JOANNE WILKES LTD

Executive Summary

JOANNE WILKES LTD is showing signs of improved short-term liquidity with a healthy increase in current assets and reduced liabilities, which is encouraging. However, the disappearance of fixed assets and a large increase in provisions wiping out net assets indicate underlying financial stress that needs urgent attention. Careful management of liabilities and strategic asset planning are recommended to restore financial health and ensure sustainable operations.

JOANNE WILKES LTD - Analysis Report

Company Number: 14572063

Analysis Date: 2025-07-29 21:02 UTC

Financial Health Assessment: JOANNE WILKES LTD

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1. Financial Health Score: C

Explanation:
The company shows some positive signs such as positive net current assets in the latest period, indicating better short-term liquidity. However, the sudden disappearance of fixed assets and the presence of significant provisions for liabilities wiping out net assets signals underlying financial strain. Overall, this points to a company in a fragile state with improvement potential but carrying symptoms of financial distress.

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2. Key Vital Signs

Metric	Latest Period (31 Mar 2025)	Previous Period (31 Jan 2024)	Interpretation
Fixed Assets	£0	£12,790	Sudden drop to zero suggests asset disposal or impairment; could reduce long-term earning capacity.
Current Assets	£6,199	£179	Healthy increase indicating improved liquid resources (cash/debtors).
Current Liabilities	£7	£348	Significant decrease improves short-term obligations management.
Net Current Assets (Working Capital)	£6,192	-£103	Shift from negative to positive shows improved short-term financial health — a vital sign of liquidity recovery.
Provisions for Liabilities	£6,192	£4,824	Increase in provisions suggests potential or recognized liabilities, weighing heavily on net assets.
Net Assets / Shareholders’ Funds	£0	£7,863	Net assets wiped out due to provisions, indicating balance sheet stress and possible erosion of owner equity.
Average Employees	1	1	Stable, small workforce consistent with micro company status.

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3. Diagnosis: What the Financial Data Reveals

• Healthy Cash Flow Signals: The increased current assets combined with a drastically reduced current liability position indicate improved liquidity. The company has more short-term assets to cover immediate debts, which is a "healthy pulse" showing better day-to-day payment ability.

• Symptoms of Distress: The elimination of fixed assets from £12,790 to zero in just over a year is a serious symptom. This could reflect asset sales to raise cash, write-downs, or disposals due to operational changes. It may impair future revenue-generating capacity if these assets were critical.

• Balance Sheet Weakness: Provisions for liabilities have increased to match the net current assets, wiping out net asset value. This signals a "shadow condition" where potential liabilities or contingencies heavily burden the company, eroding equity and indicating financial strain.

• Micro Entity Status: As a small, single-director company with limited staff and simplified accounts, the business is likely in an early stage or niche market position (personal training and health coaching). This limits complexity but also financial resilience due to small scale.

• Control and Governance: The sole director and 100% shareholder control (Mrs Joanne Gorton) allows for quick decision-making but concentrates risk and responsibility. The company remains active and compliant with filing deadlines, indicating administrative "vitality."

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4. Recommendations for Improving Financial Wellness

• Clarify and Manage Provisions: Investigate the nature of the provisions for liabilities. If these are contingent liabilities or expected costs, develop a clear plan to resolve or mitigate them. This is critical to restore net asset strength and investor confidence.

• Asset Strategy Review: Examine the reasons behind the fixed asset disappearance. If assets were sold out of necessity, consider reinvesting in essential equipment or resources to sustain or grow the business. Alternatively, adjust the business model to fit the asset-light structure.

• Boost Working Capital: Maintain or further enhance current assets and manage liabilities tightly to keep working capital positive. Consider negotiating payment terms with suppliers and accelerating debtor collections to maintain liquidity.

• Financial Planning and Forecasting: Implement detailed cash flow forecasting and budgeting to anticipate potential shortfalls early. This will help avoid liquidity crises and allow proactive measures.

• Seek External Advice: Given the symptoms of financial distress, consider consulting a financial advisor or accountant to explore restructuring options or additional funding sources if necessary.

• Governance and Controls: As a sole director company, ensure robust financial controls and separation of duties where possible to avoid oversight errors and ensure compliance.

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