Company Number: 13558303

Analysis Date: 2025-07-20 18:34 UTC

Financial Health Assessment for NIMA DIBA 20 LIMITED

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1. Financial Health Score: D

Explanation:
The company’s financial statements reveal significant symptoms of distress, primarily negative net asset value and increasing current liabilities exceeding current assets. While the business remains operational, these signs indicate financial instability that requires urgent attention to avoid worsening liquidity and solvency issues.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	27,500	Stable investment in long-term assets; no change over recent years, indicating no expansion or asset disposal.
Current Assets	4,979	Very low liquid resources and short-term receivables; insufficient to cover immediate debts.
Current Liabilities	56,199	High short-term obligations; more than 10x the current assets, indicating liquidity strain.
Net Current Assets (Working Capital)	-51,220	Negative working capital ("unhealthy cash flow"); current liabilities far exceed current assets, risking inability to pay debts.
Total Assets Less Current Liabilities	-23,720	Negative value signals that total assets cannot cover short-term liabilities.
Creditors Due > 1 Year	26,543	Significant long-term debt further pressuring financial stability.
Net Assets (Shareholders’ Funds)	-50,263	Negative equity indicates insolvency from an accounting perspective; company owes more than it owns.
Average Employees	3	Small workforce consistent over recent years; no employment growth.

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3. Diagnosis

Symptoms of Financial Distress:

• Negative Net Assets: The company’s liabilities exceed its assets by £50,263 as at 31 August 2024. This is a critical symptom suggesting that from a balance sheet perspective, the company is technically insolvent.

• Severe Liquidity Strain: Current liabilities (£56,199) vastly exceed current assets (£4,979), resulting in a working capital deficit of £51,220. This is analogous to a patient whose “cash flow pulse” is dangerously weak, risking inability to meet short-term obligations such as supplier payments, wages, or taxes.

• Increasing Liabilities: Current liabilities have increased sharply from £31,966 in 2023 to £56,199 in 2024, indicating growing financial pressure, possibly due to delayed payments or increased borrowing to cover cash flow shortages.

• Stagnant Asset Base: Fixed assets have remained constant at £27,500 over the years, implying no recent capital investment or asset sales to improve liquidity.

• Consistent Employment Level: Maintaining 3 employees suggests the business has not expanded operations, which might limit revenue growth needed to alleviate financial stress.

Underlying Business Health:

The take-away food business (SIC 56103) typically depends on strong daily cash inflows to manage operational costs. The financial “symptoms” suggest that NIMA DIBA 20 LIMITED is struggling to maintain a healthy cash flow cycle, possibly due to operational inefficiencies, reduced sales, or high overheads. The negative equity position also implies accumulated losses or significant borrowings.

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4. Recommendations

To improve financial wellness and restore vitality, the business should consider the following interventions:

• Improve Liquidity:

  • Negotiate extended payment terms with creditors to reduce immediate cash outflows.
  • Accelerate receivables collection or increase cash sales to boost current assets.
  • Explore short-term financing options cautiously to cover urgent cash flow gaps while planning repayment.

• Cost Control and Efficiency:

  • Review operational expenses to identify and cut non-essential costs.
  • Optimize staffing and inventory management to reduce working capital needs.

• Asset Management:

  • Consider selling non-core fixed assets if possible to generate cash.
  • Avoid further fixed asset purchases until liquidity improves.

• Financial Restructuring:

  • Engage with financial advisors to restructure existing debt, potentially converting some liabilities into equity or renegotiating terms.

• Business Development:

  • Explore marketing or service improvements to increase sales volume and revenue.
  • Evaluate pricing strategies to improve margins without losing customers.

• Ongoing Monitoring:

  • Implement regular cash flow forecasting to detect future liquidity shortages early.
  • Maintain transparent communication with stakeholders about financial status and recovery plans.

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