a cushion but limited.
Net Current Assets (Working Capital)	-£6,762	Negative working capital indicates liquidity "symptoms"—potential difficulty meeting short-term obligations promptly.
Cash on Hand	£8,985	Cash balance is relatively low, signaling cautious cash flow health.
Debtors (Accounts Receivable)	£36,986	Large debtor balance compared to cash suggests slower cash conversion cycle, possible collection delays.
Current Liabilities	£55,133	High short-term liabilities relative to current assets; risk of liquidity pinch.
Long-Term Debt (Finance Leases)	£45,390	Substantial long-term lease obligations indicate gearing and fixed financial commitments.
Profit and Loss Reserves	£8,116	Retained earnings are positive but have declined slightly from previous year—indicates modest profitability.
Fixed Assets	£77,925	Investment in tangible/intangible assets supports operational capacity but may limit liquidity.

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3. Diagnosis

J-Mac & Co Renewables Limited is a relatively young and small private company operating in the electrical installation sector. The financial "vital signs" suggest a business with ongoing operational activity and asset investment, but experiencing liquidity strain as evidenced by negative net current assets and an elevated level of current liabilities.

The company relies heavily on finance leases to fund its fixed assets, which is reflected in the significant long-term lease obligations. This creates a fixed financial burden that can stress cash flows, especially if debtor collections are slow or if turnover fluctuates.

The cash position, though modest, is positive, which is a good sign, but the high debtor balance compared to cash hints at potential cash flow delays. The slight decrease in net assets and retained earnings from the prior year may indicate the company is navigating early-stage growth pains or investment phases rather than generating strong profits.

Overall, the company exhibits symptoms of financial strain related to liquidity and leverage, but no immediate critical distress. The business appears stable but vulnerable to short-term cash flow shocks or increases in liabilities.

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4. Recommendations

• Improve Working Capital Management:
  Focus on accelerating debtor collections and possibly negotiating extended payment terms with suppliers to alleviate negative net current assets and improve liquidity.

• Cash Flow Monitoring and Forecasting:
  Implement rigorous cash flow forecasting to anticipate shortfalls and plan for lease and creditor payments, helping prevent liquidity crises.

• Lease and Debt Restructuring:
  Explore opportunities to refinance or restructure finance leases to reduce short-term obligations and improve cash flow flexibility.

• Profitability Enhancement:
  Review pricing, cost control, and operational efficiencies to strengthen profit margins and rebuild retained earnings.

• Build Cash Reserves:
  Aim to increase cash reserves as a buffer against unforeseen expenses and to support day-to-day operations without strain.

• Consider External Funding or Equity Injection:
  If growth plans require asset expansion, consider equity or less onerous financing to reduce reliance on expensive lease finance.

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