NRZ DEVELOPMENTS LIMITED

Executive Summary

NRZ Developments Limited demonstrates stable financial health with positive working capital and growing equity, but the very low cash balance signals potential liquidity challenges. Enhancing cash flow management and diversifying assets are key steps to improve financial resilience. Overall, the company is financially sound but should monitor cash closely to maintain operational flexibility.

NRZ DEVELOPMENTS LIMITED - Analysis Report

Company Number: 12586878

Analysis Date: 2025-07-29 16:36 UTC

Financial Health Assessment of NRZ DEVELOPMENTS LIMITED

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1. Financial Health Score: B

Explanation:
NRZ Developments Limited exhibits generally stable financial indicators with positive net current assets and shareholders’ funds growing steadily year-on-year. The company maintains a healthy buffer of working capital, which is a key vital sign of operational liquidity. However, the very low cash balance and the concentration of current assets primarily in debtors (amounts owed to the company) present some liquidity risk. The absence of fixed assets and reliance on receivables as primary assets also suggest limited asset diversification. Overall, the company is financially sound but has some mild symptoms that warrant close monitoring and improvement.

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2. Key Vital Signs

Metric	2024 (£)	Interpretation
Current Assets	31,086	Moderate level mainly from debtors, indicating credit sales.
Cash at Bank	87	Critically low cash balance, showing tight immediate liquidity.
Debtors	30,999	High proportion of current assets; reliance on collections.
Current Liabilities	17,663	Obligations due within a year, manageable relative to assets.
Net Current Assets	13,423	Positive working capital, a sign of short-term financial health.
Shareholders’ Funds	13,423	Positive and increasing equity, indicating retained profitability or capital injection.
Turnover / Profit Data	Not disclosed	Lack of profit/loss figures limits detailed profitability analysis.

Interpretation:

• The “healthy cash flow” equivalent here is the positive net current assets, reflecting the company’s ability to cover short-term obligations with current assets.
• The “symptoms of distress” include the very low cash reserves (£87), which is borderline and could affect the ability to meet immediate payments or unexpected expenses.
• The company’s assets are largely tied up in debtors (accounts receivable), suggesting it may be extending credit terms or facing slower payments from clients, which can strain liquidity.

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3. Diagnosis

NRZ Developments Limited is in a stable but cautious condition:

• The company has built up positive working capital and shareholders’ funds steadily over the last few years, which is a good sign of financial resilience.
• The balance sheet shows no fixed assets, implying this company operates primarily as a service or project development firm without significant capital investment in property or equipment.
• Reliance on debtors as the main current asset signals a need for diligent credit control and cash collection processes. Slow debtor turnover could lead to liquidity crunches despite apparent asset strength.
• The extremely low cash balance is a red flag in terms of immediate liquidity and operational cash flow management, potentially risking payment delays or inability to seize short-term opportunities.
• No audit requirement and absence of profit/loss data means transparency into profitability and operational efficiency is limited; this restricts deeper diagnosis of business health.
• The director (Mr Nasser Hakim) holds full control, which can be positive for quick decision-making but also concentrates risk.

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4. Recommendations

To improve financial wellness and reduce risk, NRZ Developments Limited should consider:

• Improve Cash Reserves: Enhance cash flow management to maintain a buffer of readily available cash. Consider negotiating payment terms or improving invoicing cycles to reduce debtor days and increase liquidity.
• Diversify Asset Base: Explore investment in fixed assets or other tangible resources to build a more balanced asset portfolio, reducing overreliance on receivables.
• Financial Reporting Transparency: Provide profit and loss statements and consider voluntary audits to improve stakeholder confidence and enable better internal decision-making.
• Credit Control Policies: Strengthen credit checks and debtor follow-up procedures to expedite collections and reduce risk of bad debts.
• Contingency Planning: Develop financial contingency plans to manage unexpected expenses or downturns given the narrow cash position.
• Monitor Liabilities: Keep current liabilities under close review to avoid liquidity strain from timing mismatches.

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Medical Analogy Summary

Think of NRZ Developments as a patient showing a generally good pulse and blood pressure (positive net current assets and shareholder equity), but with low blood sugar (cash) that could cause fainting spells (liquidity issues) if not addressed. Strengthening the patient’s diet (cash flow) and muscle tone (asset diversification) will help sustain long-term health and resilience.

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