SRJ ACCOUNTANCY LTD

Executive Summary

SRJ ACCOUNTANCY LTD shows persistent financial distress marked by negative working capital and net liabilities over multiple years. Immediate focus on liquidity improvement, cost control, and revenue enhancement is needed to stabilize and restore financial health. The company's current financial condition warrants caution but can improve with targeted interventions.

SRJ ACCOUNTANCY LTD - Analysis Report

Company Number: 13880865

Analysis Date: 2025-07-20 12:48 UTC

Financial Health Assessment for SRJ ACCOUNTANCY LTD as of 31 January 2024

---

1. Financial Health Score: D

Explanation:
The company exhibits clear symptoms of financial distress, primarily due to sustained net liabilities and negative working capital over three consecutive years. While not immediately insolvent, these signs indicate vulnerability and an urgent need for financial intervention to restore health.

---

2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Fixed Assets	1,800	2,400	Minimal long-term investment; slight decline reflects limited capital expenditures or disposals.
Current Assets	151	248	Very low short-term resources; indicates poor liquidity to cover immediate obligations.
Current Liabilities	3,600	4,040	Debts due within one year; substantial relative to assets and cash available.
Net Current Assets (Working Capital)	-3,449	-3,792	Negative working capital; company has more short-term liabilities than assets, a critical warning.
Net Assets (Equity)	-1,649	-1,392	Negative net worth; liabilities exceed assets, indicating accumulated losses or capital erosion.
Shareholders' Funds	-1,649	-1,392	Matches net assets; owner’s equity is in deficit, reflecting financial strain.
Number of Employees	0	0	No employees; possibly a sole trader or minimal operational activity.

---

3. Diagnosis

SRJ ACCOUNTANCY LTD is showing chronic financial symptoms of distress:

• Negative Working Capital: The company’s current liabilities significantly exceed current assets. This means it may struggle to meet short-term obligations such as supplier invoices or taxes, akin to a patient with low blood pressure struggling to circulate resources effectively.

• Negative Net Assets: Persistent net liabilities over three years signal the company is operating "below par," with liabilities outweighing assets. This is comparable to an individual with a chronic deficiency in vital nutrients—unsustainable without corrective measures.

• Minimal Asset Base: The small fixed asset base and negligible current assets combined with no employees suggest the company operates with minimal operational infrastructure, potentially limiting revenue generation and growth capacity.

• No Audit Requirement: As a micro-entity, the company benefits from reduced reporting requirements, but this also means less financial scrutiny, which can mask underlying issues if not monitored carefully.

• Owner Control: Mrs Jishamol Joseph owns 75-100% shares and voting rights, centralizing control but also concentrating financial risk.

---

4. Recommendations

To improve financial wellness and avoid further deterioration, SRJ ACCOUNTANCY LTD should consider the following steps:

1. Improve Liquidity:

   • Inject additional cash or capital to bolster current assets and reduce negative working capital.
   • Renegotiate payment terms with creditors to extend liabilities beyond one year if possible, easing short-term cash flow pressures.

2. Cost Management:

   • Review overheads and operational costs to minimize cash burn, especially since there are no employees, focusing on essential expenditures.

3. Revenue Generation:

   • Explore avenues to increase revenue through client acquisition or service offerings aligned with bookkeeping activities.
   • Consider partnerships or outsourcing opportunities to enhance service capacity without large fixed costs.

4. Financial Monitoring and Reporting:

   • Maintain rigorous financial record-keeping despite micro-entity exemptions to catch early warning signs.
   • Possibly seek voluntary external financial advice or mentoring to navigate turnaround options.

5. Capital Restructuring:

   • If feasible, the owner could consider injecting further equity or restructuring existing debts to balance the balance sheet.

6. Contingency Planning:

   • Prepare for potential cash flow shortfalls by arranging overdraft facilities or short-term financing lines.

---

Medical Analogy Summary

SRJ ACCOUNTANCY LTD is currently in a state of financial distress, much like a patient with chronic nutrient deficiency and poor circulation. The "vital signs" indicate weak liquidity and capital erosion, requiring urgent intervention to restore balance and prevent potential insolvency "organ failure." Without prompt action, the prognosis may worsen, threatening the company's operational viability.

---