RED DOT SECURITY LIMITED

Executive Summary

Red Dot Security Limited has shown a marked improvement in its financial position with positive net assets and increased current assets as of late 2023. However, the company remains a micro-entity with a limited equity base and tight working capital, indicating modest financial strength and liquidity. Credit facilities may be considered on a conditional basis, subject to ongoing monitoring of asset quality and cash flow stability.

RED DOT SECURITY LIMITED - Analysis Report

Company Number: 13030101

Analysis Date: 2025-07-29 13:43 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Red Dot Security Limited shows a recent and notable improvement in financial position as of its latest accounts dated 30 November 2023. The company moved from net current liabilities and negative net assets in prior years to a small positive net asset position of £2,997 and positive net current assets. However, the absolute value remains modest, reflecting a micro-entity scale operation with limited capital base (£1 share capital). The business has no fixed assets and no employees, indicating a very lean structure. The improvement in current assets from under £600 to over £200,000 is unusual and warrants further enquiry to confirm the nature and sustainability of these assets (e.g., cash, receivables). Given the limited historical financial data and small equity base, credit should be extended cautiously, preferably with short-term facilities and regular monitoring of cash flow and receivables.

2. Financial Strength:
   The balance sheet is extremely light, with no fixed assets and minimal equity. The company has demonstrated turnaround from a negative net asset position (-£196 in 2022) to a positive one (£2,997 in 2023). Current assets increased substantially, which improves liquidity, but current liabilities also rose significantly, almost matching current assets. The net current asset margin is thin (£2,997), indicating low buffer against unexpected liabilities or downturns. Shareholders funds remain very low, so the company is vulnerable to any adverse financial shocks. Overall, financial strength is weak but improving.

3. Cash Flow Assessment:
   The large increase in current assets likely reflects cash or near-cash items, implying improved liquidity. However, the matching increase in current liabilities suggests working capital is tight. Net current assets of just under £3,000 provide little cushion. No employees are reported, so operating cash outflows are likely low. Without detailed cash flow statements, it is difficult to fully assess operational cash generation, but the accounts imply a start-up or early stage company with limited operating history and cash flow volatility risk. Working capital management should be closely monitored.

4. Monitoring Points:

• Confirm the composition and collectability of current assets to ensure liquidity is genuine and sustainable.
• Monitor current liabilities closely to avoid liquidity stress and ensure timely payment of creditors.
• Track any changes in share capital or equity injections to understand support from owners.
• Watch for future filings and accounts to confirm continued financial improvement or identify any deterioration.
• Assess trading performance and cash flows through management accounts if available, as micro-entity accounts contain limited detail.