JMH CONSULTING LTD

Executive Summary

JMH Consulting Ltd exhibits early-stage financial characteristics with modest asset base and negative working capital, indicating liquidity challenges. The company remains solvent but needs to improve cash flow management and build reserves to strengthen financial stability and support growth.

JMH CONSULTING LTD - Analysis Report

Company Number: 14705379

Analysis Date: 2025-07-20 12:15 UTC

Financial Health Assessment of JMH CONSULTING LTD (Year Ending 31 March 2024)

---

1. Financial Health Score: C

Explanation:
JMH Consulting Ltd is a very young private limited company with only one financial year of data. It shows modest asset base and very limited equity, with slightly negative working capital. The financials indicate startup phase challenges, not unusual for a company in its first year, but also highlight some early symptoms of financial strain that require attention. Overall, the company is stable but fragile, warranting a "C" grade reflecting moderate health with room for improvement.

---

2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	2,595	Small asset base mainly in tangible assets (e.g., equipment). Indicates investment in essential tools.
Current Assets	8,050	Includes debtors (£7,230) and cash (£820). Low cash reserves may limit short-term flexibility.
Current Liabilities	9,329	Slightly higher than current assets, leading to negative working capital (-£1,279).
Net Current Assets	-1,279	Negative working capital signals liquidity risk—company may struggle to meet short-term obligations.
Total Assets Less Current Liabilities	1,316	Small positive value shows that after settling short-term debts, the company still has some net asset value.
Net Assets / Shareholders’ Funds	1,316	Very low equity base, reflecting initial capital and retained earnings.
Number of Employees	1	Sole director, indicating a micro-enterprise scale.

Interpretation of Vital Signs:

• The negative net current assets ("working capital deficit") is a symptom of liquidity stress, akin to a patient having low blood pressure—potentially manageable but risky if prolonged.
• Cash reserves are minimal relative to liabilities, which could hamper the ability to cover immediate expenses.
• The company’s fixed assets and net assets are positive but very small, showing it is in the early stage of growth.
• The single director is the sole person with significant control, indicating centralized decision-making but also concentration risk.

---

3. Diagnosis

JMH Consulting Ltd is in the startup phase, which naturally comes with financial strain due to initial investments and working capital demands. The negative working capital is a key symptom of liquidity tension, likely caused by the timing mismatch between receivables (debtors) and payables (creditors). The company has minimal cash on hand, which is an early warning sign similar to a patient with low energy reserves.

The company's balance sheet shows that it has managed to accumulate a small positive net asset position, which is a good sign of initial capital injections and some profitability or prudent management during the first year.

However, the lack of audit and abridged accounts means that detailed profitability and cash flow insights are not available. The company does not appear to have significant financial distress but is vulnerable to cash flow disruptions.

---

4. Prognosis

If the company can improve its cash flow management by accelerating debtor collections or extending creditor terms, it can alleviate its working capital deficit and build a healthier liquidity buffer. Continued careful control of expenses and growth in revenues will be critical to transition from fragile startup to a more resilient enterprise.

The prognosis is cautiously optimistic but depends heavily on maintaining steady business development and improving cash reserves. Without intervention, liquidity risks could worsen, potentially leading to financial strain.

---

5. Recommendations

• Improve Cash Flow Management:
  Prioritize faster collection of receivables and negotiate longer payment terms with suppliers to reduce liquidity pressure.

• Build Cash Reserves:
  Increase cash holdings to provide a "financial cushion" to smooth out short-term obligations—like building up energy reserves for recovery.

• Monitor Working Capital Regularly:
  Keep a close eye on current assets vs current liabilities to spot early signs of liquidity distress.

• Plan for Growth Capital:
  Consider raising additional equity or short-term financing to strengthen the balance sheet and support expansion.

• Maintain Compliance and Transparency:
  Ensure timely filing of accounts and consider moving beyond abridged accounts as the company grows for better insight and lender confidence.

• Risk Management:
  As the sole director and controlling shareholder, ensure robust governance and consider appointing advisors or additional directors for oversight.

---

Executive Summary

JMH Consulting Ltd is a newly established micro enterprise showing typical startup financial signs, including modest assets and a slight working capital deficit. While the company is solvent with positive net assets, its low cash reserves and negative working capital indicate early liquidity risks. Focused cash flow management and building financial buffers will be critical to sustaining growth and improving financial health.