SMR TRAINING SOLUTIONS LTD

Executive Summary

SMR Training Solutions Ltd shows solid financial health with positive net assets and strong working capital, reflecting operational stability for a young company. However, the relatively low cash reserves compared to high receivables indicate a need for improved cash flow management. Overall, the company is financially sound but should focus on liquidity optimization to sustain growth.

SMR TRAINING SOLUTIONS LTD - Analysis Report

Company Number: 13991182

Analysis Date: 2025-07-29 17:26 UTC

Financial Health Assessment: SMR TRAINING SOLUTIONS LTD (as of 31 March 2025)

---

1. Financial Health Score: B

Explanation:
SMR Training Solutions Ltd demonstrates a solid financial footing for a young company incorporated in 2022. The company shows positive net assets, healthy working capital, and shareholder equity growth, indicating effective capital management and operational stability. However, the relatively low cash reserves compared to debtors and increasing current liabilities suggest a cautious outlook. The score "B" reflects generally good financial health with room for improvement in liquidity management to ensure sustained operational resilience.

---

2. Key Vital Signs: Critical Metrics and Interpretation

Metric	Value (2025)	Interpretation
Net Assets	£4,662	Positive net assets indicate the company’s total resources exceed its liabilities — a good sign of solvency.
Shareholders' Funds	£4,661	Equity is positive and slightly increased from previous years, showing retained earnings and investor confidence.
Net Current Assets (Working Capital)	£3,198	Positive working capital indicates the company can cover short-term debts comfortably — a "healthy cash flow" symptom.
Current Liabilities	£1,763	Slightly increased from last year, signalling rising short-term obligations that require monitoring.
Debtors	£4,302	High debtors relative to cash suggest income is tied up in receivables, potentially impacting liquidity if collections slow.
Cash at Bank	£659	Low cash reserves compared to liabilities and debtors — a "symptom of liquidity stress" risk if payments are delayed.
Fixed Assets (Net Book Value)	£1,464	Modest investment in tangible assets, depreciating steadily, normal for a service-oriented business.
Profit and Loss Account	£4,661	Retained profits indicate the company is accumulating earnings rather than losses.

---

3. Diagnosis: What the Financial Data Reveals About Business Health

• Solvency: SMR Training Solutions Ltd is solvent with net assets positive and consistent over three years, indicating no immediate risk of insolvency. The shareholders’ funds are stable and growing, reflecting retained earnings and shareholder investment.

• Liquidity: The company's current assets exceed current liabilities by a healthy margin, indicating it can meet short-term obligations. However, cash reserves are relatively low (£659) compared to debtors (£4,302) and liabilities (£1,763). This suggests the company relies on timely collection of receivables to maintain cash flow, which is a potential vulnerability if clients delay payments.

• Operational Efficiency: The increase in debtors from zero to £4,302 over the last year signals growing sales or services provided on credit. While growth in receivables is typical in expanding businesses, it places pressure on cash flow management.

• Asset Management: Fixed assets have decreased slightly over time due to depreciation and modest capital expenditure. This is appropriate for a company in the professional services sector, where large physical assets are not critical.

• Profitability: Retained earnings in the profit and loss account are positive and increasing, indicating the company is profitable or at least generating cumulative positive results over time.

• Size and Scale: As a private limited company registered as a small entity with exemption from audit, the company appears to be in early growth stages with a single director and low employee count. This is common for small professional service firms.

---

4. Recommendations: Actions to Improve Financial Wellness

• Improve Cash Reserves: The company should aim to increase cash at bank to create a buffer against delayed debtor payments. Consider negotiating better payment terms with clients or incentivising early payments to improve liquidity.

• Tighten Credit Control: With a significant rise in debtors, implementing stricter credit control policies will reduce the risk of bad debts and improve cash flow reliability. Regular aging analysis of receivables is advised.

• Monitor Current Liabilities: The increase in current liabilities warrants ongoing monitoring. Ensure that short-term obligations, especially tax and social security payments, are planned ahead to avoid cash flow crunches.

• Plan for Growth Investment: Given the modest fixed asset base, if business growth requires more equipment or infrastructure, plan capital expenditure carefully to avoid overextending financially.

• Maintain Financial Reporting Discipline: Continue timely filing of accounts and confirmation statements to avoid penalties and maintain good standing with Companies House.

• Consider Audit or External Review: While exempt from audit, periodic external financial reviews or advisory engagement can provide additional assurance and strategic insight as the business grows.

---

Medical Analogy Summary:

SMR Training Solutions Ltd presents the "vital signs" of a young but generally healthy company—positive equity and solid working capital are like a strong heartbeat and healthy blood pressure, indicating robustness. However, the "symptoms" of low cash reserves and rising receivables suggest a potential "circulatory" issue in cash flow that requires attention to prevent financial distress. With proactive management, this company’s prognosis is stable and promising.

---