RUSSELL SECURITY AND ELECTRICAL LTD

Executive Summary

Russell Security and Electrical Ltd is a micro-entity showing early-stage financial instability with a working capital shortfall despite marginally positive net assets. Credit approval is conditional, emphasizing the need for close monitoring of liquidity and operational cash flows. The company’s small scale and director-centric control structure warrant cautious credit exposure until financial robustness improves.

RUSSELL SECURITY AND ELECTRICAL LTD - Analysis Report

Company Number: SC717277

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

1. Credit Opinion: CONDITIONAL APPROVAL
   Russell Security and Electrical Ltd is a micro-entity with limited trading history, incorporated in late 2021. The company shows a marginally positive net asset position as of 2023 year-end (£54), improving from a negative net asset position in prior years. However, it exhibits a significant net current liability of £14,525 in 2023, indicating short-term liquidity pressures. The director is also the sole significant controller, which concentrates operational and financial risks. Given these factors, credit approval is conditional on close monitoring of cash flow and capital structure improvements.

2. Financial Strength:
   The balance sheet reveals a small fixed asset base (£15,299) and very limited current assets (£2,603) against current liabilities of £17,128 as of December 2023. The net current liabilities position indicates working capital deficiency, posing potential challenges in meeting short-term obligations. The slight improvement to a positive net asset position (£54) is encouraging but remains minimal, indicating a fragile equity base. The company’s micro classification and small scale limit its financial resilience.

3. Cash Flow Assessment:
   Current assets are predominantly low, and there is a notable increase in current liabilities from £4,683 in 2022 to £17,128 in 2023, worsening liquidity. The negative net working capital of £14,525 suggests reliance on external finance or director support to fund operations. Absence of audit and limited disclosure restricts detailed cash flow analysis, but the working capital deficit signals potential stress in meeting short-term commitments without additional funding or operational cash inflows.

4. Monitoring Points:

• Track quarterly cash flow and working capital position to ensure timely servicing of liabilities.
• Monitor account receivables and payables turnover to detect any collection or payment delays.
• Watch for any significant changes in fixed assets that may impact liquidity or leverage.
• Review director loans or related party transactions that might be masking liquidity issues.
• Observe filing compliance and any changes in directorship or ownership that could affect governance.