NJD LOGISTICS LTD

Executive Summary

NJD Logistics Ltd is currently facing liquidity challenges indicated by negative working capital and declining net assets, signaling early financial distress symptoms. While still solvent and compliant, the company should urgently address cash flow management and consider capital reinforcement to stabilize its financial health and support sustainable operations.

NJD LOGISTICS LTD - Analysis Report

Company Number: 13917290

Analysis Date: 2025-07-29 20:57 UTC

Financial Health Assessment for NJD LOGISTICS LTD

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1. Financial Health Score: C

Explanation:
NJD Logistics Ltd displays some fundamental signs of financial strain, notably negative working capital and declining net assets, which are symptoms that warrant attention. However, the company remains solvent with positive net assets and no overdue filings, indicating it is still operationally viable but with caution advised.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Fixed Assets	6,449	9,674	Decreasing fixed assets may indicate asset disposal or depreciation. Potentially reducing long-term operational capacity.
Current Assets	22,013	16,351	Increase is positive; more liquid resources available to meet short-term needs.
Current Liabilities	27,029	23,424	Increasing current liabilities suggest rising short-term obligations, creating liquidity pressure.
Net Current Assets (Working Capital)	-5,016	-7,073	Negative working capital indicates difficulty covering short-term debts with current assets, a sign of liquidity stress.
Total Assets Less Current Liabilities	1,433	2,601	Declining trend denotes shrinking buffer after short-term debts are accounted for.
Net Assets (Equity)	833	2,176	Equity is positive but declining, reflecting accumulated losses or withdrawals.
Shareholders Funds	833	2,176	Same as net assets; equity base is shrinking.

Additional Notes:

• The company employs only 1 person (the director), indicating a micro-scale operation.
• No audit required due to micro-entity status, so financials are unaudited (less independent verification).
• No overdue filings; regulatory compliance is good.
• Director and 100% owner is Nigel John Dyer, concentrated control could impact decision agility.

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3. Diagnosis: Financial Condition and Business Health

NJD Logistics Ltd shows signs of financial distress primarily characterized by:

• Negative Working Capital: The company’s current liabilities exceed current assets by over £5,000, indicating it may struggle to cover short-term obligations without additional financing or improved cash inflows. This is a classic "symptom of distress" in liquidity terms.

• Declining Net Assets: The drop in net assets from £2,176 to £833 over the last year suggests the company has incurred losses or shareholder withdrawals. This shrinking equity base weakens financial stability—akin to a patient losing vital strength over time.

• Decreasing Fixed Assets: The reduction in fixed assets may reflect disposals or depreciation, which could impact operational capacity or future revenue generation if not replenished.

• Increasing Current Liabilities: Rising short-term debts create pressure on cash flows, increasing the risk of liquidity crunches.

Overall, while the company is still solvent (net assets positive) and compliant with filings, its "vital signs" indicate strained liquidity and weakening financial reserves. This situation should be monitored closely to avoid worsening conditions that could impair business continuity.

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4. Recommendations: Steps to Improve Financial Wellness

1. Improve Working Capital Management:

   • Accelerate collection of receivables and optimize inventory turnover (if applicable) to increase current assets.
   • Negotiate longer payment terms with suppliers to reduce current liabilities pressure.

2. Cost Control and Profitability Focus:

   • Review operating expenses to identify savings opportunities and improve net income.
   • Explore ways to increase revenue or diversify client base to build reserves.

3. Capital Injection or Financing:

   • Consider additional equity investment or short-term financing to bolster liquidity and working capital.
   • Maintain transparency with any lenders or investors about financial position and recovery plans.

4. Asset Management:

   • Evaluate the impact of reduced fixed assets on operations and plan for necessary reinvestment if needed to sustain business activities.

5. Regular Financial Monitoring:

   • Establish monthly cash flow forecasting and financial reviews to catch emerging "symptoms" early and adjust strategy proactively.

6. Governance and Risk Management:

   • With sole director control, consider engaging external advisory for independent financial oversight and strategic guidance.

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