SMITHERS COMMS LTD

Executive Summary

SMITHERS COMMS LTD exhibits a precarious financial position with minimal equity and negative working capital, undermining its ability to meet short-term and long-term liabilities. The company’s financial trajectory is declining, with increasing creditor obligations and poor liquidity signals. Credit extension is not advisable without significant mitigation or additional security.

SMITHERS COMMS LTD - Analysis Report

Company Number: 14210644

Analysis Date: 2025-07-29 12:51 UTC

1. Credit Opinion: DECLINE
   SMITHERS COMMS LTD demonstrates significant financial weakness despite being active and current with filings. The latest accounts show negligible net assets (£12) and a net current liability position (-£51), signaling poor liquidity. The company also has substantial long-term creditors (£29k) which likely represent outstanding debt or obligations that may pressure cash flow. The drastic decline in net assets from £171 to £12 in one year and a negative working capital position raises concerns about its ability to service debt or meet obligations without external support.

2. Financial Strength:
   The balance sheet reveals a fragile financial structure. Fixed assets increased to £30,134, but this is offset by creditors falling due after more than one year (£29,051), indicating leveraged asset acquisition or deferred payments. Current liabilities exceed current assets, resulting in negative net current assets. Shareholders’ funds are almost depleted (£12), reflecting erosion of equity and insufficient retained earnings. The micro-entity scale and sole employee status limit operational scale and resilience.

3. Cash Flow Assessment:
   Working capital is negative, implying potential strain in meeting short-term liabilities. Current assets are primarily cash or receivables (£11,436), but current liabilities (£11,487) marginally exceed these, risking liquidity crunch. The presence of long-term creditors suggests ongoing repayment obligations that may further stress cash flow. With only one employee and minimal equity buffer, the company’s cash flow coverage of debt is weak, increasing default risk.

4. Monitoring Points:

• Monitor upcoming cash flow statements and bank balances for liquidity improvements.
• Review creditor aging and repayment schedules to assess debt servicing capacity.
• Track net asset and equity trends in subsequent filings to identify potential recovery or further deterioration.
• Evaluate any changes in ownership or director actions that may impact financial stability.
• Observe industry conditions in wired telecommunications that may affect revenue prospects.