CC SMART SOLUTIONS LTD

Executive Summary

CC SMART SOLUTIONS LTD currently maintains a solid financial foundation but faces symptoms of cash flow contraction and reduced profitability. Addressing these through improved cash management, profit retention, and operational diversification will enhance its financial health and ensure sustainable growth.

CC SMART SOLUTIONS LTD - Analysis Report

Company Number: 13142579

Analysis Date: 2025-07-20 13:10 UTC

Financial Health Assessment Report for CC SMART SOLUTIONS LTD

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1. Financial Health Score: B

Explanation:
CC SMART SOLUTIONS LTD demonstrates a generally sound financial position with healthy liquidity and positive net assets. However, a notable reduction in net current assets and shareholders’ funds over the latest year signals some emerging caution. Overall, the company is financially stable but showing symptoms indicative of a contraction phase, warranting attentive monitoring and proactive management.

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2. Key Vital Signs

Metric	2024 (Latest)	2023 (Previous)	Interpretation
Cash Balance	£21,151	£88,018	Sharp decline in cash reserves—watch for cash flow strain.
Current Liabilities	£931	£15,102	Significant reduction in short-term debts—improved immediate solvency.
Net Current Assets	£20,220	£72,916	Decrease by ~72%—less working capital cushion, potential stress.
Net Assets / Shareholders’ Funds	£20,220	£72,916	Reduction reflects retained earnings decline or distributions.
Share Capital	£1	£1	Minimal share capital—typical for small private company.
Creditors Due Within One Year	£931	£15,102	Mostly corporation tax and VAT—manageable current obligations.
Employees	NIL	NIL	No employees—likely dependent on director or contractors.

Industry Context:
Operating in IT consultancy (SIC 62020), where cash flow can be variable and project-based, maintaining liquidity is critical. The company has no employees, indicating a lean structure but potential reliance on the director or subcontracted resources.

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3. Diagnosis: Financial "Health Check"

• Liquidity ("Pulse"): The company maintains positive net current assets, indicating it can cover short-term obligations. However, the decline in cash from £88k to £21k is a "symptom of distress" that could signal reduced client payments, increased expenses, or cash usage in operations/investments. This sharp drop is analogous to a patient whose heart rate is slowing—it may be normal if expected but requires close monitoring.

• Solvency ("Bone Strength"): Net assets remain positive (£20k), meaning the company’s total assets exceed liabilities, a healthy "skeletal" framework. The shareholders’ funds mirror net assets closely, showing no hidden debts or financial leverage.

• Operational Efficiency ("Muscle Tone"): No employees suggest low fixed costs but potential over-reliance on the director or external contractors. The absence of debtors (accounts receivable) in recent years might imply immediate payment terms or reduced sales activity, which could affect revenue stability.

• Growth & Profitability ("Vital Organ Function"): The drop in retained earnings (profit and loss account) from £72,915 to £20,219 is concerning. This decline suggests reduced profitability or possible drawings/dividends. The company operates under a total exemption full filing regime, indicating small size with presumably limited turnover.

• Governance ("Nervous System"): The sole director and majority shareholder, Mr. Ivan Todorov, controls the company entirely, which ensures clear decision-making but may expose the company to single-person risk.

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4. Recommendations: Path to Improved Financial Wellness

• Strengthen Cash Flow Management
  The significant decrease in cash reserves is a "warning symptom." Implement tighter cash flow forecasting and management to avoid liquidity crunches. Consider negotiating better payment terms with clients and suppliers.

• Diversify Revenue or Client Base
  To avoid dependence on a few projects or clients, seek to broaden the client portfolio, which can stabilize income streams and improve "muscle tone" in operations.

• Review Profit Retention Policy
  The drop in retained earnings indicates either reduced profits or withdrawals. Consider retaining more profits within the business to build a stronger financial buffer.

• Consider Formal Financial Planning
  Develop a budget and monitor key financial ratios regularly (e.g., current ratio, quick ratio) to detect early signs of financial stress.

• Explore Tax Planning Opportunities
  Corporation tax remains a short-term creditor; reviewing tax planning with a professional may help optimize cash outflows.

• Enhance Governance and Risk Management
  Consider adding independent oversight or advisory roles to reduce single-person risk and bring diverse perspectives.

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Executive Summary

CC SMART SOLUTIONS LTD is financially stable with positive net assets and manageable liabilities but shows signs of contraction, notably a substantial decline in cash reserves and retained earnings over the past year. The company’s financial "vital signs" suggest the need for improved cash flow management and profit retention to sustain healthy operations and support future growth. Proactive financial planning and diversification of revenue streams are recommended to strengthen the company’s resilience.