Company Number: 13453422

Analysis Date: 2025-07-20 17:36 UTC

1. Credit Opinion: APPROVE with caution. RECSO Ltd is a micro private limited company operating in electrical installation with a short trading history since 2021. The company maintains positive net current assets and shareholders' funds, indicating it can meet short-term liabilities. However, there is a notable decline in net assets and working capital in the latest year, suggesting some financial pressure or reduced liquidity. Directors have significant control and appear engaged in managing director advances, which may indicate close financial oversight but also reliance on related-party funding. Overall, the company demonstrates the capacity to service credit but should be monitored for any further erosion in working capital.

2. Financial Strength: The balance sheet reflects a micro-entity with fixed assets under £1k and current assets primarily comprising cash, receivables or short-term assets. Shareholders' funds have declined from £90k at incorporation to £27.5k in 2024, driven by a reduction in net current assets from £86k to £27k over the same period. Current liabilities have increased in 2024 to £39.5k, tightening liquidity. The decline in net assets suggests reduced retained profits or possible losses, although the company remains solvent. The small asset base limits collateral value for secured lending.

3. Cash Flow Assessment: Net current assets remain positive at £27k, indicating liquidity to cover short-term obligations. However, the drop from £59k in 2023 to £27k in 2024 signals weakening working capital. The accounts note director advances with repayments during the year, implying some internal financing to support operations. No audit is required, and the company filed on time, indicating compliance discipline. Cash flow appears adequate but potentially vulnerable to operational disruptions or unexpected expenses given the magnitude of working capital erosion.

4. Monitoring Points:

• Track monthly cash flow and working capital trends to detect further liquidity tightening.
• Review subsequent trading results once available to confirm if the decline in net assets stabilizes or reverses.
• Monitor director advances and repayments to ensure related-party transactions do not mask operational cash flow issues.
• Watch for any overdue filings or changes in company status that could indicate financial distress.
• Assess any increase in current liabilities that might pressure liquidity or ability to meet credit terms.