SMART AND CREATIVE SOLUTIONS GROUP LIMITED

Executive Summary

SMART AND CREATIVE SOLUTIONS GROUP LIMITED is currently facing significant financial challenges, with persistent negative equity and liquidity shortfalls indicating distress. While operational downsizing reflects cost pressure, urgent intervention through liquidity management, debt restructuring, and capital injection is essential to restore financial health and viability.

SMART AND CREATIVE SOLUTIONS GROUP LIMITED - Analysis Report

Company Number: 13243577

Analysis Date: 2025-07-29 15:53 UTC

Financial Health Assessment for SMART AND CREATIVE SOLUTIONS GROUP LIMITED

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1. Financial Health Score: D

Explanation:
The company exhibits significant financial distress, reflected in persistent net liabilities and negative net current assets. While it remains active and compliant with filing deadlines, the balance sheet reveals symptoms of financial strain, signaling urgent need for corrective actions to restore solvency and operational stability.

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2. Key Vital Signs:

Metric	2024 (£)	Interpretation
Fixed Assets	2,083	Minimal investment in long-term assets; stable but small base.
Current Assets	759	Very low liquidity; cash and receivables insufficient to cover immediate obligations.
Current Liabilities	19,431	High short-term debts creating liquidity pressure.
Net Current Assets	-5,904	Negative working capital; signals cash flow crunch and inability to meet short-term liabilities.
Creditors >1 year	19,431	Significant long-term debt appearing for the first time in 2024; increases financial burden.
Net Assets (Equity)	-23,252	Negative equity indicates insolvency on a balance sheet basis; accumulated losses depleting shareholder funds.
Shareholders’ Funds	-23,252	Mirrors negative net assets; owner’s investment is eroded.

Additional Context:

• The company reduced its workforce from 1 to 0, possibly a cost-cutting response to financial stress.
• The shift from no long-term creditors in 2023 to a sizeable long-term creditor figure in 2024 suggests recent borrowing or deferred payments to manage cash flow.

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3. Diagnosis: Financial Condition Assessment

The company shows clear symptoms of financial distress, analogous to a patient exhibiting signs of chronic illness without sufficient recovery periods. The persistent negative net assets over the past three years, worsening working capital position, and the emergence of long-term creditors signal ongoing solvency challenges. The negative net current assets highlight a liquidity "arrhythmia," where current liabilities exceed current assets by a significant margin, jeopardizing daily operational capacity.

The reduction of employees to zero suggests operational downsizing or potential halt of core activities, which may be a symptom or a cause of financial decline. Despite these symptoms, the company remains compliant with statutory requirements and has a stable management structure, which is positive.

Overall, the financial "vital signs" indicate the company is in a critical state that, if untreated, could lead to insolvency or forced liquidation.

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4. Recommendations: Actions to Restore Financial Wellness

• Immediate Liquidity Management:
  Develop a cash flow forecast and seek to improve liquidity by collecting receivables aggressively, negotiating extended payment terms with creditors, or securing bridging finance.

• Debt Restructuring:
  Engage creditors to restructure existing debts, especially the significant long-term liabilities, to avoid default and spread repayments more manageably.

• Operational Review:
  Re-evaluate the business model and operational expenses to ensure sustainability. Consider strategic partnerships or diversification to increase revenues.

• Capital Injection:
  Explore options for equity funding either via existing shareholders increasing investment or by attracting new investors to restore positive net assets.

• Financial Monitoring:
  Implement regular financial health checks with key performance indicators (KPIs) such as liquidity ratios, debt coverage ratios, and profitability metrics to detect early signs of distress.

• Professional Advice:
  Consult insolvency practitioners or financial advisors early to evaluate options including restructuring under formal insolvency procedures if necessary.

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