RED DOT COMMUNICATIONS LTD

Executive Summary

Red Dot Communications Ltd shows a stable financial position with positive net assets and working capital, suitable for its micro-entity scale. The company’s liquidity and balance sheet strength support its ability to service debt and meet obligations. Ongoing monitoring should focus on liquidity trends and management continuity given its small operational size.

RED DOT COMMUNICATIONS LTD - Analysis Report

Company Number: 13164154

Analysis Date: 2025-07-29 20:51 UTC

1. Credit Opinion: APPROVE
   Red Dot Communications Ltd demonstrates a stable and positive financial position for a micro-entity. The company shows a solid net asset base and positive working capital, indicating an ability to meet short-term obligations. The director’s consistent management and absence of overdue filings or adverse legal status support creditworthiness. Given its micro size and limited employee base, the business risk is moderate but manageable with current financial resources.

2. Financial Strength:
   The balance sheet as of 31 January 2024 reveals net assets of £33,875, up slightly from £32,564 the previous year, reflecting modest growth. Fixed assets are minimal (£814), consistent with a service-oriented business classified under SIC 82990 (Other business support service activities). Current assets increased by approximately £14k to £89,019, while current liabilities rose by about £13.5k to £55,958, resulting in net current assets (working capital) of £33,061. The company’s equity is entirely retained earnings and capital, with no indication of debt beyond current liabilities.

3. Cash Flow Assessment:
   Working capital remains positive and stable, indicating sufficient liquidity to cover short-term liabilities. The increase in current assets suggests good cash or receivables management, with no signs of liquidity stress. The absence of long-term borrowings or external debt reduces financial risk. However, as a micro entity with only one employee (the director), cash flow is likely closely tied to limited operational scale and may be sensitive to client payment delays or economic fluctuations.

4. Monitoring Points:

• Continued monitoring of current liabilities relative to current assets to ensure liquidity remains stable.
• Watch for any increase in liabilities or reduction in net assets that could signal financial strain.
• Assess the impact of any growth initiatives or changes in business activity on working capital needs.
• Monitor filing compliance and director conduct to avoid regulatory or operational disruptions.
• Given the company’s small scale, the dependency on the sole director’s management performance is a key risk factor.