SMART TOOL GROUP GLOBAL LIMITED

Executive Summary

SMART TOOL GROUP GLOBAL LIMITED demonstrates an improving equity position but faces short-term liquidity challenges due to increased current liabilities and high trade receivables. The company’s investment in intangible assets suggests growth ambitions, though this requires monitoring for impairment risk. No compliance issues are evident; however, further examination of debtor quality and liability structure is advised to fully understand operational stability and solvency.

SMART TOOL GROUP GLOBAL LIMITED - Analysis Report

Company Number: 12868297

Analysis Date: 2025-07-20 17:47 UTC

1. Risk Rating: MEDIUM

Justification: The company shows positive net assets and a recent increase in intangible fixed assets, suggesting investment in growth and some equity buffer. However, the net current liabilities position in 2023, a sharp increase in current liabilities, and significant trade debtors raise concerns about short-term liquidity and cash flow management.

2. Key Concerns:

• Liquidity strain evidenced by net current liabilities of £173k at 31/12/2023 compared to net current assets of £820k the previous year, primarily due to a large increase in current liabilities (£2.54m in 2023 vs £0.96m in 2022).
• High trade debtor balance (£2.05m) relative to cash (£128k) may indicate potential collection delays or credit risk concentration.
• Significant intangible asset addition (£1.25m) in 2023 concentrated in software/licenses, which could pose impairment risk if not matched by revenue growth or cash generation.

3. Positive Indicators:

• Net assets grew from £851k in 2022 to £1.01m in 2023, indicating increasing equity and potential retained earnings.
• No overdue filings or compliance issues noted; accounts and confirmation statements are up to date.
• Company remains active since incorporation in 2020 with stable director appointments and operating in a defined wholesale industry niche (machine tools).

4. Due Diligence Notes:

• Investigate the nature and recoverability of the trade debtors to assess credit risk and cash flow timing.
• Review the business plan and revenue trends supporting the large increase in intangible assets to confirm if capitalised software costs are justified.
• Assess the composition and maturity profile of current liabilities to understand liquidity pressures and any refinancing requirements.
• Confirm absence of director conduct issues or related party conflicts beyond disclosed transactions.