NISMA CONSULTING LTD

Executive Summary

NISMA CONSULTING LTD demonstrates significant financial weakness with negative net assets and persistent liquidity issues, indicating a high risk for credit facilities. The company’s current financial structure and cash flow position do not support additional borrowing or trade credit without substantial improvement. Close monitoring of balance sheet repair and cash flow generation is essential before reconsidering credit exposure.

NISMA CONSULTING LTD - Analysis Report

Company Number: 12388691

Analysis Date: 2025-07-20 18:56 UTC

1. Credit Opinion: DECLINE
   NISMA CONSULTING LTD currently exhibits weak financial health, with negative net assets and shareholders’ funds (£-9,237 as of 31 January 2024) indicating insolvency on a balance sheet basis. The company has consistent net current liabilities and a significant long-term creditor balance (£50,000) that it appears unable to cover with current assets. The absence of employees and reliance on director management raises concerns about operational scale and resilience. These factors collectively suggest an elevated credit risk and limited capacity to service additional debt or credit facilities without a substantial improvement in financial position.

2. Financial Strength:
   The company’s balance sheet shows fixed assets of approximately £50k, which have remained stable over the past two years, but current assets are negative (£-7,351) and current liabilities stand at £50,000 plus accruals. The net liabilities position worsened from £-8,230 in 2023 to £-9,237 in 2024, reflecting deteriorating equity. This indicates the company is highly leveraged and dependent on external creditors. The lack of positive working capital and negative net assets are clear signs of financial distress. The company remains a micro entity with minimal capital (£100 share capital) and no employees, limiting operational flexibility.

3. Cash Flow Assessment:
   Negative current assets and net current liabilities indicate liquidity challenges. The company’s inability to generate positive working capital suggests cash flow constraints that may impair its ability to meet short-term obligations promptly. There is no evidence of cash reserves or positive operating cash flow from the provided data. Without detailed cash flow statements, it is reasonable to infer that the firm’s cash flow position is weak, making it vulnerable to any unexpected expenses or revenue shortfalls.

4. Monitoring Points:

• Monitor updates to net asset position and whether shareholders’ funds improve or continue to deteriorate.
• Track any changes in current liabilities and creditor balances, especially the £50,000 long-term creditor exposure.
• Review liquidity ratios and cash flow statements when available to assess ability to cover short-term debts.
• Watch for changes in operational scale such as hiring employees or revenue growth that may improve financial stability.
• Assess director conduct and company filings for any indications of restructuring, refinancing, or insolvency proceedings.