SMART PHONES SHOP LTD

Executive Summary

Smart Phones Shop Ltd demonstrates ongoing liquidity challenges with current liabilities substantially exceeding current assets and minimal net equity. The financial position is fragile, limiting the company’s ability to support new credit facilities. Without significant improvement in working capital and cash flow, the risk of non-payment is elevated, leading to a credit decline recommendation.

SMART PHONES SHOP LTD - Analysis Report

Company Number: 14006627

Analysis Date: 2025-07-29 20:51 UTC

1. Credit Opinion: DECLINE
   Smart Phones Shop Ltd presents a weak credit profile primarily due to persistent negative net current assets, indicating liquidity stress. Despite small net positive net assets, the company’s current liabilities significantly exceed current assets (£92,172 vs £38,866 as of March 2024), reflecting potential difficulty in meeting short-term obligations. The company is in the micro entity category with minimal growth and limited financial buffer, raising concerns over its ability to service any additional debt. Management changes and concentrated control by a single individual add some governance risk, but do not offset the financial fragility.

2. Financial Strength:
   The balance sheet shows fixed assets constant at £55,000 over three years, suggesting no recent capital investment or asset disposals. However, the key weakness lies in working capital: current liabilities exceed current assets by over £53,000, a trend unchanged from prior years. Net assets remain positive but very marginal (£1,694), indicating minimal shareholder equity and limited capacity to absorb losses or fund expansion. The company’s small size and micro entity status imply limited operational scale and financial depth.

3. Cash Flow Assessment:
   The significant negative net working capital position indicates potential cash flow difficulties, especially in meeting short-term creditor payments. The minimal current asset base as recently as 2023 (£887) and modest increase to £38,866 in 2024 suggests some improvement but remains insufficient against current liabilities. Liquidity risk is elevated without clear evidence of strong cash generation or external financing. Working capital management appears weak, and cash reserves might be inadequate to cover operational needs or unexpected outflows.

4. Monitoring Points:

• Track quarterly updates on current assets vs current liabilities to detect any improvement or deterioration in liquidity.
• Monitor director changes and PSC concentration for governance risks.
• Review any new filings for evidence of capital injections or debt restructuring.
• Watch for overdue filings or signs of financial distress in future accounts.
• Assess cash flow statements if available to understand operational cash generation and financing activities.