JWPR ENTERPRISES LTD
Executive Summary
JWPR Enterprises Ltd has exhibited a significant weakening in its financial position over the last year, moving into net liabilities and negative working capital, which raises high solvency and liquidity risks. While regulatory filings are up to date and governance appears straightforward, the company currently depends on director financial support to continue operations. Further due diligence on profitability drivers, cash flows, and the sustainability of financial support is recommended before considering investment.
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This analysis is opinion only and should not be interpreted as financial advice.
JWPR ENTERPRISES LTD - Analysis Report
Risk Rating: HIGH
The company exhibits a deteriorated financial position as of the latest accounts with net liabilities and negative working capital. This raises significant concerns regarding solvency and liquidity.Key Concerns:
- Negative Net Current Assets: At the year ended 30 November 2023, net current assets stand at -£5,364, a sharp decline from +£7,290 the previous year, indicating potential liquidity stress.
- Net Liabilities Position: Shareholders’ funds and net assets have swung from positive £7,874 in 2022 to negative £5,020 in 2023, reflecting accumulated losses or write-downs that exceed equity.
- Director Loan and Financial Support: The director’s loan balance has increased to £6,503, and the director has explicitly stated ongoing financial support is necessary for the company to continue as a going concern, implying reliance on external funding rather than operational cash flow.
- Positive Indicators:
- Timely Filing and Compliance: The company is up to date with both accounts and confirmation statement filings, indicating regulatory compliance and governance diligence.
- Single Director and Controlling Shareholder: Clear governance with one director who also holds majority control may simplify decision-making and strategic direction.
- No Audit Requirement: The company qualifies for exemption from audit, consistent with its size and reducing administrative burden.
- Due Diligence Notes:
- Examine the Detailed Profit and Loss Account: Since only filleted accounts were filed, review the full P&L to understand the causes of the significant decline in net assets and profitability.
- Assess Cash Flow and Debt Profile: Investigate the timing and nature of liabilities, especially other creditors which increased significantly, to evaluate cash flow pressures.
- Review Director’s Financial Support Terms: Clarify the sustainability and terms of the director loan and confirm any plans for recapitalization or operational turnaround.
- Evaluate Stock Valuation and Debtor Quality: Stocks represent a large proportion of current assets; assess the risk of stock obsolescence or slow-moving inventory, as well as the collectability of debtors.
Executive Summary
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