ADVANCED SECURITY LTD

Executive Summary

ADVANCED SECURITY LTD is a financially healthy micro-entity with no liabilities and positive net assets after its first year of operation. The company’s liquidity and solvency show no signs of distress, but its small scale and limited asset base suggest a cautious approach to growth and building financial reserves. Strengthening governance and preparing for expansion will be key to sustaining long-term financial wellness.

ADVANCED SECURITY LTD - Analysis Report

Company Number: 15054411

Analysis Date: 2025-07-20 13:00 UTC

Financial Health Assessment: ADVANCED SECURITY LTD (as at 31 August 2024)

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1. Financial Health Score: B

Explanation:
ADVANCED SECURITY LTD demonstrates a solid financial foundation for a newly incorporated micro-entity. The balance sheet reveals positive net assets and no current liabilities, indicating a healthy liquidity position. However, the very modest asset base and limited financial history (since incorporation in 2023) suggest there is room for growth and strengthening of financial buffers to reach an A-grade rating.

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2. Key Vital Signs

Metric	Value	Interpretation
Company Age	1 year	Very young company; financial track record is limited.
Fixed Assets	£2,500	Small investment in long-term assets, typical for micro-entities.
Current Assets	£1,500	Cash or near-cash assets available to meet short-term needs.
Current Liabilities	£0	No short-term debts; excellent liquidity position ("healthy cash flow").
Net Current Assets	£1,500	Positive working capital; company can cover short-term obligations comfortably.
Net Assets / Shareholders’ Funds	£4,000	Equates to the company's equity; shows net worth is positive and stable.
Employees	8	Small workforce; consistent with micro-entity category.
Ownership	Single owner with 75-100% control	Centralized control; decisions likely agile but dependent on one individual.

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3. Diagnosis: What the Financial Data Reveals

• Liquidity and Solvency: The company shows no current liabilities and positive net current assets, signaling no immediate financial distress or cash flow problems. This is akin to a patient with a strong pulse and stable blood pressure—no signs of acute financial illness.

• Capital Structure: Shareholders’ funds equal net assets, indicating no external debts or loans. This debt-free position reduces financial risk but may also indicate limited capital for expansion.

• Asset Base: Fixed assets are minimal (£2,500), suggesting the company operates with light physical resources, which is typical for service-oriented businesses like private security activities.

• Size and Scale: As a micro-entity with only one year of operation, the company is in its infancy. It has built a small but stable financial base. The absence of liabilities and positive net assets are good early indicators, but the company must continue to build reserves and scale operations for long-term resilience.

• Governance: The company has a single controlling individual with full voting rights and director roles, which allows for quick decision-making but also concentrates risk if key person issues arise.

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4. Recommendations: Specific Actions to Improve Financial Wellness

• Build Cash Reserves: While current liquidity is stable, increasing cash reserves will provide a buffer against unforeseen expenses and support operational growth.

• Monitor and Manage Growth: As the company grows, it should carefully manage working capital to avoid liquidity crunches. Investing in scalable assets or technology may improve efficiency.

• Diversify Leadership: Consider broadening the management team or introducing additional directors to reduce dependency on a single individual and enhance governance robustness.

• Prepare for Scaling: With 8 employees already, the company should establish clear financial controls and budgeting processes to monitor profitability and cash flow as it expands.

• Financial Reporting: Maintain timely and accurate filings with Companies House to avoid penalties and build credibility with stakeholders and potential investors.

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