SHK NETWORK SECURITY LIMITED

Executive Summary

SHK NETWORK SECURITY LIMITED exhibits a generally stable financial condition with positive net assets and healthy working capital, indicating good short-term financial health. However, a noticeable decline in fixed and net assets highlights the need for careful monitoring and strategic management to sustain long-term viability. Proactive asset management and liquidity oversight are recommended to maintain the company's financial wellness.

SHK NETWORK SECURITY LIMITED - Analysis Report

Company Number: 13281900

Analysis Date: 2025-07-20 19:05 UTC

Financial Health Assessment for SHK NETWORK SECURITY LIMITED

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1. Financial Health Score: B

Explanation:
The company demonstrates generally sound financial health with a positive net asset position and stable working capital. However, the slight decline in net assets and fixed assets over the latest year suggests some early symptoms of financial strain or asset utilization changes, though no critical distress signs are evident. Given the company’s micro-entity status and limited financial complexity, a "B" grade reflects a stable but cautiously monitored outlook.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Fixed Assets	384	1,931	Significant reduction; may indicate asset sales or write-downs.
Current Assets	33,697	35,239	Slight decrease but still sufficient for short-term obligations.
Current Liabilities	17,766	16,566	Small increase; manageable but should be monitored.
Net Current Assets (Working Capital)	15,931	18,673	Healthy positive working capital, though reduced.
Net Assets (Shareholders’ Funds)	16,315	20,604	Positive net worth but declining; caution advised.
Share Capital	1	1	Minimal share capital typical for micro-entities.

Interpretation:

• Working Capital: The company maintains a "healthy cash flow" buffer, with current assets comfortably exceeding current liabilities by nearly £16k. This suggests the company can meet short-term debts and operational needs without liquidity stress.
• Net Assets: Positive net assets indicate solvency and a stable equity base. However, the decline from £20.6k to £16.3k over one year may be a "symptom of distress" or strategic downsizing.
• Fixed Assets: The steep drop in fixed assets from £1.9k to £384 signals potential disposal or depreciation of long-term assets. This could be a strategic decision or a reflection of asset obsolescence.
• Liabilities: The moderate increase in current liabilities calls for careful management to avoid tightening liquidity.

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3. Diagnosis

SHK NETWORK SECURITY LIMITED is currently in a stable financial condition with positive net assets and sufficient working capital, indicating a "healthy" financial pulse. The company’s micro-entity status and absence of employees suggest a lean operation, likely owner-managed. The reduction in fixed assets and net assets over the year are early "symptoms" that warrant monitoring, as they may point to changes in operational strategy, asset base, or profitability pressures.

No overdue filings or legal distress markers are present, and the company remains active with a clear ownership and control structure dominated by a single director/shareholder. The company’s focus on IT consultancy aligns with the SIC code and typical low fixed-asset intensity business model.

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4. Recommendations

• Monitor Asset Utilization: Investigate the reasons behind the significant decline in fixed assets. If due to disposals, ensure proceeds are reinvested or used to strengthen liquidity. If due to impairment, review asset valuation and future capital expenditure plans.
• Manage Working Capital: Although currently healthy, the drop in net current assets suggests keeping a close eye on receivables and payables cycles to maintain liquidity. Consider negotiating better payment terms with suppliers or clients if needed.
• Profitability Focus: Without profit and loss figures available due to micro-entity exemptions, it is crucial to maintain or improve profitability to stop net asset erosion. Consider cost control and revenue growth strategies.
• Prepare for Growth: If the business plans to grow beyond micro-entity thresholds, prepare for enhanced financial reporting and possible audit requirements. This may require strengthening financial controls and record-keeping.
• Regular Financial Reviews: Conduct periodic financial health checks to detect early warning signs and respond proactively before symptoms worsen.

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