TIER SMART BUSINESS SOLUTIONS (LONDON) LIMITED

Executive Summary

The company exhibits financial distress with negative equity and working capital deficits, indicating liquidity challenges and accumulated losses. As a micro-entity in its early years, urgent measures to improve cash flow, restructure liabilities, and secure additional funding are recommended to stabilize and strengthen the business.

TIER SMART BUSINESS SOLUTIONS (LONDON) LIMITED - Analysis Report

Company Number: 13896310

Analysis Date: 2025-07-20 14:28 UTC

Financial Health Assessment: TIER SMART BUSINESS SOLUTIONS (LONDON) LIMITED

---

1. Financial Health Score: D

Explanation:
The company is showing clear symptoms of financial distress with negative net assets and growing deficits over the last two years. While it maintains positive net current assets (working capital), the overall liabilities outweigh assets significantly, indicating an unhealthy financial position. Given its micro-entity size and early stage (incorporated 2022), this score reflects caution but not immediate insolvency.

---

2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Fixed Assets	3,420	3,000	Stable but minimal investment in long-term assets, typical for a micro business.
Current Assets	21,493	16,252	Increasing short-term assets (cash, receivables), a positive sign of liquidity improvement.
Current Liabilities	39,429	26,028	Rising short-term debts, which could pressure cash flow and operational flexibility.
Net Current Assets (Working Capital)	-17,936	-9,776	Negative working capital, indicating the company owes more in the short term than it holds.
Total Assets Less Current Liabilities	-14,516	-6,776	Net liabilities exceeding assets, a critical warning sign of financial weakness.
Net Assets / Shareholders’ Funds	-14,516	-6,776	Negative equity, showing accumulated losses and possible dependency on external funding.
Number of Employees	1	1	Small size, likely founder-led, limiting operational scale and resource capacity.

---

3. Diagnosis: Underlying Financial Condition

The company exhibits classic "symptoms of distress" in its financial bloodstream:

• Negative Net Assets (Equity Deficit): The company has liabilities exceeding its total assets by £14,516 as of 2024, worsening from the previous year. This means the business owes more than it owns, a critical red flag.

• Negative Working Capital: Current liabilities exceed current assets by over £17k, indicating difficulty in meeting short-term obligations without additional funding or asset liquidation. This puts strain on day-to-day operations and signals liquidity risk.

• Rising Liabilities: Both current and long-term liabilities have increased significantly year-on-year, suggesting increasing reliance on creditor financing or loans which may not be sustainable without improving revenue or cash flow.

• Minimal Fixed Assets: The company's asset base is very lean, typical for micro-entities, but also means limited collateral or investment in growth assets.

• Micro-Entity and Early Stage: Incorporated in 2022, the company is still in its infancy. Early losses and negative equity are not uncommon, but without a clear path to profitability and cash flow improvement, the financial health is precarious.

• Operational Scale: With just one employee (likely the director), the business may face challenges in scaling operations or managing financial controls effectively.

Overall, the financial "vital signs" reveal a company struggling to maintain healthy cash flow and balance sheet stability. The underlying cause appears to be insufficient revenue or profitability to cover liabilities and expenses, leading to accumulated losses.

---

4. Recommendations: Prescriptions for Financial Wellness

To improve the company's financial health and prevent progression to insolvency, consider the following actions:

• Improve Cash Flow Management:
  Prioritize collecting receivables faster, negotiate extended payment terms with suppliers, and control discretionary expenses to ease short-term liquidity pressure.

• Restructure Debt and Liabilities:
  Engage creditors to explore restructuring options such as extended payment plans or refinancing to reduce immediate cash outflows and align liabilities with cash generation capacity.

• Increase Revenue Streams:
  Explore new clients or markets, enhance marketing efforts, or diversify service offerings to boost sales and generate positive operating cash flow.

• Seek Additional Capital Injection:
  The shareholder (Ms. Rehnaz Nisar) may consider injecting equity or obtaining external funding to recapitalize the business and reduce negative net assets, restoring balance sheet health.

• Monitor Financial Metrics Regularly:
  Establish monthly financial reviews focusing on liquidity ratios, working capital, and profitability to detect early symptoms of financial distress and act promptly.

• Operational Efficiency:
  Consider cost optimization, automation, or outsourcing non-core activities to reduce overheads and improve margins.

• Professional Advice:
  Consult a financial advisor or accountant specialized in turnaround strategies for micro-entities to tailor an actionable recovery plan.

---

Executive Summary

TIER SMART BUSINESS SOLUTIONS (LONDON) LIMITED is currently in a financially vulnerable position, characterized by negative net assets and working capital deficits that signal liquidity stress. As a young micro-entity, the company faces challenges in balancing liabilities with limited assets and operational scale. Immediate focus on cash flow improvement, debt restructuring, and potential capital injection is essential to restore financial health and ensure sustainable business operations.