JNE HOME IMPROVEMENTS LTD

Executive Summary

JNE Home Improvements Ltd currently maintains a stable financial position with positive net assets and working capital, reflecting good liquidity and solvency for a micro-entity. However, the recent increase in current liabilities and slight decline in net assets are early warning signs that require careful cash flow management. By monitoring liabilities closely and maintaining disciplined financial controls, the company can sustain its healthy growth trajectory and financial wellness.

JNE HOME IMPROVEMENTS LTD - Analysis Report

Company Number: 13889644

Analysis Date: 2025-07-20 18:36 UTC

Financial Health Assessment: JNE HOME IMPROVEMENTS LTD

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1. Financial Health Score: B

Explanation:
JNE Home Improvements Ltd demonstrates a generally stable financial position with positive net assets and working capital, indicating a "healthy heart" in terms of liquidity and solvency. However, there is a slight decline in net assets and working capital compared to the previous year, which signals a mild symptom of financial strain that should be monitored closely. The company's micro-account status reflects its small scale, which limits the complexity of its financial structure but also demands careful cash flow management.

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2. Key Vital Signs

Metric	2025 Figure (£)	Interpretation
Fixed Assets	4,560	Modest investment in long-term assets, showing some stability and asset accumulation over time.
Current Assets	68,152	Healthy short-term assets, mainly cash or receivables, providing liquidity to meet immediate needs.
Current Liabilities	52,294	Current debts have nearly doubled since last year, raising caution about short-term obligations.
Net Current Assets (Working Capital)	15,858	Positive working capital indicates the company can cover short-term liabilities, but it has decreased from 21,339 in 2024, a mild warning sign.
Net Assets (Equity)	19,998	Positive net assets show the company’s book value is healthy, but a decline from £22,169 suggests some erosion of financial buffer.
Average Employees	2	Small workforce consistent with micro-entity status, manageable operational scale.

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3. Diagnosis

• Liquidity Status: The company exhibits "healthy cash flow" characteristics with sufficient current assets to cover current liabilities. However, the current liabilities have increased sharply (from £27,933 to £52,294), which is a symptom of increasing short-term obligations or possibly delayed payments from customers. This could stress liquidity if not managed carefully.

• Solvency: Positive net assets and shareholders' funds are reassuring signs that the company remains solvent and has a buffer against financial shocks. The slight decrease in net assets warrants attention but is not alarming at this stage.

• Asset Management: The increase in fixed assets from £1,200 to £4,560 indicates ongoing investment in equipment or property, which is a positive sign of business development.

• Growth and Scale: The company has grown from zero employees to two in the last year, showing operational expansion. However, being a micro entity, the financial structure is simple with limited complexity or risk exposure.

• Accounting and Compliance: Timely filing of accounts and returns reflects good corporate governance and compliance habits, reducing external risks related to penalties or legal issues.

• Directors and Control: Directors have relevant industry experience (builder and carpenter) and equal control, which suggests aligned management but also potential concentration risk.

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4. Recommendations

1. Monitor and Manage Current Liabilities:
   The sharp increase in current liabilities should be addressed by reviewing payment terms with suppliers and customers. Consider negotiating longer payment terms or accelerating receivables to ease cash flow pressure.

2. Cash Flow Forecasting:
   Implement detailed cash flow forecasting to anticipate periods of tight liquidity and ensure sufficient working capital to cover short-term obligations.

3. Maintain Asset Investment Discipline:
   Continue prudent investment in fixed assets to support business growth but avoid overextension that could impair liquidity.

4. Enhance Revenue Streams:
   Explore opportunities to increase turnover within the home improvements niche, potentially leveraging the company’s 20-year industry experience mentioned on the website to secure more contracts.

5. Regular Financial Health Checks:
   Given the mild decline in net assets and working capital, schedule periodic financial reviews to detect early symptoms of distress and respond proactively.

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