JOSEPHINE SCOTT LTD

Executive Summary

JOSEPHINE SCOTT LTD is currently facing significant financial stress characterized by negative net assets and large short-term liabilities, risking liquidity issues. Immediate action on improving cash flow, reducing liabilities, and securing additional capital is necessary to stabilize and improve the company's financial health. Without intervention, the company’s financial condition may deteriorate further.

JOSEPHINE SCOTT LTD - Analysis Report

Company Number: 13910412

Analysis Date: 2025-07-29 20:31 UTC

Financial Health Assessment for JOSEPHINE SCOTT LTD (as of 31 March 2024)

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1. Financial Health Score: D

Explanation:
JOSEPHINE SCOTT LTD is currently exhibiting signs of financial distress. The company has significant net current liabilities and negative net assets, indicating it owes more in the short term than it owns in liquid assets and has an overall negative equity position. While it is active and compliant with filings, the financial "vital signs" suggest the company is struggling to maintain a healthy balance sheet and working capital position.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	66,468	Growing investment in long-term assets, positive sign.
Current Assets	132,436	Cash, stock, and receivables; has increased since last year.
Current Liabilities	330,385	Debts due within one year; sharply increased, alarming.
Net Current Assets	-197,949	Negative working capital; company may struggle to fund daily operations.
Net Assets / Shareholders' Funds	-131,481	Negative equity; liabilities exceed assets, indicating insolvency symptoms.
Cash (last year reported)	33,863	Low cash reserves relative to liabilities; cash flow likely strained.
Number of Employees	1	Very small operation, minimal overheads but limited scalability.

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3. Diagnosis

The company’s financial "symptoms" include:

• Severe working capital deficit: With current liabilities exceeding current assets by nearly £198k, the company may face liquidity issues, struggling to meet short-term obligations.
• Negative net assets: The balance sheet reflects the company owes more than it owns, a classic symptom of financial distress.
• Rapid increase in liabilities: Current liabilities have more than doubled from the previous year, suggesting rising debts or delayed payments.
• Limited cash buffer: While cash was reported as £33,863 in 2023, given the liabilities, this is insufficient to cover immediate debts.
• Micro entity status with limited financial disclosures: As a micro entity, detailed profit and loss data is unavailable, limiting insight into profitability and cash flow trends, but the balance sheet alone signals caution.

Overall, JOSEPHINE SCOTT LTD is showing signs of financial strain akin to a patient with low blood pressure and poor circulation—funds are insufficient to sustain daily operations without additional support or restructuring.

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4. Recommendations

To improve financial wellness and stabilize operations, the company should consider the following:

1. Improve Liquidity and Working Capital:

   • Seek to reduce short-term liabilities via negotiation with creditors, extended payment terms, or debt restructuring.
   • Accelerate collections from debtors and optimize inventory turnover to free up cash.

2. Capital Injection:

   • Consider additional equity investment from existing shareholders or external investors to restore positive net assets and provide operating cash.

3. Cost Control and Efficiency:

   • Review and optimize operational costs to preserve cash, given the small scale of the business.
   • Focus on profitable sales activities, possibly scaling back less profitable lines.

4. Financial Monitoring:

   • Implement strict cash flow forecasting and budgeting to anticipate and avoid liquidity crises.
   • Engage financial advisory support to develop a turnaround plan.

5. Strategic Review:

   • Assess business model viability given current financial stress; explore partnerships or new revenue streams in the retail/wholesale clothing niche.

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Medical Analogy Summary

Think of JOSEPHINE SCOTT LTD as a patient with "hypovolemia" (low blood volume) — the financial blood (cash and liquid assets) is insufficient to meet the body's demands (liabilities). Without immediate intervention (capital infusion, cost control), the risk of "organ failure" (insolvency or collapse) grows. Early diagnosis and action can restore health and ensure sustainable operations.

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