SECURITY LAYER LTD

Executive Summary

SECURITY LAYER LTD shows signs of financial stress, with negative net assets and poor liquidity indicating a fragile financial position. Immediate actions to improve cash flow and strengthen equity are essential to avoid worsening distress. Strategic cost management and capital support will be crucial for stabilizing the company’s financial health.

SECURITY LAYER LTD - Analysis Report

Company Number: 13316249

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

Financial Health Assessment Report for SECURITY LAYER LTD

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1. Financial Health Score: D

Explanation:
The company exhibits several warning signs including persistent negative net assets (shareholders' funds), very minimal current assets, and relatively high current liabilities compared to assets. While not insolvent, the financial condition indicates distress akin to a patient with chronic symptoms that require urgent attention to avoid further deterioration.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Fixed Assets	£0	No long-term investments or capital assets; indicates minimal physical or intangible asset base.
Current Assets	£5	Extremely low liquid resources available to cover short-term obligations; cash starvation.
Current Liabilities	£248	Short-term debts significantly exceed current assets; liquidity risk present.
Net Current Assets	-£243	Negative working capital, indicating inability to meet immediate debts without external help.
Net Assets (Shareholders' Funds)	-£243	Negative equity shows accumulated losses or creditor claims exceeding assets—symptom of distress.
Employees	0	No staff; possibly minimal or no operational activity.
Share Capital	£1.00	Minimal capital injection; limited financial backing from shareholders.

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3. Diagnosis

SECURITY LAYER LTD is akin to a patient with a fragile financial constitution. The company is operating with negligible tangible or liquid resources and is burdened with a level of current liabilities that far exceeds its available assets. The negative net assets position signals that the company’s liabilities outweigh its assets, commonly termed "balance sheet insolvency," although this does not necessarily mean immediate insolvency but does indicate financial weakness.

The absence of employees suggests the company is either dormant operationally or heavily reliant on external contractors or directors without payroll commitments. The micro-entity size and minimal capital base limit flexibility and resilience to shocks.

The negative net current assets highlight liquidity constraints—this is the financial equivalent of "poor circulation," where the company lacks the cash flow necessary for day-to-day operations, potentially leading to operational stagnation.

Given the company’s incorporation date in 2021 and consistent negative net assets in recent filings, it appears the business has not yet achieved positive cash flow or profitability, suggesting ongoing financial distress or a business model under strain.

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4. Recommendations

• Improve Liquidity: Seek to increase current assets by securing additional working capital injections or negotiating longer payment terms with creditors. This is like administering fluids to improve circulation in a patient.

• Capital Injection: Consider a capital increase or shareholder loan to shore up equity and improve net assets. This infusion acts like a transfusion to restore vital strength.

• Cost Restructuring: Review and reduce overheads and liabilities where possible. For a company with zero employees, focus on reducing external costs or renegotiating contracts.

• Operational Review: Assess business activities to determine if current operations are sustainable or if pivoting strategy, scaling down, or winding down is advisable.

• Financial Monitoring: Implement tighter cash flow management and regular financial health check-ups to monitor improvements or early signs of further distress.

• Seek Professional Advice: Engage financial advisors or insolvency practitioners proactively if cash flow difficulties intensify, to avoid sudden financial collapse.

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