SMART APPROACH LTD

Executive Summary

Smart Approach Ltd is a micro private limited company showing improving financial health, with net assets nearly tripling and a positive working capital position in the latest year. The company’s liquidity appears sufficient to service short-term liabilities, although reliance on a director loan warrants monitoring. Credit approval is recommended with exposure limited to the scale of the business and ongoing review of financial developments.

SMART APPROACH LTD - Analysis Report

Company Number: 13253720

Analysis Date: 2025-07-29 14:16 UTC

1. Credit Opinion: APPROVE
   Smart Approach Ltd demonstrates a modest but improving financial position typical of a micro-entity in the early years of operation. The company’s net assets have nearly tripled in the latest financial year, driven by improved working capital. While absolute values are small, the positive trend and absence of overdue filings or liens suggest management is conscientious and the company is capable of meeting short-term obligations. The director loan noted is not excessive relative to net assets but should be monitored. Given its micro size, limited fixed assets, and single employee, credit exposure should be modest and carefully structured.

2. Financial Strength:
   The latest balance sheet (year ending 31 March 2024) shows net assets of £3,113, up from £1,134 the prior year. Fixed assets have decreased slightly to £267, which is negligible in scale. Current assets increased significantly to £7,991, while current liabilities rose to £6,548, resulting in net current assets (working capital) of £2,846, a strong improvement from £601. The company’s capital and reserves mirror net assets, indicating no significant long-term debt. Overall, the financial strength is weak in absolute terms due to micro scale, but the balance sheet is stable with a positive working capital position.

3. Cash Flow Assessment:
   The increase in current assets and net current assets indicates improved liquidity and working capital management. The company appears to have sufficient short-term assets to cover current liabilities by a factor of 1.22 (current ratio ~1.22), which is acceptable for a micro business and suggests it can meet immediate financial obligations. The director loan of £4,813 is material relative to net assets and should be reviewed to ensure it does not undermine liquidity. No information on cash flow statements is provided, but the balance sheet metrics imply manageable liquidity risk at this stage.

4. Monitoring Points:

• Director loan balance and terms to ensure it does not impair liquidity or shareholder equity.
• Continued growth in net current assets and net assets to support creditworthiness.
• Timely filing of accounts and confirmation statements to avoid regulatory risk.
• Any material changes in business scale, employee numbers, or sector risks in management consultancy.
• Profitability trends once profit and loss data becomes available to assess operational viability.