NYANEMS LTD

Executive Summary

Nyanems Ltd is currently in a weak financial position with negative net assets and significant liquidity constraints, evidenced by negative working capital and zero cash reserves. Management's decision to pay dividends despite losses raises concerns on financial stewardship. Given these factors, credit facilities are not recommended without substantial improvement in liquidity and equity.

NYANEMS LTD - Analysis Report

Company Number: 13002232

Analysis Date: 2025-07-20 18:23 UTC

1. Credit Opinion: DECLINE
   Nyanems Ltd demonstrates a precarious financial position with negative net assets and shareholders' funds of £-337 as of November 2023, deteriorating from positive equity in prior years. The company shows weak liquidity evidenced by net current liabilities of £807 and zero cash balance, indicating inability to meet short-term obligations reliably. The presence of creditors falling due after one year (£539) further stresses liabilities. The company's negative retained earnings and dividend payment (£1,300) during a loss-making period raise concerns about management's financial prudence. Without clear evidence of improving cash flows or capital injection, the credit risk is high, warranting a decline or at best conditional approval with stringent covenants and close monitoring.

2. Financial Strength:
   The balance sheet reflects a declining trend in financial health. From net assets of £900 in 2022, the company has slid to negative net assets of £-337 in 2023. Fixed assets are minimal (£1,009) and largely computer equipment, offering limited collateral value. Current liabilities exceed current assets by a significant margin, creating negative working capital. The company has a small share capital (£1) and has taken on long-term creditors. This weak capital structure and declining equity base reduce financial stability and resilience to economic shocks.

3. Cash Flow Assessment:
   Nyanems Ltd has no cash on hand as at the latest year-end, and debtors are minimal (£285), insufficient to cover short-term liabilities (£1,092). The negative net current assets position indicates liquidity stress and potential difficulty in servicing debts and operational expenses. The lack of cash reserves and reliance on creditors suggest poor working capital management. Historical cash balances have diminished, implying cash flow challenges. The dividend payment of £1,300 in a loss-making year is a negative indicator of cash flow prioritization.

4. Monitoring Points:

• Liquidity ratios, especially current ratio and quick ratio, to detect cash flow improvements or further deterioration.
• Timely payment of current liabilities and any further borrowings or capital injections.
• Changes in net assets and shareholders’ funds to assess recovery or continued decline.
• Director conduct and any restructuring plans or financial support commitments.
• Turnover and profitability trends in subsequent accounts to evaluate business viability.