PJW HOSPITALITY LTD

Executive Summary

PJW Hospitality Ltd is financially stable with positive net assets and working capital, typical for a micro-entity in consultancy. The company shows no immediate distress, but a slight decline in equity and narrow working capital margins suggest cautious management of liquidity and internal loans is necessary. With focused cash flow management and profitability improvements, the company has a positive outlook for maintaining financial health.

PJW HOSPITALITY LTD - Analysis Report

Company Number: 13837296

Analysis Date: 2025-07-20 11:25 UTC

Financial Health Assessment for PJW Hospitality Ltd

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1. Financial Health Score: B

Explanation:
PJW Hospitality Ltd shows signs of financial stability with positive net assets and net current assets, indicating a generally healthy balance sheet for a micro-entity. The company’s working capital position is positive, but the scale and absolute values of assets and liabilities are modest, befitting its micro status. However, there is a slight decline in net assets compared to the prior year, which warrants attention. Overall, the company is financially sound but should monitor its cash flow and liabilities carefully to maintain this status.

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2. Key Vital Signs

Metric	2025 Value (£)	Interpretation
Fixed Assets	722	Very low fixed asset base indicates limited investment in long-term resources.
Current Assets	10,139	Healthy current assets, primarily cash or receivables, showing liquidity.
Current Liabilities	9,515	Current liabilities close to current assets, tight working capital margin.
Net Current Assets (Working Capital)	624	Positive working capital - short-term financial "pulse" is stable but narrow.
Total Net Assets	1,346	Positive equity indicates solvency; company owns more than it owes.
Shareholders Funds	1,346	Equity fully matches net assets, showing no hidden liabilities.
Director Loans	2,000	Unsecured, interest-free loan from director - an internal financing symptom.

Interpretation:

• The company has a "healthy cash flow" indicator given that current assets exceed current liabilities, but the margin is slim, signaling a potential sensitivity to any sudden cash outflows.
• The modest fixed asset base and relatively stable net assets suggest a lean operation, typical for a micro entity in consultancy.
• Director loans indicate reliance on internal financing, which can be a symptom of limited external funding access or a deliberate funding strategy.

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3. Diagnosis

PJW Hospitality Ltd is in a stable financial condition characterized by positive net assets and a small but positive working capital. The company is operating as a micro-entity with minimal fixed assets and a single employee (director), which is consistent with its management consultancy activities. The slight decrease in net assets from £1,685 in 2024 to £1,346 in 2025 suggests some erosion of equity, possibly due to operating losses or increased liabilities. The unsecured director loan shows some internal support, which is common in small companies but should be monitored to avoid over-reliance.

The company’s financial "vital signs" do not show acute distress symptoms such as negative net assets or large overdue liabilities. However, the narrow working capital margin could be a "symptom of financial strain" if current liabilities increase or current assets decrease suddenly.

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4. Recommendations

• Improve Working Capital Buffer: Aim to increase net current assets to provide a stronger margin against short-term liabilities. This might involve accelerating receivables collection or managing payables prudently.
• Monitor Director Loan: Formalize the director loan terms where possible and consider minimizing reliance on director advances to reduce potential risks in internal financing.
• Profitability Focus: Review operational expenses and revenue streams to reverse the slight decline in net assets and build retained earnings. Sustainability in profitability is key to long-term wellness.
• Cash Flow Management: Maintain detailed cash flow forecasts to anticipate and manage liquidity needs, ensuring "healthy cash flow" remains intact.
• Regular Financial Reviews: Establish routine financial check-ups to detect early signs of distress and adjust strategies accordingly.
• Consider Growth Investments: If the business plan supports, gradually increase fixed assets or working capital to facilitate growth without compromising liquidity.

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