JTMB ONLINE LTD
Executive Summary
JTMB ONLINE LTD is currently in a vulnerable financial position characterized by negative working capital and net liabilities, signaling liquidity and solvency challenges typical of early-stage micro-entities. Immediate measures to bolster cash reserves, reduce short-term debts, and stimulate operational activity are crucial to restore financial health and ensure business viability.
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This analysis is opinion only and should not be interpreted as financial advice.
JTMB ONLINE LTD - Analysis Report
Financial Health Assessment of JTMB ONLINE LTD
1. Financial Health Score: D
Explanation:
The company exhibits clear symptoms of financial distress, primarily due to negative net current assets and net liabilities. This indicates an imbalance between short-term resources and obligations, suggesting liquidity challenges. The score D reflects a cautionary position where urgent attention is needed to avoid worsening conditions.
2. Key Vital Signs
Metric | Value (£) | Interpretation |
---|---|---|
Current Assets | 426 | Very low level of liquid assets available to meet short-term obligations. |
Current Liabilities | 540 | Slightly higher than current assets, indicating immediate debts exceed liquid resources. |
Net Current Assets (Working Capital) | -114 | Negative working capital—a key symptom of cash flow strain and potential inability to pay debts on time. |
Total Assets less Current Liabilities | -114 | Company’s total resources after short-term debts are negative, signaling financial stress. |
Net Assets / Shareholders’ Funds | -114 | Negative equity position; shareholders’ funds are in deficit, which is a serious concern especially for a micro-entity. |
Employees | 0 | No staff employed, which may reduce operational expenses but also indicates limited business activity. |
3. Diagnosis
JTMB ONLINE LTD is showing symptoms of financial distress, specifically liquidity issues reflected by negative net current assets and net liabilities of £114. This means the company does not have enough short-term assets to cover its immediate liabilities, a situation comparable to a patient whose vital organ function is compromised and requires urgent intervention.
The company's micro-entity status and recent incorporation (Dec 2022) suggest it is in the early stages of its business lifecycle. The absence of employees might indicate a non-operational or very lean setup, which might be intentional or a symptom of underdevelopment.
Negative equity further highlights that the company has accumulated losses or liabilities exceeding its assets, which could limit its ability to raise funds or sustain operations without additional capital.
The presence of a sole significant controller owning 75-100% of shares may simplify decision-making but also concentrates financial risk.
4. Recommendations
To improve financial wellness and move towards a healthier financial state, the company should consider:
Improve Liquidity:
Increase current assets by injecting capital or converting receivables into cash faster. This is akin to boosting blood flow to revive a weakened system.Reduce Short-term Liabilities:
Negotiate longer payment terms with creditors or settle some liabilities to restore balance between assets and debts.Capital Injection:
The sole shareholder could consider additional equity investments to eliminate negative net assets and strengthen the balance sheet.Operational Review:
Assess the business model and revenue generation plans since no employees are currently on payroll, possibly indicating no active trading. Generating revenues or securing contracts is essential for sustainable cash flow.Cost Management:
Keep overheads low to preserve cash, especially while the business is in its nascent phase.Regular Monitoring:
Implement monthly financial reviews to catch early warning signs and adjust strategies promptly.Professional Advice:
Engage with financial advisors or accountants to forecast cash flows and plan growth or turnaround strategies effectively.
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