Company Number: 13121101

Analysis Date: 2025-07-20 13:30 UTC

1. Credit Opinion: DECLINE
   NRF Financial Limited exhibits a concerning financial position as of the latest accounts dated 31 March 2024. The company has moved from a modestly positive net asset position (£683) in 2023 to a significant net deficit of £2,955 in 2024. Negative net current assets (£3,848) indicate potential liquidity issues, and the company’s shareholders’ funds have turned negative, which signals erosion of capital and raises doubts over its ability to meet short-term obligations. The director’s advances to the company have increased substantially, suggesting reliance on related party funding to sustain operations. Given the lack of audit, limited financial disclosures, and the negative equity, the company does not currently demonstrate a strong capability to service debt or honor commercial commitments. Therefore, approval for credit facilities is not recommended.

2. Financial Strength:
   The balance sheet shows tangible fixed assets of £893 (down from £1,199), minimal cash balances (£1,745), and substantial debtors (£7,358). However, current liabilities exceed current assets, resulting in net current liabilities of £3,848. The sharp deterioration from prior year net current liabilities of £516 and positive net assets to a net deficit position reflects weakening financial strength. The company’s capital base is eroded with shareholders’ funds turning negative (£-2,956). This indicates accumulated losses or undisclosed liabilities eroding equity, undermining long-term solvency.

3. Cash Flow Assessment:
   Cash on hand has dropped dramatically from £9,940 in 2023 to £1,745 in 2024, indicating potential cash flow stress. Increasing debtor balances and negative working capital suggest that the company may face difficulties converting receivables into cash quickly enough to cover liabilities due within the year. The significant related party director advances (£7,286) imply the company depends on director funding to maintain liquidity. The absence of a profit and loss statement limits visibility on operational cash generation, but the working capital trend and cash depletion raise concerns about short-term liquidity and operational cash flow sustainability.

4. Monitoring Points:

• Track quarterly debtor collections and aging to assess cash conversion efficiency.
• Monitor changes in current liabilities and any new short-term borrowings or director advances.
• Watch for improvements in cash balances and net current assets to gauge liquidity recovery.
• Review subsequent accounts and confirmation statements to confirm ongoing compliance and operational status.
• Evaluate any shifts in ownership or director involvement that may impact financial stewardship.