Company Number: 14837953

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

1. Credit Opinion: APPROVE with caution
   R C ELECTRICAL AND SECURITY LTD is a newly incorporated private limited company (established May 2023) operating in the utility construction sector. The company’s first set of unaudited abridged accounts for the year ended May 2024 show a positive net asset position and healthy working capital. Although the company is in its infancy with a short trading history, the financials reflect prudent management with adequate liquidity. Given its strong net current assets and no indication of overdue filings or arrears, the company demonstrates a reasonable ability to meet short-term obligations. However, credit exposure should be moderate due to limited trading history and sector risks inherent in construction projects.

2. Financial Strength
   The balance sheet shows total net assets of £123,568 supported by tangible fixed assets of £9,016 and current assets of £178,933. The company has minimal current liabilities of £64,381, resulting in strong net current assets of £114,552, indicating a solid liquidity buffer. Shareholders’ funds equal net assets, reflecting no debt financing, which enhances financial stability. The low level of fixed assets is typical for a service-oriented construction firm. Overall, the balance sheet is healthy for a start-up and indicates sound capitalisation.

3. Cash Flow Assessment
   Cash at bank at £51,052 is a strong component of current assets, providing immediate liquidity to meet operational needs and short-term liabilities. Debtors balance of £127,881 suggests active invoicing and potential cash inflows, although timely collection performance should be monitored. The substantial net working capital surplus (£114,552) indicates good short-term financial flexibility. The absence of debt reduces pressure from interest or principal repayments, improving cash flow reliability. However, as a new business, ongoing cash flow monitoring is essential to ensure sustainable operations.

4. Monitoring Points

• Trade debtor ageing and collection efficiency to avoid cash flow stress.
• Progress on contract delivery and revenue recognition aligned to project milestones.
• Management of current liabilities to prevent supplier or creditor disputes.
• Expansion plans and related capital requirements that may affect liquidity.
• Any changes in directors or ownership that could impact governance or control.
• Sector-specific risks such as supply chain disruptions or regulatory changes impacting utility construction.