Company Number: 12620474

Analysis Date: 2025-07-29 14:53 UTC

1. Credit Opinion: DECLINE
   MIKE SMITH TRAINING LTD shows a significant deterioration in liquidity and net asset value in the most recent financial year ending May 2024. Net current assets have fallen drastically from £6,955 in 2023 to only £735 in 2024, indicating a near depletion of working capital. Net assets declined from £9,541 to £2,463, a 74% reduction, signaling erosion of the company’s financial buffer. The low cash balance (£2,315) relative to current liabilities (£14,640) raises concerns about the company’s ability to meet short-term obligations reliably. The absence of more than one employee and minimal tangible fixed assets further highlight limited operational scale and capacity. Given these factors, the company currently lacks sufficient financial strength and liquidity to comfortably service new credit or debt facilities.

2. Financial Strength:
   The balance sheet is weak and weakening. Tangible fixed assets are minimal (£2,133) and declining, while trade debtors remain relatively stable but have not converted into improved cash balances. Current liabilities remain high and have only slightly decreased, indicating ongoing cash outflows. The company’s equity base is very low (£2,463) with a nominal share capital of £1, reflecting limited shareholder investment. The sharp drop in net assets and working capital suggests either operational losses or increased liabilities, reducing the company’s resilience against financial stress.

3. Cash Flow Assessment:
   Cash at bank fell from £9,612 in 2023 to £2,315 in 2024, a reduction of over 75%, pointing to significant cash outflow or poor cash collection efficiency. Trade debtors are substantial (£13,060), but slow collection or extended payment terms may be straining cash resources. Net current assets margin is thin at £735, implying very limited liquidity cushion. The company’s ability to generate positive operational cash flow is questionable and may rely heavily on timely debtor collections or additional capital injections.

4. Monitoring Points:

• Track cash flow and cash balances monthly to confirm liquidity improvement or further deterioration.
• Monitor debtor aging and collection performance to ensure cash inflows are timely.
• Watch for any increase in current liabilities that might overwhelm working capital.
• Review management actions to restore profitability and rebuild reserves.
• Confirm ongoing compliance with filing and tax obligations to avoid penalties or enforcement actions.