JON THOMAS WINDOWS LTD

Executive Summary

JON THOMAS WINDOWS LTD shows signs of financial distress with negative working capital and eroding equity, indicating liquidity and solvency challenges. Immediate action to improve cash flow, strengthen the capital base, and control costs is essential to restore financial health and ensure business continuity.

JON THOMAS WINDOWS LTD - Analysis Report

Company Number: 13157585

Analysis Date: 2025-07-29 20:59 UTC

Financial Health Assessment: JON THOMAS WINDOWS LTD (as of 31 January 2024)

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1. Financial Health Score: D

Explanation:
This score reflects a company exhibiting clear symptoms of financial distress. Negative net assets and persistent working capital deficits suggest liquidity issues and an eroded equity base. While the company remains active, its financial "vital signs" indicate a weakened position that requires urgent attention to avoid deterioration.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	5,906	Modest long-term investment in equipment or property.
Current Assets	2,994	Cash, receivables and stock available to cover short-term debts.
Current Liabilities	10,539	Obligations due within one year; high compared to current assets.
Net Current Assets (Working Capital)	-7,545	Negative working capital: liquidity strain, potential cash flow crunch.
Total Assets less Current Liabilities	-1,640	Indicates that the company’s liquid assets and fixed assets combined cannot cover short-term debts.
Net Assets / Shareholders' Funds	-2,000	Negative equity; accumulated losses or capital erosion.
Share Capital	1	Minimal capital invested by shareholders; typical for micro entities.

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3. Diagnosis: What the Financial Data Reveals

• The company is showing symptoms of financial distress primarily due to persistent negative working capital and declining net assets.
• Over the past three years, net current assets have consistently been negative (around -£7,500), indicating a chronic inability to cover short-term liabilities with current assets. This can lead to cash flow problems, difficulty paying suppliers, and potential insolvency risk.
• The net assets have declined from a positive £4,704 in 2021 to a negative £2,000 in 2024, showing erosion of the company’s equity base. This points to accumulated losses or withdrawals exceeding profits.
• The fixed assets have also decreased from £10,500 in 2021 to £5,906 in 2024, possibly due to asset disposals or depreciation, reducing the cushion of long-term resources.
• The company has only one employee (the director), which suggests a very small operational scale but also limited capacity for revenue generation.
• The director Jonathan Thomas has full control, which is positive for swift decision-making but also concentrates risk.
• The company is classified as a micro-entity and has not been audited, which limits the depth of financial scrutiny.
• Overall, the financial "pulse" indicates poor liquidity and weakened solvency—the company is at risk of being unable to meet its debts as they fall due.

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4. Recommendations: Actions to Improve Financial Wellness

• Improve Liquidity:

  • Negotiate better payment terms with suppliers to extend current liabilities.
  • Accelerate collection of receivables or reduce stock levels to increase current assets.
  • Consider a short-term financing facility (e.g., overdraft) to cushion cash flow shortages.

• Strengthen Capital Base:

  • Inject additional equity capital or shareholder loans to restore positive net assets.
  • Explore grants or government-backed support schemes for small businesses in Wales.

• Cost Control and Revenue Enhancement:

  • Review operational expenses critically to cut unnecessary costs.
  • Increase marketing efforts or diversify product/service offerings to boost sales.

• Asset Management:

  • Evaluate the fixed assets for potential sale or better utilization to improve cash position.

• Financial Monitoring:

  • Implement regular cash flow forecasting to detect future liquidity issues early.
  • Engage an accountant or financial advisor for ongoing financial health monitoring.

• Governance and Compliance:

  • Ensure timely filing of accounts and confirmation statements to avoid penalties.
  • Maintain clear records of director and shareholder decisions impacting finances.

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