Company Number: 13146574

Analysis Date: 2025-07-20 17:20 UTC

Financial Health Assessment for NJF LIMITED

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1. Financial Health Score: D

Explanation:
NJF LIMITED shows persistent negative net assets and net current assets over the last three years, indicating financial distress. The company's liabilities significantly exceed its current assets, reflecting a weak liquidity position and a capital deficit. While the business remains active and compliant with filing deadlines, the financial "symptoms" suggest underlying solvency issues needing urgent attention.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	272	1,420	Very low cash/resources to cover short-term debts
Current Liabilities	8,249	3,400	High short-term debts increasing over time
Net Current Assets	-7,947	-1,980	Negative working capital, "symptom of liquidity stress"
Net Assets	-9,233	-3,280	Shareholders' funds are negative, indicating insolvency risk
Share Capital	100	100	Minimal invested capital, limited buffer for losses
Employees	1	1	Small workforce, typical for micro-entity

Interpretation:

• The current ratio (current assets/current liabilities) is approximately 0.03 in 2024, far below the healthy benchmark of 1.2-2. This indicates the company’s inability to cover its short-term debts with available current assets—akin to a patient with critically low blood pressure signaling immediate risk.
• Negative net assets means liabilities exceed assets, a "diagnostic red flag" for solvency concerns and potential creditor pressure.
• The increasing scale of liabilities combined with dwindling assets suggests the financial condition is deteriorating, similar to worsening symptoms in an untreated illness.

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3. Diagnosis

NJF LIMITED is exhibiting clear signs of financial distress marked by chronic negative net assets and weak liquidity. The company’s working capital deficit means it may struggle to meet immediate obligations without external support or capital injection. Despite filing compliance and active status, the balance sheet reveals a "weak heart" in financial terms—risk of insolvency if current trends persist.

The micro-entity scale means the company operates on a very small capital base with limited resources to absorb losses. The sole director, who also controls the majority shareholding, may face challenges in sustaining operations without strategic financial restructuring.

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4. Recommendations

• Inject Additional Capital: To restore the "financial pulse," an infusion of equity or shareholder loans is critical to improve net assets and working capital. This acts like administering emergency fluids to a dehydrated patient.
• Manage and Reduce Liabilities: Engage creditors to negotiate payment terms or restructuring to reduce short-term pressure and avoid insolvency triggers.
• Improve Cash Flow: Tighten credit control, optimize inventory (if any), and increase sales focus to generate a healthier cash flow stream.
• Regular Financial Monitoring: Implement monthly cash flow forecasts and management accounts to detect early warning signs and respond proactively.
• Explore Professional Advice: Consider consulting insolvency practitioners or business turnaround experts if financial conditions worsen, to evaluate formal restructuring options.

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