SLG SYSTEMS LIMITED

Executive Summary

SLG Systems Limited is a small, active private company in the security systems service sector with growing net assets and compliance in filings. However, the recent absence of cash balances and rising current liabilities warrant caution regarding liquidity and short-term financial health. Further review of debtor quality and director funding arrangements is recommended to fully assess operational sustainability and risk exposure.

SLG SYSTEMS LIMITED - Analysis Report

Company Number: 13246775

Analysis Date: 2025-07-20 16:08 UTC

1. Risk Rating: MEDIUM
   Justification: SLG Systems Limited shows positive net assets and shareholder funds growth over the reported periods, indicating solvency. However, the absence of cash at year-end 2024 combined with increasing current liabilities and director loans suggests potential liquidity pressures. The company is relatively young and small, which inherently carries business sustainability risks.

2. Key Concerns:

• Liquidity Constraints: Cash at bank dropped from £5,755 in 2023 to £0 in 2024, while current liabilities increased significantly from £28,994 to £47,112, indicating potential cash flow strain.
• Director Advances and Related Party Transactions: The director’s loan account fluctuated, ending with a small negative balance, which may mask underlying cash management issues or reliance on director funding.
• Limited Financial Transparency: The company filed unaudited accounts with income statement omitted (per small company exemptions), limiting insight into profitability and cash flow dynamics.

3. Positive Indicators:

• Growing Net Assets and Shareholder Funds: Net assets increased from £20,423 in 2021 to £27,197 in 2024, demonstrating retained earnings accumulation and business growth.
• Current Assets Exceed Current Liabilities: Despite liquidity concerns, net current assets remain positive (£10,027 in 2024), indicating short-term obligations are covered by current assets.
• No Overdue Filings: Both accounts and confirmation statements are up to date, suggesting sound compliance practices.

4. Due Diligence Notes:

• Investigate the composition and collectability of trade debtors (£54,389 in 2024), as high debtor balances with zero cash may stress liquidity.
• Review director loan arrangements, repayment terms, and any related party transactions for financial dependence or conflicts of interest.
• Obtain management accounts or cash flow statements to assess operating cash generation and working capital management.
• Confirm no contingent liabilities or off-balance sheet risks exist that could impact solvency.
• Evaluate client contracts and market positioning to gauge operational stability in the security systems service industry.