JNANA SKY LIMITED

Executive Summary

JNANA SKY LIMITED demonstrates excellent financial health with strong liquidity, rapidly growing assets, and sound working capital management. The company’s financial “vital signs” indicate a stable and healthy business, though continued vigilance over related party exposures and debtor management is advised to sustain this positive trajectory.

JNANA SKY LIMITED - Analysis Report

Company Number: 14194408

Analysis Date: 2025-07-29 16:03 UTC

Financial Health Assessment Report for JNANA SKY LIMITED

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1. Financial Health Score: A-

Explanation:
JNANA SKY LIMITED exhibits a strong and improving financial position with substantial growth in net current assets and shareholders' funds within just two years of operation. The liquidity position is robust, indicated by healthy cash reserves and positive working capital. The score A- reflects excellent financial health with minor caution regarding the company’s reliance on related party transactions, which should be monitored.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	1,004,689	230,983	Significant increase (4.3x), showing improved asset base and liquidity.
Cash at Bank	559,638	134,088	Strong increase in liquid cash, indicating a healthy cash flow and ability to cover short-term obligations.
Debtors	445,051	96,895	Increase consistent with business growth, though requires monitoring for collection efficiency.
Current Liabilities	276,627	46,879	Increase in liabilities, but well covered by assets; manageable short-term debts.
Net Current Assets (Working Capital)	728,062	184,104	Large positive working capital, indicating good short-term financial health and operational liquidity.
Total Assets Less Current Liabilities	729,773	185,990	Reflects overall asset backing after short-term debts; strong increase shows financial strengthening.
Shareholders' Funds (Equity)	729,773	185,990	Robust growth in equity, showing retained profits and/or capital injection strengthening the business.
Fixed Assets (Tangible)	1,711	1,886	Minimal and stable; suggests business is not capital-intensive, typical for IT consultancy.

Additional Observations:

• The company is a Private Limited Company classified as a small entity (turnover likely below £10.2M).
• The director owns 75-100% shares and controls the company, showing centralized control which can be positive or raise governance considerations.
• No audit required, financials are unaudited abridged accounts, common for small companies.
• The company invoices a related party (Velloni Limited and its branches) substantial amounts; this related party exposure should be reviewed for credit risk.

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3. Diagnosis: Financial Condition Analysis

JNANA SKY LIMITED presents with symptoms of strong financial health—a rapidly growing asset base, especially liquid assets, and a substantial increase in net current assets indicating healthy operational performance and cash flow. The company’s working capital is healthy, meaning it can comfortably meet its short-term liabilities without strain, akin to a patient with a strong pulse and stable blood pressure.

The increase in debtors is proportional to sales growth but requires ongoing monitoring to avoid cash flow “blockages.” The company’s fixed assets are minimal, consistent with an IT consultancy business model, emphasizing intellectual capital over physical capital.

The relationship with related parties (notably Velloni Limited and its Polish branch) accounts for a significant portion of turnover and debtors. This exposes the company to credit risk if those related parties fail to pay on time. However, the outstanding debtor balances at year-end are manageable relative to cash on hand, suggesting current liquidity is sufficient to absorb delays.

The company has no overdue filings and is compliant with statutory deadlines, indicating good governance and administrative discipline.

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4. Recommendations: Financial Wellness Actions

• Diversify Customer Base: Reduce dependency on related parties by growing external client revenues to mitigate credit concentration risk and improve business resilience.
• Tighten Credit Control: Implement or enhance debtor management practices to maintain healthy cash flow and minimize overdue receivables, especially from related parties.
• Maintain Cash Reserves: Continue prudent cash management to preserve liquidity “reserves,” ensuring the company can withstand unexpected drops in incoming payments.
• Monitor Liabilities Growth: Keep an eye on current liabilities’ growth to prevent any potential liquidity mismatch, even though current coverage is good.
• Governance Review: Consider formalizing governance practices given the 100% ownership and control by a single director, preparing for future growth or investment.
• Plan for Audit Thresholds: As the company grows, prepare for potential audit requirements to ensure transparency and credibility with stakeholders.

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