NIRR ACCOUNTANCY SERVICES LTD.

Executive Summary

NIRR Accountancy Services Ltd. demonstrates modest equity growth but currently faces liquidity challenges due to a working capital deficit. While the company’s balance sheet shows positive net assets, the shortfall in current assets versus liabilities necessitates cautious credit extension. Conditional approval is recommended, contingent on improved liquidity management and compliance with statutory filings.

NIRR ACCOUNTANCY SERVICES LTD. - Analysis Report

Company Number: 13667781

Analysis Date: 2025-07-20 11:33 UTC

1. Credit Opinion: CONDITIONAL APPROVAL. NIRR Accountancy Services Ltd. is a micro-entity engaged in bookkeeping activities with a single director and shareholder who controls the business fully. The company shows a positive net asset position and improved equity, indicating some financial stability. However, current liabilities exceed current assets as of the latest year-end, resulting in a negative working capital position, which raises concerns about liquidity and short-term debt servicing. The overdue confirmation statement filing is a governance risk that should be rectified promptly. Approval is recommended with conditions requiring close monitoring of liquidity, timely filings, and confirmation of ability to meet short-term obligations.

2. Financial Strength: The balance sheet shows net assets of £5,193 at 31 October 2023, up from £3,457 the previous year, indicating growth and retained earnings accumulation. Fixed assets increased from £363 to £8,064, possibly reflecting investment in business equipment. However, current assets fell from £5,206 to £1,829, while current liabilities rose from £1,494 to £4,700, resulting in negative net current assets of £-2,871. This working capital deficit signals potential strain on the company's ability to cover short-term liabilities. The positive total assets less current liabilities (£5,193) supports a modestly strong equity position but masks liquidity concerns.

3. Cash Flow Assessment: The company’s liquidity is weak, with current liabilities significantly exceeding current assets. Negative working capital implies challenges in covering immediate debts without additional cash inflows or financing. The business appears to rely on equity injection or long-term funds to support operations. With only one employee and limited scale, cash flow volatility could be high. There is no information on cash or equivalents specifically, but given the low current assets, cash reserves are likely minimal. Close attention to cash flow forecasting and collection cycles is necessary.

4. Monitoring Points:

• Working capital trends and ability to reduce or manage current liabilities.
• Timely filing of statutory returns, including overdue confirmation statements, to avoid regulatory penalties.
• Cash flow statements or bank statements (if available) to verify liquidity improvements.
• Any changes in director or ownership structure that could affect control or financial stewardship.
• Profitability trends once profit and loss accounts are available to assess operational performance.
• External economic factors impacting bookkeeping demand and client payment patterns.