Financial Summary¶
Refreshed April 29, 2026 after new uploads to
JMS Inputs/: 2022-2024 compiled financial statements, 2023-2025 tax returns, 2024 and 2025 monthly P&Ls, Q1 2026 P&L, and Q1 2026 balance sheet.Important: the sources are not perfectly reconciled. The accountant-prepared compiled statements, federal tax returns, QuickBooks P&Ls, and monthly P&L exports use different bases/timing. Use the trend, liquidity, and cash-flow implications for diligence, but verify final numbers against the originals before bank/SBA submission.
Executive Read¶
JMS looks materially stronger after the new documents:
- 2026 is off to a very strong start. Q1 2026 QuickBooks P&L shows $1.52M revenue, $1.01M gross profit, and $849K net income.
- Q1 2026 already equals ~76% of full-year 2024 revenue and ~42% of the 2025 monthly P&L revenue total.
- The 2025 revenue step-up was real but lumpy. Monthly revenue ranged from $22.7K in Sep 2025 to $946.4K in Oct 2025.
- Cash conversion improved by Mar 31, 2026. Cash/bank increased to $726K, while A/R fell to $67K from the Dec 2025 balance sheet level of $305K.
- Tax-basis fixed assets are distorted by accelerated depreciation. Q1 2026 balance sheet shows negative net fixed assets because accumulated depreciation exceeds book fixed assets. This is an accounting/tax artifact, not an operational indication that equipment has no value.
- Tax return ordinary income is lower than QuickBooks operating income. 2025 federal tax ordinary business income is $585K, while the prior 2025 QuickBooks P&L page showed $799K net income and the monthly P&L workbook sums to $481K net income. Treat these as source differences that need reconciliation.
Revenue & Profitability Trend by Source¶
| Period / Source | Revenue / Gross Receipts | COGS | Gross Profit | Gross Margin | Net / Ordinary Income | Net Margin | Notes |
|---|---|---|---|---|---|---|---|
| 2022 compiled financial statements | $1,436,143 | $504,018 | $932,125 | 64.9% | $138,250 | 9.6% | Income tax basis compilation |
| 2023 compiled financial statements | $1,668,465 | $868,471 | $799,994 | 48.0% | $126,258 | 7.6% | Income tax basis compilation |
| 2023 federal tax return | $1,703,006 | $900,095 | $802,911 | 47.1% | $96,454 | 5.7% | Form 1120-S ordinary business income |
| 2024 compiled financial statements | $1,997,347 | $1,201,697 | $795,651 | 39.8% | $176,482 | 8.8% | Income tax basis compilation |
| 2024 federal tax return | $1,997,347 | $1,205,843 | $791,504 | 39.6% | $168,018 | 8.4% | Form 1120-S ordinary business income |
| 2025 monthly P&L workbook | $3,617,208 | $2,143,028 | $1,474,180 | 40.8% | $480,814 | 13.3% | Sum of monthly tabs, includes Dec depreciation expense |
| 2025 federal tax return | $3,707,280 | $2,269,256 | $1,438,024 | 38.8% | $585,209 | 15.8% | Form 1120-S ordinary business income; Section 179 shown separately |
| 2025 full-year P&L PDF | $3,892,993 | $2,274,248 | $1,618,745 | 41.6% | $799,168 | 20.5% | Prior QuickBooks PDF extraction |
| Q1 2026 P&L workbook | $1,522,053 | $516,413 | $1,005,640 | 66.1% | $849,046 | 55.8% | Jan-Mar 2026 only; likely timing/lumpiness |
Q1 2026 Acceleration¶
| Metric | Q1 2025 | Q1 2026 | Change |
|---|---|---|---|
| Revenue | $467,013 | $1,522,053 | +$1,055,041 / +226% |
| COGS | $351,693 | $516,413 | +$164,720 / +47% |
| Gross Profit | $115,320 | $1,005,640 | +$890,321 / +772% |
| Net Income | ($26,717) | $849,046 | +$875,762 |
Interpretation: Q1 2026 strongly supports the seller's claim that demand is continuing, not fading after 2025. The caveat is timing: JMS revenue is very lumpy month to month, so Q1 should not be blindly annualized.
Balance Sheet Snapshot¶
| Category | Dec 31, 2025 QB Balance Sheet | Mar 31, 2026 QB Balance Sheet | Change |
|---|---|---|---|
| Cash & Bank | $524,061 | $726,182 | +$202,121 |
| Accounts Receivable | $304,868 | $67,197 | ($237,671) |
| Total Current Assets | $830,049 | $794,499 | ($35,550) |
| Gross Fixed Assets | $1,133,123 | $1,122,505 | ($10,618) |
| Accumulated Depreciation | ($922,782) | ($1,246,438) | ($323,656) |
| Net Fixed Assets | $210,341 | ($103,435) | ($313,776) |
| Total Assets | $1,040,390 | $691,064 | ($349,326) |
| Accounts Payable | $154,648 | $146,053 | ($8,595) |
| Total Current Liabilities | $191,691 | $189,117 | ($2,574) |
| Long-Term Debt | $62,124 | $57,000 | ($5,124) |
| Total Liabilities | $253,815 | $246,117 | ($7,698) |
| Total Equity | $786,575 | $444,947 | ($341,628) |
Interpretation: Cash is improving and A/R is being collected. The drop in total assets/equity is primarily the accelerated depreciation/tax-basis fixed asset issue, not an operating deterioration.
Updated Key Ratios¶
| Ratio | Dec 31, 2025 | Mar 31, 2026 | Notes |
|---|---|---|---|
| Current Ratio | 4.3x | 4.2x | Very liquid both periods |
| Cash / Current Liabilities | 2.7x | 3.8x | Stronger by Q1 2026 |
| Debt-to-Equity | 0.32x | 0.55x | Q1 equity depressed by depreciation accounting |
| Q1 2026 Gross Margin | n/a | 66.1% | Likely timing/mix, should be tested against job-level margin |
| Q1 2026 Net Margin | n/a | 55.8% | Not safe to annualize without monthly detail after March |
Useful Diligence Takeaways¶
- Demand validation: Q1 2026 is the strongest new evidence in the file. It supports revenue sustainability and perhaps growth beyond 2025.
- Margin diligence is now more important: Q1 2026 margin is unusually high. Need job-level margin by major customer/work type to determine whether this is mix, timing of materials, billing milestone timing, or accounting classification.
- Source reconciliation needed: 2025 has at least three relevant views: monthly P&L workbook, full-year QuickBooks P&L PDF, and federal tax return. They do not tie exactly.
- Working capital looks manageable: A/R was high at Dec 2025 but substantially collected by Mar 2026.
- Equipment value should not rely on book value: tax-basis depreciation makes book fixed assets misleading; use equipment inventory/replacement value and physical inspection.
Open Financial Questions¶
| # | Question | Status / Update |
|---|---|---|
| 31 | Negative checking balance (-$95K) explanation | Resolved in prior notes |
| 32 | Personal expenses through the business | Resolved in prior notes |
| 33 | Current shop rate, last increase, market comparison | Resolved in prior notes |
| 34 | $25K continuing education expense | Resolved in prior notes |
| 35 | Two notes payable ($42K M&T + $20K Regional Dev Corp) | Resolved in prior notes |
| 36 | Margin by work type | Still open; more important after Q1 2026 margin spike |
| 36a | Repricing speed when material costs move | Still open |
| 36b | RFQ-to-award and award-to-cash timeline | Still open; Q1 cash collection looks positive |
| 36c | Unfunded pension obligations | Still open |
| 36d | Health insurance costs | Resolved in prior notes |
| New | Reconcile 2025 monthly P&L, 2025 full-year P&L PDF, and 2025 tax return | Open |
| New | Explain Q1 2026 gross margin and whether costs are complete/accrued | Open |
| New | Obtain April 2026 P&L and balance sheet to confirm Q1 trend continues | Open |