J&S GILES LIMITED

Executive Summary

J&S GILES LIMITED exhibits solid financial health with strong liquidity, growing equity, and improved solvency. The company manages its working capital effectively and is investing in assets to support growth, though attention should be paid to debtor management and inventory levels. Overall, the outlook is positive with prudent financial management recommended to sustain this trajectory.

J&S GILES LIMITED - Analysis Report

Company Number: 14252607

Analysis Date: 2025-07-20 16:46 UTC

Financial Health Assessment for J&S GILES LIMITED (Year Ending 30 September 2024)

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1. Financial Health Score: B

Explanation:
J&S GILES LIMITED presents a generally robust financial position with strong liquidity, positive net assets, and growing shareholder equity. The company shows healthy working capital and manageable debt levels, indicating good operational stability. However, the presence of significant long-term creditors and some volatility in debtors suggests room for improvement to reach an 'A' grade.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Fixed Assets	289,785	242,260	Moderate investment in long-term assets, including goodwill amortising steadily.
Current Assets	785,614	781,172	Strong short-term asset base, stable year-over-year.
Cash at Bank	529,345	425,685	Healthy cash reserves, improving liquidity ("healthy cash flow").
Debtors	255,769	273,333	Slight decrease, but trade debtors dropped significantly, offset by rise in other debtors—monitor collection efficiency.
Current Liabilities	320,204	303,979	Current debts well covered by current assets; positive net current assets (£465k).
Net Current Assets	465,410	477,193	Solid working capital ("good pulse"), supporting day-to-day operations.
Long-Term Creditors	356,184	440,000	Noticeable reduction in long-term liabilities, improving solvency.
Net Assets / Shareholders’ Funds	378,952	278,215	Increased equity base suggests retained earnings growth and financial strengthening.
Stock	500	82,154	Significant reduction in stock, reducing risk of obsolescence, but stock levels very low.

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3. Diagnosis

• Liquidity & Cash Flow:
  The company’s liquidity is "healthy" with a large cash balance (£529k) and net current assets of £465k, indicating it can comfortably meet short-term obligations. The stable current assets and liabilities ratio shows effective working capital management.

• Solvency:
  Net assets increased by ~36% to £379k, reflecting retained profits and equity strengthening. The reduction in long-term creditors from £440k to £356k is a positive sign, reducing leverage risk. The company is solvent with assets exceeding liabilities by a comfortable margin.

• Asset Management:
  Goodwill amortisation is systematic and indicates the company is carefully managing intangible asset values. Tangible fixed assets increased, showing investment in plant and machinery, likely to support operational capacity. The sharp decline in stock may reflect improved inventory management or a shift in business model, reducing carrying costs but requiring attention to supply chain reliability.

• Receivables & Creditors:
  Trade debtors decreased significantly, which could be a positive sign of quicker collections. However, other debtors increased, so the overall picture warrants monitoring to avoid potential collection issues ("symptoms of distress" if rising). Creditors increased slightly but remain well covered.

• Profitability (Indirect):
  While the company has not disclosed profit and loss details, the increase in retained earnings suggests profitability. However, monitoring expenses relating to amortisation and depreciation is important.

• Employee Growth:
  Number of employees increased from 3 to 6, indicating business growth and increased capacity but also higher ongoing costs.

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4. Recommendations

• Cash Flow Monitoring:
  Maintain vigilant control over debtor collections, especially "other debtors," to prevent liquidity stress. Consider tighter credit terms or enhanced credit control procedures.

• Long-Term Debt Management:
  Continue the positive trend of reducing long-term liabilities to improve financial flexibility and reduce interest expenses.

• Inventory Control:
  Investigate the sharp reduction in stock levels to ensure it aligns with operational needs and does not risk supply chain interruptions.

• Profit & Loss Transparency:
  Although exempt from audit, consider producing internal profit and loss statements for detailed financial monitoring and strategic decision-making.

• Asset Utilization:
  Monitor the return on new tangible assets investments to ensure they contribute positively to operational efficiency and profitability.

• Growth & Staffing:
  Align workforce expansion with revenue growth to keep employee costs sustainable.

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