SMOKE VAPE CITY LTD

Executive Summary

SMOKE VAPE CITY LTD demonstrates solid financial health for its size, with improving liquidity and increasing shareholders’ equity indicating a stable and solvent business. While the company shows no immediate signs of distress, attention to asset management and governance will support sustained financial wellness as it grows. Continued focus on cash flow and strong internal controls is recommended to maintain this positive trajectory.

SMOKE VAPE CITY LTD - Analysis Report

Company Number: 14070785

Analysis Date: 2025-07-29 15:41 UTC

Financial Health Assessment for SMOKE VAPE CITY LTD (as of 30 April 2024)

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1. Financial Health Score: B

Explanation:
This score reflects a generally stable financial condition for a micro-entity with positive net assets, improving working capital, and steady shareholder equity growth. However, some caution is warranted due to modest asset base and relatively thin liquidity margins.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	2,926	Tangible long-term assets show a slight decrease from previous year, indicating some asset usage or disposal.
Current Assets	1,858	Significant increase (+231%) suggesting improved short-term resource availability (cash, stock, receivables).
Current Liabilities	1,333	Increased from prior year but manageable relative to current assets.
Net Current Assets	525	Healthy working capital, up from 41 last year; indicates better short-term financial resilience.
Accruals & Deferred Income	450	Reduced from 1,385 prior year, showing improved matching of income and expenses.
Net Assets (Equity)	3,001	Positive and growing equity; company retains value and is solvent.
Shareholders’ Funds	3,001	Equal to net assets, confirming no hidden liabilities or minority interests.
Average Employees	1	Very small workforce consistent with micro-company status.

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3. Diagnosis: Financial Vitality and Symptoms Analysis

• Healthy Cash Flow Indicators: The large increase in current assets relative to current liabilities suggests the company has improved its liquidity position, which is akin to a patient showing stronger pulse and better hydration after treatment. This reduces the risk of short-term financial distress.

• Asset Management: The slight decrease in fixed assets may indicate disposal or depreciation without replacement, which is normal for a small business but should be monitored to ensure operational capacity is maintained.

• Working Capital Improvement: Net current assets rose significantly, a strong sign of improving operational health—this is like a patient recovering strength in their vital organs, implying better ability to meet immediate obligations.

• Equity Growth: Steady increase in net assets and shareholders’ funds over 2 years signals retained earnings or capital injection, reflecting a business that is building financial "muscle" rather than depleting reserves.

• Exemption from Audit: Being a micro-entity, SMOKE VAPE CITY LTD benefits from simplified reporting, but this also means less external scrutiny, so internal financial controls should be robust to avoid hidden issues.

• Single Director and Owner: Mr. Aref Bareqzia holds full control, which can be efficient but also a risk if governance or succession planning is weak.

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4. Recommendations for Financial Wellness Improvement

• Maintain Healthy Liquidity: Continue focusing on cash management to keep current assets comfortably above current liabilities, preventing "symptoms" of cash crunch.

• Asset Monitoring: Review fixed assets regularly to ensure they support business operations effectively and plan for timely replacement or upgrades.

• Strengthen Financial Controls: As a micro-entity without audit, implement strong internal accounting processes and periodic reviews to catch early signs of financial stress.

• Diversify Ownership or Governance: Consider involving additional directors or advisors to enhance oversight and reduce risks associated with single-person control.

• Plan for Growth: Use improved working capital to explore opportunities for scaling operations carefully, ensuring growth is matched by financial capacity.

• Prepare for Future Filings: Keep up-to-date with filing deadlines to avoid penalties and reputational risks.

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