NIPALA PROPERTY DEVELOPMENT LTD

Executive Summary

Nipala Property Development Ltd operates in property letting with a very weak financial position marked by negative equity and significant short-term liquidity deficiencies. The company’s reliance on creditor funding and lack of disclosed capital support present high credit risk. Without evidence of improved liquidity or capital structure, credit facilities cannot be recommended at this time.

NIPALA PROPERTY DEVELOPMENT LTD - Analysis Report

Company Number: 14157102

Analysis Date: 2025-07-29 19:50 UTC

1. Credit Opinion: DECLINE
   Nipala Property Development Ltd shows significant financial stress with negative shareholders’ funds of £26,302 at the latest year-end and substantial long-term creditors (£405,221) exceeding fixed assets (£675,221) and current assets (£7,654). The company’s net current liabilities of £295,162 indicate poor short-term liquidity and an inability to cover immediate obligations. The financial position suggests a reliance on external financing or director loans (not disclosed), raising concerns about repayment capacity and financial resilience. Given these factors and the company’s very recent establishment (2022), the credit risk is high and does not support approval for credit facilities at this stage.

2. Financial Strength:
   The balance sheet reveals a weak equity base and negative net assets. Fixed assets are significant (£675k), likely property-related given the SIC code, but are heavily leveraged with creditors exceeding these assets combined with current liabilities. The negative working capital position (net current liabilities of almost £300k) highlights strained operational liquidity. The lack of disclosed director loans or other capital injections clouds the transparency of financial stewardship. Overall, the company’s financial structure is fragile with high gearing and minimal buffer to absorb downturns or unexpected expenses.

3. Cash Flow Assessment:
   Current assets of just £7,654 versus current liabilities of £302,816 indicate acute liquidity constraints. The negative net current assets suggest that the company may struggle to meet short-term liabilities as they fall due. No cash flow statements are provided, but given the micro-entity status and negative working capital, internal cash generation is likely insufficient. The absence of disclosed director loan accounts or other external support details limits confidence in liquidity management. This weak cash flow profile poses a significant repayment risk.

4. Monitoring Points:

• Monitor changes in net current assets and liquidity ratios closely.
• Watch for improvements in shareholders’ funds and reduction in creditor balances.
• Track filing of director loan disclosures or capital injections that may improve solvency.
• Keep an eye on timely filing of accounts and confirmation statements as a proxy for management quality and compliance.
• Observe any changes in operational scale or business model that affect cash flows or asset base.