SMART PROPERTY SCOTLAND LTD

Executive Summary

SMART PROPERTY SCOTLAND LTD demonstrates a stable asset base with positive equity, indicating solvency, but suffers from persistent liquidity challenges due to negative working capital. Addressing short-term liabilities and improving cash flow management are critical to avoid financial distress and support sustainable growth. With focused financial oversight and possible capital support, the company can strengthen its financial health and operational resilience.

SMART PROPERTY SCOTLAND LTD - Analysis Report

Company Number: SC745518

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

Financial Health Assessment for SMART PROPERTY SCOTLAND LTD (as of 30 September 2024)

---

1. Financial Health Score: C

Explanation:
The company shows stable net asset growth but suffers from significant working capital deficiencies (negative net current assets), indicating liquidity challenges. While the balance sheet shows a positive net asset position and no signs of insolvency, the "symptoms" of financial strain, such as ongoing current liabilities exceeding current assets, warrant cautious monitoring and remedial action.

---

2. Key Vital Signs

Metric	2024 Value (£)	2023 Value (£)	Interpretation
Fixed Assets	132,708	132,708	Stable investment in long-term assets, likely property-related given industry SIC.
Current Assets	20,949	12,017	Increased cash or short-term resources but still low relative to current liabilities.
Current Liabilities	137,122	136,415	High short-term debts that must be settled within one year; nearly 7 times current assets.
Net Current Assets (Working Capital)	(116,173)	(124,398)	Negative working capital indicates tight liquidity and potential cash flow constraints.
Net Assets (Equity)	15,995	7,830	Positive equity, doubled in a year, indicating retained earnings or capital injections.
Shareholders Funds	15,995	7,830	Mirrors net assets; owner equity is positive but low relative to liabilities.

Interpretation:

• The negative net current assets are a significant "symptom" showing the company’s inability to cover short-term obligations with short-term assets, a potential liquidity crisis sign.
• The positive net assets suggest the company is solvent overall and possesses valuable fixed assets.
• Growth in net assets from 7,830 to 15,995 is a "healthy pulse," indicating either profit retention or capital infusion.
• No employees and exemption from audit imply a micro-entity with a simple structure.

---

3. Diagnosis

SMART PROPERTY SCOTLAND LTD’s financial "vital signs" reveal a business with a stable asset base but struggling liquidity. The company’s fixed assets likely represent property holdings consistent with its real estate management SIC code (68320). However, the persistent negative working capital (current assets significantly lower than current liabilities) is a worrying "symptom of distress" that suggests the company may face challenges meeting short-term debts and operational expenses without additional cash inflows or financing.

The doubling of net assets over the last year is encouraging, potentially reflecting retained earnings or additional capital contributions by the shareholders (who are also the directors). The absence of employees and audit requirements points to a small, closely-held operation.

Overall, the company’s financial condition is stable but fragile—it is solvent with positive equity, but liquidity constraints could impede smooth operations or growth if not addressed.

---

4. Recommendations

To improve financial wellness and address liquidity symptoms, I recommend the following actions:

• Improve Working Capital Management:
  Explore ways to increase current assets or reduce current liabilities. This could include accelerating receivables, negotiating longer payment terms with creditors, or converting some liabilities to longer-term debt.

• Cash Flow Enhancement:
  Monitor cash flow closely and consider short-term financing options such as overdrafts or invoice factoring to ensure operational liquidity.

• Asset Utilization Review:
  Assess if fixed assets are generating expected returns or if any underperforming assets can be sold or leveraged to improve cash position.

• Capital Injection Consideration:
  Given directors are also shareholders, consider further equity injections to strengthen the balance sheet and fund working capital needs.

• Financial Planning and Forecasting:
  Implement regular financial forecasting to anticipate cash needs and avoid liquidity shocks.

• Cost Control:
  Although no employees are recorded, keep operating costs under tight control to preserve cash.

---