SMARTPARC GROUP LIMITED

Executive Summary

SMARTPARC GROUP LIMITED is showing signs of financial strain with negative working capital and shareholders’ funds, indicating liquidity challenges and potential solvency concerns. The company relies heavily on intercompany financing to meet short-term obligations, which is not a sustainable long-term solution. Immediate actions to improve liquidity, manage costs, and strengthen equity are critical to restoring financial health and ensuring ongoing viability.

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Company Analysis

This analysis is opinion only and should not be interpreted as financial advice.

SMARTPARC GROUP LIMITED - Analysis Report

Company Number: 12940913

Analysis Date: 2025-07-19 12:22 UTC

Financial Health Assessment: SMARTPARC GROUP LIMITED


1. Financial Health Score: D

Explanation:
The company’s financial health is currently weak. Persistent negative net current assets and shareholders’ funds indicate financial strain and liquidity issues. The company is showing symptoms of financial stress, mainly due to high short-term liabilities exceeding its current assets. Without corrective measures, this could worsen.


2. Key Vital Signs

Metric 2023 Value (£) Interpretation
Fixed Assets 80,449 Stable, primarily intangible assets (trade marks). Indicates investment in long-term resources.
Current Liabilities 355,095 High short-term debts indicating liabilities due within one year.
Net Current Assets -82,000 Current assets minus current liabilities is negative, signaling working capital deficiency.
Total Assets Less Current Liabilities -1,551 Negative figure indicates total assets cannot cover current liabilities.
Shareholders’ Funds -1,651 Negative equity suggests accumulated losses or funding issues.
Share Capital 100 Nominal, indicating low paid-in capital.

Additional Observations:

  • The company holds significant amounts of "stocks" (work in progress), but these are not sufficient to cover current liabilities.
  • Amounts owed to group undertakings constitute the bulk of current liabilities (£353,644), which may reflect intercompany financing rather than external creditor pressure.
  • The company employs 2 people, suggesting a small operation consistent with the "small company" filing regime.
  • No audit has been performed, but accounts are prepared under FRS 102 for small entities.
  • Directors and persons of significant control are stable and have equal voting rights and share ownership.

3. Diagnosis

SMARTPARC GROUP LIMITED exhibits symptoms of financial distress primarily due to a negative working capital situation. This means the company’s short-term debts exceed its current assets by £82,000, which can impair its ability to meet immediate obligations without additional funding or cash inflows. The negative shareholders' funds further indicate the business has accumulated losses or that equity is eroded, possibly due to ongoing operational deficits or financing structure.

The company’s fixed assets are mostly intangible assets (trade marks), which can be valuable but are not liquid. The high reliance on amounts owed to group undertakings as creditors suggests that financing is currently being supported within the group, mitigating immediate external creditor risk but posing a risk if intercompany funding is withdrawn.

The negative total assets less current liabilities (net assets) indicates the company is technically insolvent on a balance sheet basis. Although solvent status requires more analysis including cash flow and profitability (not provided), the balance sheet paints a picture of financial strain.


4. Recommendations

To improve financial wellness and regain a healthy financial pulse, the company should consider the following steps:

  • Improve Liquidity:
    Work to reduce current liabilities or increase current assets. This can be done by accelerating cash collection, reducing inventory/work in progress, or negotiating longer payment terms with creditors.

  • Capital Injection:
    Consider raising additional equity capital or securing longer-term financing to strengthen shareholders’ funds and reduce reliance on short-term group loans.

  • Cost Management:
    Review operating expenses and headcount to ensure cost efficiency given the small scale of operations.

  • Intercompany Loan Restructuring:
    If amounts owed to group undertakings are repayable soon, negotiate longer repayment periods or convert some debt to equity to ease short-term pressure.

  • Financial Monitoring:
    Implement regular financial health monitoring focusing on working capital metrics and cash flow forecasts to detect early symptoms of distress.

  • Strategic Review:
    Evaluate business model and profitability drivers, as ongoing losses may undermine long-term viability.


Medical Analogy Summary

SMARTPARC GROUP LIMITED is currently experiencing "symptoms of distress" characterized by a "negative working capital pulse" and "eroded shareholder equity." Its financial "vitals" suggest that without intervention, the company risks a "liquidity collapse." However, the presence of intercompany loans acts as a temporary "life support." To restore financial "health," the company must "stabilize vital signs" through liquidity improvement and capital strengthening.



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