NN TRADING LTD

Executive Summary

NN TRADING LTD holds substantial fixed assets but suffers from severe liquidity stress due to high current liabilities and minimal current assets. While the company remains solvent with positive net assets, its working capital position signals urgent need for improved cash flow management and debt restructuring. Immediate attention to liquidity and refinancing strategies will be critical to stabilizing financial health and supporting ongoing operations.

NN TRADING LTD - Analysis Report

Company Number: 12619158

Analysis Date: 2025-07-20 18:08 UTC

Financial Health Assessment Report for NN TRADING LTD

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1. Financial Health Score: C

Explanation:
NN TRADING LTD displays a mixed financial condition. While the company holds significant fixed assets indicating business scale and investment, it exhibits worrying signs in liquidity and working capital management. The company’s net current assets are deeply negative, showing symptoms of financial distress in meeting short-term obligations. However, net assets remain positive, suggesting underlying value in long-term assets. Overall, the business is stable but exhibits strain that requires close monitoring and corrective action.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Fixed Assets	£1,849,532	Strong investment in long-term assets, likely real estate given SIC codes; reflects business scale.
Current Assets	£8,082	Extremely low liquid and short-term assets, indicating weak immediate cash reserves.
Current Liabilities	£1,810,278	Very high short-term debts, creating a liquidity crunch – a critical symptom of financial strain.
Net Current Assets (Working Capital)	-£1,800,506	Negative working capital indicates the company may struggle to cover short-term debts with current assets.
Total Net Assets	£45,449	Positive but very low equity base relative to liabilities; suggests limited financial buffer.
Share Capital	£2	Nominal share capital; majority control held by Investments London Ltd and directors.
Average Employees	2	Small team, consistent with micro-entity status but may limit operational capacity.

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3. Diagnosis

Symptoms Analysis:

• The company’s large fixed assets suggest significant investments, consistent with its real estate management activities. However, the exorbitantly high current liabilities compared to minuscule current assets reveal a liquidity imbalance. This imbalance is akin to a patient with a solid skeleton but failing vital organs — the business infrastructure is substantial, but liquidity (cash flow) is critically impaired.
• Negative working capital is a red flag symptom indicating potential cash flow problems and challenges in meeting short-term liabilities without refinancing or asset liquidation.
• The net asset position is barely positive, indicating that long-term financial stability is fragile and vulnerable to external shocks or operational setbacks.
• The stable employee count and company status as micro-entity suggest limited operational scale; however, the financial structure points to reliance on external funding or owner injections to sustain operations.

Underlying Condition:
NN TRADING LTD appears to be a capital-intensive, asset-rich but cash-poor company. Its current liabilities are disproportionately high, possibly including loans or creditors related to property transactions or development costs. Without improved liquidity management or debt restructuring, the company risks insolvency symptoms despite holding valuable assets.

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4. Prognosis and Recommendations

Prognosis:
If current trends continue, liquidity pressure may worsen, potentially leading to delayed payments, creditor actions, or forced asset sales. However, the solid asset base offers a recovery avenue if efficiently leveraged or monetized. The company’s ongoing active status and no overdue filings indicate management is compliant and maintaining operational governance.

Recommendations:

1. Improve Liquidity Management:

   • Review and negotiate terms with creditors to extend short-term liabilities or restructure debt.
   • Accelerate collection of receivables or liquidate non-core current assets where possible.

2. Asset Utilization:

   • Consider monetizing part of the fixed asset base if it does not impair core operations, e.g., sale and leaseback arrangements in the real estate portfolio.
   • Explore refinancing options targeting longer-term debt to reduce immediate cash outflows.

3. Financial Planning and Forecasting:

   • Implement detailed cash flow forecasting to anticipate liquidity shortages and plan funding needs proactively.
   • Engage professional advisors if needed to optimize capital structure.

4. Operational Efficiency:

   • Maintain tight cost controls given small employee base and limited capital.
   • Explore growth opportunities cautiously, focusing on improving cash-generative operations.

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Medical Analogy Summary

NN TRADING LTD’s financial health resembles a patient with a strong skeletal frame (fixed assets) but compromised circulation (cash flow). The symptoms of liquidity distress require urgent treatment through debt management and cash flow improvement to avoid systemic failure. With timely intervention, the prognosis can turn positive, leveraging solid assets to restore financial wellness.

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