JR GROUP DEVELOPMENTS LTD

Executive Summary

JR Group Developments Ltd exhibits a sound financial health profile for a newly incorporated company, with strong working capital and positive net assets indicating good liquidity and solvency. Key challenges include managing debtor collections and maintaining cash flow as the business scales. With prudent financial management and continued compliance, the company is well-positioned for stable growth in its early years.

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Company Analysis

This analysis is opinion only and should not be interpreted as financial advice.

JR GROUP DEVELOPMENTS LTD - Analysis Report

Company Number: 14673153

Analysis Date: 2025-07-29 16:53 UTC

Financial Health Assessment for JR GROUP DEVELOPMENTS LTD
(Financial Year Ending 28 February 2024)


1. Financial Health Score: B (Good Health with Early Stage Business Characteristics)

Explanation:
JR Group Developments Ltd is a newly incorporated company (Feb 2023) with initial financial statements reflecting a start-up phase. The company demonstrates solid working capital and positive net assets, indicating a stable financial footing. However, the limited operating history and small scale mean there is inherent uncertainty and less data to fully assess profitability and cash flow sustainability—common "growing pains" in early business life.


2. Key Vital Signs (Core Financial Metrics):

Metric Value (£) Interpretation
Fixed Assets 6,678 Small investment in plant and machinery; typical for a construction installation business.
Current Assets 66,247 Healthy level of short-term assets, mostly debtors and cash, indicating liquidity potential.
Cash 19,343 Positive cash balance shows some immediate liquidity; however, cash buffer is modest.
Debtors 46,904 Significant receivables indicate active sales but also potential collection risk.
Current Liabilities 15,749 Liabilities due within one year are modest and well covered by current assets.
Net Current Assets 50,498 Strong positive working capital (current assets minus current liabilities), indicating good short-term financial health.
Total Assets Less Current Liabilities 57,176 Asset base after covering short-term debts is positive, reflecting overall liquidity.
Net Assets / Shareholders' Funds 55,507 Equity exceeds liabilities; company is solvent and funded primarily by shareholders’ capital.
Number of Employees 3 Small workforce consistent with micro/small company profile.

Additional Notes:

  • The company is exempt from audit under the small company threshold, which is typical for new and small entities.
  • Directors' report states proper accounting compliance and basis of preparation under UK FRS 102.

3. Symptoms Analysis (What Numbers Reveal About Business Health):

  • Healthy Cash Flow Indicators: Although the company has a positive cash balance (£19.3k), the larger component of current assets is tied up in debtors (£46.9k). This suggests the company is generating sales but may experience some delay in cash inflows due to credit terms given to customers. The "healthy cash flow" here is moderate but watchful monitoring of debtor collection is essential to maintain liquidity.

  • Working Capital Strength: Net current assets of £50.5k indicate the company can comfortably cover its short-term debts, a vital sign of short-term financial stability. This "buffer" helps avoid liquidity distress.

  • Asset Base and Investment: Fixed assets are modest (£6.7k), typical for a company in "Other Construction Installation" where heavy asset investment may not be immediately required. Depreciation policies (25% straight line on plant and machinery) are conservative and aligned with industry norms.

  • Profitability and Retained Earnings: Retained earnings of £55.4k suggest accumulated profits or capital injections supporting the company. However, no detailed income statement is available, so profitability cannot be fully assessed—symptom of an early-stage company still building operational history.

  • Management and Control: Two directors with equal shareholdings indicate balanced control. One director resigned recently, which could be a normal transition or a signal to monitor governance stability.

  • Size and Growth Potential: With only 3 employees, the company is very small, reflecting a micro/small size classification. This limits operational scale but offers agility.


4. Diagnosis (Overall Financial Condition):

JR Group Developments Ltd is currently in a stable and solvent financial condition, demonstrating positive net assets and strong working capital indicative of a healthy financial "pulse." The financial "vital signs" reflect a company in its infancy, managing initial growth while maintaining liquidity and solvency. The absence of overdue filings and compliance with statutory requirements further supports an orderly financial and administrative condition.

The primary concern is the reliance on receivables, which could become a "symptom of distress" if debtor payments are delayed or defaulted. Given the small scale, the company must carefully manage cash flow and creditor relationships to avoid liquidity strain.


5. Prognosis (Future Financial Outlook):

Provided the company continues to efficiently collect receivables and controls expenses, the financial outlook is positive with potential for stable growth. The current equity base and working capital provide a solid foundation to support operational expansion. However, the company’s young age and small asset base mean it must remain vigilant to cash flow cycles and market conditions in the construction sector.


6. Recommendations (Actions to Improve Financial Wellness):

  • Enhance Debtor Management: Implement stricter credit control to convert receivables into cash more rapidly, reducing liquidity risk.

  • Build Cash Reserves: Aim to increase cash holdings to create a buffer against unforeseen expenses or market downturns.

  • Monitor Governance: With director changes recently, ensure governance structures remain robust and that management responsibilities are clear.

  • Plan for Growth: Consider strategic investments in fixed assets or workforce as operations expand, balancing growth with financial prudence.

  • Financial Reporting: Although currently exempt from audit, as the company grows, consider voluntary audits or independent reviews to enhance financial transparency and stakeholder confidence.

  • Risk Assessment: Conduct regular reviews of market and operational risks, especially in the construction installation sector, to anticipate and mitigate potential financial shocks.



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