JN DESIGN AND BUILD LTD

Executive Summary

JN DESIGN AND BUILD LTD currently faces financial challenges characterised by negative working capital and net liabilities, indicating liquidity strain and reliance on director loans. While the company remains operational, urgent actions to improve cash flow, strengthen capital, and control costs are essential for sustainable financial health. With focused management and strategic support, the company can work towards restoring financial stability and growth.

JN DESIGN AND BUILD LTD - Analysis Report

Company Number: 13031641

Analysis Date: 2025-07-20 16:18 UTC

Financial Health Assessment of JN DESIGN AND BUILD LTD

---

1. Financial Health Score: D

Explanation:
JN DESIGN AND BUILD LTD shows signs of financial strain with persistent negative net current assets (working capital) and net liabilities over the last three years, indicating a weak liquidity position and a reliance on external borrowing, notably director loans. While the company remains active, these "symptoms of distress," such as negative working capital and shareholder funds, suggest underlying financial challenges that require urgent management attention.

---

2. Key Vital Signs

Metric	2023 Value	Interpretation
Current Assets	£30,049	Includes cash (£12,469) and debtors (£17,580). Reasonable asset base but heavily offset by liabilities.
Current Liabilities	£32,140	Higher than current assets, indicating liquidity strain; can’t cover short-term debts fully.
Net Current Assets (Working Capital)	-£2,091	Negative working capital signals potential cash flow difficulties to meet short-term obligations.
Net Assets (Total Equity)	-£2,091	Negative net worth indicating liabilities exceed assets; a sign of financial weakness.
Shareholders’ Funds	-£2,191	Equity is negative, reflecting accumulated losses or undercapitalisation.
Director Loans	£27,831	Significant reliance on director funding to support operations, which may be unsustainable long-term.
Cash Position	£12,469	Increasing cash but still modest; may not be sufficient given liabilities.
Debtors	£17,580	Large debtor balance compared to prior year, may impact cash flow if not collected timely.
Employee Count	1	Very small operation, likely owner-managed, limiting scalability and resources.

---

3. Diagnosis: What the Financial Data Reveals About Business Health

JN DESIGN AND BUILD LTD operates in the building completion and development sector, with a small-scale business footprint. The company's negative working capital and net liabilities over the past three years are "warning signs" akin to a patient showing chronic symptoms of financial distress. The rising current liabilities (from £13,861 in 2022 to £32,140 in 2023) outpace asset growth, especially since much liabilities are director loans, indicating the business depends heavily on internal financing rather than external credit or profits.

The negative net assets and shareholder funds reflect cumulative losses or insufficient capital injections since incorporation in 2020. This "weak immune system" in financial terms suggests limited buffer to absorb shocks or downturns.

However, a positive note is the improvement in cash position from £9,857 in 2022 to £12,469 in 2023 and an increase in debtors, possibly reflecting growing sales on credit. Yet, high debtors and liabilities can strain cash flow if collections are delayed.

The sole director’s continued investment indicates commitment but also underlines the risk of over-reliance on one individual’s resources.

---

4. Recommendations: Specific Actions to Improve Financial Wellness

• Improve Cash Flow Management:
  Prioritise collection of outstanding debtors and negotiate longer payment terms with creditors to ease liquidity pressures. Consider implementing tighter credit control policies.

• Capital Injection or External Funding:
  Explore options to strengthen equity through additional capital injection or seek external funding (e.g., bank loans or investors) to reduce reliance on director loans, which may not be sustainable.

• Cost Control and Profitability Focus:
  Review operational efficiency to reduce costs and improve profit margins. Given the small scale, focus on high-margin projects to build retained earnings.

• Regular Financial Monitoring:
  Establish monthly cash flow forecasting and financial reviews to detect early signs of distress and manage working capital proactively.

• Strategic Planning:
  Consider business model adjustments or diversification to enhance revenue streams, improve resilience, and build a more robust financial foundation.

• Professional Advice:
  Engage with financial advisors or accountants to develop restructuring plans and optimize tax and financing structures.

---