SMART SOLUTIONS CONSULTANCY LIMITED

Executive Summary

SMART SOLUTIONS CONSULTANCY LIMITED is in a precarious financial position marked by negative working capital and equity, indicating liquidity and solvency challenges. The company depends heavily on director support and must urgently improve cash flow, address compliance issues, and consider financial restructuring to restore stability. Immediate corrective action is crucial to avoid insolvency risks.

SMART SOLUTIONS CONSULTANCY LIMITED - Analysis Report

Company Number: 14077204

Analysis Date: 2025-07-19 12:33 UTC

Financial Health Assessment Report
Company: SMART SOLUTIONS CONSULTANCY LIMITED
Assessment Date: Based on financials to 30 June 2024

---

1. Financial Health Score: D (Poor)

Explanation: The company shows clear symptoms of financial distress, with net current liabilities and negative shareholders' funds. The working capital is significantly negative, indicating liquidity challenges. Although the director expresses confidence in ongoing support, the financial "vital signs" suggest a fragile condition requiring urgent attention.

---

2. Key Vital Signs

Metric	Value (£)	Interpretation
Current Assets	1,246	Very low short-term resources to cover debts
Cash	570	Minimal liquid cash available
Debtors	676	Some amount receivable but not large
Current Liabilities	6,890	Significant short-term debts due
Net Current Assets (Working Capital)	-5,644	Negative working capital signals liquidity risk
Shareholders' Funds (Equity)	-5,645	Negative equity indicates insolvency risk
Director Loan Account	5,762 owed to director	Indicates reliance on director funding
Employee Count	1 (average)	Very small scale operation
Overdue Confirmation Statement	Yes	Compliance risk, potential penalties

Interpretation of Vital Signs:

• The negative working capital is akin to a patient with a "weak pulse" — the company does not have enough liquid assets to cover its immediate obligations, which is a critical warning sign.
• Negative equity means liabilities exceed assets, similar to an organ failure in health terms — it suggests the company is technically insolvent on a balance sheet basis.
• The director loan indicates the business is dependent on internal financial support to stay afloat, a temporary "life support" system.
• Overdue statutory filings reflect administrative neglect, which could compound financial and legal risks.

---

3. Diagnosis: Financial Condition Overview

SMART SOLUTIONS CONSULTANCY LIMITED is in a precarious financial state. The sharp decline from positive working capital and equity in 2023 to substantial deficits in 2024 reveals acute financial distress. The company's cash reserves have dwindled dramatically, and liabilities exceed current assets by a wide margin. This financial "symptom" signals potential liquidity crises if external support or operational turnaround is not achieved promptly.

The director's note on going concern relies heavily on continued financial backing by the director, which is a critical mitigating factor but also a vulnerability. The business is essentially surviving on this "intravenous" support, with underlying financial health severely compromised.

The small scale of operations (1 employee) suggests limited operational complexity, but also limited revenue-generating capacity, further constraining recovery options.

---

4. Prognosis and Recommendations

Prognosis:
Without corrective action, the company risks insolvency or forced restructuring. The current financial indicators suggest the business is in a fragile state with a high likelihood of worsening liquidity and solvency issues. However, the director's support and low operational scale provide a window for recovery if swift measures are implemented.

Recommendations:

1. Immediate Cash Flow Management

   • Prioritise collecting outstanding debts to improve cash inflow.
   • Negotiate with creditors to extend payment terms or reduce liabilities where possible.

2. Capital Injection or Debt Restructuring

   • Seek additional equity funding or director loans to restore positive working capital.
   • Explore formal restructuring options if informal negotiations fail.

3. Cost Control and Revenue Enhancement

   • Review operating expenses to cut non-essential costs.
   • Explore opportunities to increase client base or fee levels to boost turnover.

4. Compliance and Governance

   • Address overdue confirmation statement immediately to avoid penalties and reputational damage.
   • Maintain timely filings going forward to ensure regulatory compliance.

5. Regular Financial Monitoring

   • Implement monthly cash flow forecasts and financial reviews to detect early warning signs.
   • Consider professional advice to develop a turnaround plan and monitor progress.

---

Summary

SMART SOLUTIONS CONSULTANCY LIMITED is currently exhibiting "symptoms" of severe financial distress, including negative working capital and shareholders' funds, indicating a fragile state akin to a patient in critical condition. The company's survival hinges on the director's financial support and urgent remedial actions to improve liquidity and restore equity. Without intervention, the prognosis is poor, but prompt and decisive steps could stabilise the situation and improve financial health.