Company Number: 14157993

Analysis Date: 2025-07-29 18:59 UTC

Financial Health Assessment for SJR ELECTRICAL (U.K) LIMITED

---

1. Financial Health Score: Grade C

Explanation:
The company shows signs of financial strain with negative working capital and a significant decline in net assets over the last year. However, it remains solvent with positive net assets and no overdue filings, indicating it is still operational but under financial stress. The grade C reflects a condition that requires attention to avoid worsening health.

---

2. Key Vital Signs

Metric	31-Mar-2023	31-Mar-2024	Interpretation
Current Assets	£5,124	£3,427	Declining short-term liquidity indicates tightening cash flow.
Cash at Bank	£4,441	£2,744	Reduced cash reserves signal potential cash flow challenges.
Current Liabilities	£7,697	£10,130	Increased short-term debts raise pressure on liquidity.
Net Current Assets	-£2,573	-£6,703	Negative working capital worsening, a symptom of liquidity distress.
Net Assets (Equity)	£6,722	£1,198	Sharp fall in shareholders’ equity, indicating loss absorption.
Tangible Fixed Assets	£11,475	£9,754	Asset base declining, possibly through depreciation or disposals.

• Working Capital (Net Current Assets): This is the "pulse" of short-term financial health. The company’s negative working capital is deepening, a clear symptom of liquidity stress, meaning current obligations exceed short-term assets.
• Cash Position: Cash is the "lifeblood" for daily operations. Its reduction by over a third within a year is concerning and may limit the company's ability to meet immediate expenses.
• Net Assets: The equity "health reserve" has dropped significantly, suggesting accumulated losses or write-downs, putting shareholders' funds at risk.
• Creditors: Current liabilities rise by around 31%, increasing the "burden" on the company’s short-term finances.

---

3. Diagnosis: Financial Condition Assessment

SJR ELECTRICAL (U.K) LIMITED is exhibiting symptoms consistent with financial distress primarily related to liquidity and capital erosion:

• Liquidity Stress: The company’s current liabilities exceed current assets by £6,703 as of March 2024, worsening from the previous year. This negative working capital indicates the company may struggle to pay short-term debts as they fall due without additional financing or operational improvements.
• Capital Erosion: Net assets have declined sharply from £6,722 to £1,198 over one year, showing the company is burning through its equity base. This signals potential operational losses or impairments.
• Asset Base Reduction: The tangible fixed assets have been written down, possibly due to depreciation or asset disposal, which might impact operational capacity.
• No Audit Requirement: The company is exempt from audit given its size, so financial information relies on management accounts without external verification.
• No Employees Recorded: The absence of employees suggests the company may be heavily reliant on contractors or is in a setup phase, which might impact operational scalability or sustainability.

Overall, the company is currently "unwell" financially, requiring careful management of cash flow and liabilities to avoid insolvency risk.

---

4. Recommendations: Actions to Improve Financial Wellness

• Strengthen Cash Flow Management:
  Implement tighter credit control on debtors and negotiate extended payment terms with creditors to ease liquidity pressure. Consider short-term financing options if necessary to cover the negative working capital gap.

• Cost Control and Operational Efficiency:
  Review fixed costs and overheads to identify possible savings. Given no employees are reported, ensure contractor costs are controlled and aligned with revenue.

• Capital Injection:
  Explore equity funding or shareholder loans to rebuild net assets, providing a financial cushion to absorb losses and support growth.

• Asset Utilization Review:
  Evaluate the fixed assets to ensure they are necessary and efficiently used. Consider sale of underutilized assets to generate cash.

• Financial Monitoring:
  Establish a regular cash flow forecasting and financial review process to detect early warning signs and act proactively.

• Director and Governance Stability:
  Note that two directors resigned as of March 2024; ensure that governance is stable and responsibilities clearly assigned to support turnaround efforts.

---