Company Number: 12697011

Analysis Date: 2025-07-29 15:25 UTC

1. Credit Opinion: DECLINE
   JSTAY LIMITED shows a persistent negative net asset position deteriorating from (£14,596) in 2020 to (£121,864) in 2024, indicating erosion of equity and financial weakness. Current liabilities far exceed current assets, particularly in the latest year where current liabilities stand at £657k against current assets of only £2.6k, signaling a severe working capital deficiency and liquidity risk. The company is reliant on long-term creditors and has minimal cash reserves (£1,118 in 2024). The absence of positive shareholder funds and the high leverage raise concerns about the company’s ability to meet debt obligations. There is also no indication of profitability or cash flow improvement in the data provided. Given these factors, the risk of default is high and credit facilities are not recommended at this time.

2. Financial Strength:
   The balance sheet shows negative shareholders’ funds worsening year-on-year, driven by growing liabilities and insufficient asset growth. Fixed assets increased primarily through intangible assets (likely software or platform development) with no amortisation charged, implying potentially inflated asset values and uncertain recoverability. Tangible fixed assets (motor vehicles) are minimal and depreciated. The company’s net current assets have eroded drastically from £11k in 2020 to £2.6k in 2024, evidencing tight liquidity. The sizeable creditor balance classified as amounts falling due after more than one year (£657k) is a significant risk, especially without clarity on terms or security. The company’s financial position is fragile and highly leveraged.

3. Cash Flow Assessment:
   Liquid cash is minimal at £1,118, down from £39,609 in the prior year, suggesting cash burn and weak operational cash inflows. Debtors are negligible and unlikely to contribute meaningfully to working capital. Current liabilities are very high relative to available liquid resources, raising solvency concerns. The company depends on creditor funding and possibly director loans (none currently recorded), which is not sustainable. Overall, the cash flow position is weak, with insufficient liquidity to cover short-term obligations.

4. Monitoring Points:

• Monitor liquidity ratios closely, especially current ratio and quick ratio, for further deterioration.
• Watch creditor balances and any restructuring of debt terms or new financing arrangements.
• Review cash flow statements and profit & loss accounts for evidence of operational improvements or cost control.
• Track any changes in intangible asset valuation or amortisation policies that could impact net asset values.
• Assess director conduct and any additional funding from insiders.
• Keep an eye on overdue filings or changes in company status that might indicate distress.