SJB QUALITY CONSULTING LTD

Executive Summary

SJB QUALITY CONSULTING LTD demonstrates solid financial health with increasing net assets and positive working capital, indicating operational growth and stability. The company’s main challenges revolve around managing rising receivables and ensuring sufficient liquidity for tax obligations. With focused debtor management and cash flow oversight, the business is well-positioned for continued financial wellness.

SJB QUALITY CONSULTING LTD - Analysis Report

Company Number: 14357217

Analysis Date: 2025-07-29 12:26 UTC

Financial Health Assessment: SJB QUALITY CONSULTING LTD (as of 30 September 2024)

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1. Financial Health Score: B

Explanation:
SJB QUALITY CONSULTING LTD exhibits a solid and improving financial position with positive net assets and working capital growth. The company is young, with just over two years of operation, and demonstrates healthy liquidity and shareholder equity growth. However, some caution is warranted due to its small scale, limited asset base, and concentration of control in a single individual. The absence of an audit (due to small company exemptions) and limited operational scale keep the score from an A grade at this stage.

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2. Key Vital Signs

Metric	2024 Value (£)	2023 Value (£)	Interpretation
Fixed Assets	693	1,027	Very low, typical of small consultancy; minimal investment in long-term assets.
Current Assets	34,763	21,461	Growing, reflects increased receivables and cash holdings.
Cash on Hand	16,961	18,889	Healthy cash reserves but slight decrease; still adequate.
Debtors (Receivables)	17,802	2,572	Significant increase; indicates growing sales but potential risk of late payments.
Current Liabilities	26,498	18,948	Increase consistent with business growth; includes £16,122 tax liability.
Net Current Assets (Working Capital)	8,265	2,513	Positive and increasing; a sign of healthy short-term financial stability.
Net Assets / Shareholders' Funds	8,958	3,540	Increasing retained earnings and equity; good sign of value creation.
Employees	1	1	Sole operator or very small team; operational risk concentrated.

Interpretation of Vital Signs:

• Healthy cash flow: The company maintains positive cash balances, supporting operational needs without liquidity stress.
• Growing receivables: The sharp rise in debtors suggests expanding business but requires management to ensure timely collections to avoid cash flow strain.
• Stable working capital: Positive and growing net current assets indicate the company can cover short-term debts comfortably.
• Low fixed assets: Reflects the nature of consultancy services; low asset intensity reduces financial burden.
• Tax liability: A sizeable current tax creditor signals profitability but also the need to manage cash flow around tax payments carefully.
• Single employee: The business depends heavily on the director, posing a "single point of failure" risk.

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3. Diagnosis

SJB QUALITY CONSULTING LTD is in a generally healthy financial condition, showing clear signs of business growth and strengthening equity. The company’s balance sheet "vital signs" point to a stable, solvent business with adequate liquidity to meet obligations. The increase in net current assets and net assets over the last year is a positive symptom of operational success and retained profitability.

However, the marked increase in debtors signals a potential symptom of customer payment delays or extended credit terms, which could lead to cash flow distress if not managed properly. The relatively modest cash reserves compared to rising liabilities, especially the tax creditor, require monitoring to ensure liquidity remains sufficient.

The company’s financial health is bolstered by the director’s full ownership and control, which can enable swift decision-making but also concentrates business risk. The absence of audit and small company exemptions mean less external financial scrutiny, so internal financial discipline is critical.

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4. Recommendations

• Improve Debtor Management:
  Implement stricter credit control and faster collection processes to reduce accounts receivable days and improve cash flow reliability.

• Cash Flow Monitoring:
  Maintain close watch on cash balances, especially around tax payment dates, to avoid liquidity crunches.

• Build Cash Reserves:
  Aim to increase cash holdings to cover at least 3 months of operating expenses to create a financial buffer against unexpected downturns.

• Diversify Operational Risk:
  Consider expanding the team or building operational redundancies to reduce dependency on the sole director.

• Regular Financial Reviews:
  Even though unaudited, conduct periodic internal reviews to identify financial trends early and adjust strategies accordingly.

• Plan for Growth:
  As the company grows, reassess the need for audited accounts or enhanced financial controls to meet stakeholder expectations.

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