DIAMOND SOLUTION SECURITY LTD

Executive Summary

Diamond Solution Security Ltd is a newly incorporated micro-entity with very limited financial resources and a working capital deficit, posing liquidity risks. Conditional credit approval is recommended with tight monitoring of cash flow and liabilities. The company’s small capital base restricts its resilience to adverse financial events.

DIAMOND SOLUTION SECURITY LTD - Analysis Report

Company Number: 13891305

Analysis Date: 2025-07-29 16:06 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Diamond Solution Security Ltd is a micro-entity with limited financial history, incorporated in 2022. The company shows very modest net assets (£100) and minimal fixed assets, indicating a small capital base. The current liabilities slightly exceed current assets in the latest year, causing net current liabilities of £979, which raises liquidity concerns. However, the company remains active, with no overdue filings and a stable director structure. Given the limited operating scale and tight working capital, approval should be conditional upon close monitoring of cash flow and ensuring no significant increase in short-term liabilities.

2. Financial Strength:
   The balance sheet shows net assets of £100 for the year ending February 2024, down from £200 in the previous year, reflecting minimal capital reserves. Fixed assets are negligible (£1,439), and the company’s current assets (£7,175) are slightly less than current liabilities (£8,154), resulting in negative net current assets of £979. This weak liquidity position undermines financial resilience. The company’s small size and limited equity base reduce its capacity to absorb financial shocks or unexpected expenses.

3. Cash Flow Assessment:
   Liquidity appears constrained; current liabilities exceed current assets, suggesting potential strain in meeting short-term obligations. The working capital deficit implies reliance on timely collections or external financing to cover day-to-day expenses. With only one employee and minimal operational scale, cash flow volatility could be high. No information on profit or revenue trends is available, limiting the ability to fully assess cash flow generation capacity.

4. Monitoring Points:

• Monitor quarterly updates on working capital and current liabilities to detect any worsening liquidity.
• Track director changes and any related party transactions given the 75-100% ownership by the controlling director.
• Review upcoming filings for any significant changes in financial position or operational scale.
• Watch for any increase in debt levels or overdue supplier payments that could signal financial stress.