NPA PROPERTIES LTD

Executive Summary

NPA PROPERTIES LTD shows a solid asset base with growing equity, driven by investment property holdings. However, minimal working capital and high long-term liabilities indicate some liquidity strain and financial risk. Strengthening cash reserves and carefully managing debt will be key to sustaining financial health and supporting future growth.

NPA PROPERTIES LTD - Analysis Report

Company Number: 12917531

Analysis Date: 2025-07-29 16:04 UTC

Financial Health Assessment of NPA PROPERTIES LTD (as of 31 October 2024)

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1. Financial Health Score: B

Explanation:
NPA PROPERTIES LTD demonstrates a generally solid financial position with net assets growing steadily over recent years, signaling overall growth and capital accumulation. However, the company carries a significant level of long-term liabilities relative to its current assets, which poses some liquidity risk. The healthy increase in fixed assets (investment property) and net assets is a positive sign, but the very tight working capital and high long-term creditor balances require cautious monitoring.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	1,205,621	Strong asset base in investment property; reflects growth from prior years. Stable and appreciating asset class.
Current Assets	12,245	Very low current assets, indicating limited liquid resources for day-to-day operations.
Current Liabilities	9,345	Relatively low short-term debt, manageable against current assets.
Net Current Assets (Working Capital)	2,900	Positive but minimal working capital, indicating a "fragile cash flow" situation — the company has just enough short-term resources to cover immediate liabilities.
Long-Term Liabilities	1,101,812	High long-term debt, possibly mortgage or loans against property; indicates leverage to finance asset acquisition.
Net Assets (Equity)	106,709	Positive net worth reflecting accumulated retained earnings; improving year-on-year.
Share Capital	3.00	Minimal share capital, typical for a micro-entity.

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3. Diagnosis

• Asset Quality: The company’s fixed assets, primarily investment properties, are appreciating and constitute the core of the business. This "healthy backbone" of tangible assets supports long-term stability and potential for capital gains.

• Liquidity: The "symptom of distress" here is the very low current assets and minimal net current assets, which means the company has limited liquid resources to manage short-term obligations or unexpected expenses. This could constrain operational flexibility.

• Leverage: The company is highly leveraged with long-term liabilities nearly equal to the value of fixed assets. While such leverage is common in property businesses, it introduces financial risk, especially if property values decline or income streams are disrupted.

• Profitability & Capital Growth: The steady increase in net assets from £8,365 in 2020 to £106,709 in 2024 suggests retained earnings or revaluation gains, indicating a positive "recovery and growth" trend.

• Operational Activity: No employees besides directors, implying a lean management structure typical of micro-entities in property management or investment.

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4. Recommendations

1. Improve Liquidity Management:
   Enhance cash and short-term asset reserves to avoid "cash flow anemia." Consider negotiating better payment terms or refinancing short-term liabilities to improve working capital.

2. Monitor Debt Levels:
   Maintain vigilance on long-term debt servicing capacity. Explore refinancing options to secure lower interest rates or longer terms to reduce pressure on cash flow.

3. Asset Valuation and Utilization:
   Regularly review property valuations and consider strategic asset disposals or development to unlock equity if liquidity issues intensify.

4. Financial Planning:
   Implement detailed cash flow forecasting to anticipate funding needs and avoid short-term liquidity crunches.

5. Contingency Planning:
   Prepare for potential market downturns in real estate, as high leverage increases vulnerability to property value fluctuations.

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