Company Number: 12992859

Analysis Date: 2025-07-20 14:27 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   IPSEC NETWORK IT CONSULTANCY LTD shows minimal net assets (£186 as of July 2024) and very tight working capital, indicating limited financial cushion. The company remains active and compliant with filing requirements, which is positive, but the sharp decline in cash and net current assets from prior years signals potential liquidity stress. Given the small scale and thin equity base, approval should be conditional on ongoing monitoring, possibly supported by personal guarantees or additional collateral if extending credit.

2. Financial Strength:
   The company is a micro entity with very modest net assets (£186). Shareholder funds have decreased from £718 in 2023 to £186 in 2024, reflecting erosion of retained earnings or operational losses. Current liabilities (£1,878) slightly exceed cash on hand (£2,064) but net current assets remain positive albeit very low (£186). No fixed assets or long-term investments are reported, highlighting dependence on short-term liquidity. Overall, the balance sheet is fragile with limited buffer against adverse events.

3. Cash Flow Assessment:
   Cash reserves have dropped significantly from £10,057 in 2023 to £2,064 in 2024, indicating tightening liquidity. Current liabilities have also reduced but remain close to cash levels, resulting in minimal working capital. The company’s ability to meet short-term obligations appears marginal, with a risk of cash flow squeeze if receivables or payables timing shifts. Absence of detailed profit and loss data limits deeper cash flow insight, but the trend suggests constrained operating cash flow.

4. Monitoring Points:

• Track monthly cash balances and working capital to detect further liquidity deterioration.
• Monitor timely settlement of trade creditors and tax liabilities, as these represent majority of current liabilities.
• Review future turnover and margin trends to assess ability to rebuild equity and cash buffers.
• Watch for any changes in director or shareholder control that could impact governance or financial support.
• Confirm no material overdue filings or adverse credit events.