NAFEASAN HOMES LTD

Executive Summary

NAFEASAN HOMES LTD demonstrates weak financial health as evidenced by continued negative net assets and a worsening liquidity position. The company’s reliance on director loans and insufficient working capital raises concerns about its ability to meet short-term obligations. Credit facilities are not recommended without significant improvement in cash flow and balance sheet strength.

NAFEASAN HOMES LTD - Analysis Report

Company Number: 13877081

Analysis Date: 2025-07-20 17:16 UTC

1. Credit Opinion: DECLINE
   NAFEASAN HOMES LTD presents significant credit risk due to its negative net assets and working capital deficit which have worsened over the reported periods. The company has accumulated losses reflected in shareholders' funds declining from -£6,267 (2023) to -£7,768 (2024). Current liabilities exceed current assets by £7,823 as of March 2024, indicating liquidity strain. Additionally, the company relies on interest-free director-related loans repayable on demand, which may not be sustainable. Given these financial weaknesses and the company's very recent incorporation (2022), the ability to service external debt or new credit facilities appears limited at this stage.

2. Financial Strength:
   The balance sheet shows very limited fixed assets (£155), negligible equity capital (£100), and persistent net liabilities (£7,668 deficit). The company’s negative net current assets position indicates a reliance on external short-term funding or creditor support to meet obligations. The shareholder funds are deeply negative, reflecting accumulated losses and no retained earnings. The financial trajectory shows deterioration in net assets and worsening liquidity, suggesting declining financial health.

3. Cash Flow Assessment:
   Cash on hand is low (£2,875) relative to current liabilities (£12,813), and debtors have reduced significantly from £10,073 to £2,115, adversely impacting working capital. The company depends heavily on director loans (total £10,218) which are unsecured and interest-free but repayable on demand, increasing refinancing risk. The absence of positive cash flow from operations and reliance on related party funding indicates weak liquidity and poor cash flow management. The company’s current assets are insufficient to cover short-term liabilities, suggesting potential cash flow difficulties in meeting creditor payments on time.

4. Monitoring Points:

• Track improvement or further deterioration in net current assets and shareholders’ funds.
• Monitor cash flow generation from operations and changes in debtor collections.
• Watch for any increases in external borrowing or director loan amounts and repayment terms.
• Review filings for evidence of business expansion or new revenue streams to improve profitability.
• Keep a close eye on any overdue payments or creditor disputes signaling financial distress.