Company Number: 13910210

Analysis Date: 2025-07-20 17:07 UTC

1. Credit Opinion: DECLINE
   AA Building Solutions Limited demonstrates significant financial distress with worsening net liabilities and negative net current assets. The company’s net liabilities increased from -£38k in 2024 to -£57k in 2025, and net current liabilities deepened from -£41k to -£57k. The absence of fixed assets in 2025 and minimal debtor balances suggest limited operational capacity. Given these financial weaknesses and the company’s short trading history (incorporated in 2022), risk of default on credit obligations is high. No audit or detailed income statement is available to assess profitability or cash generation, further limiting credit confidence.

2. Financial Strength:
   The balance sheet is weak and deteriorating. Total assets less current liabilities moved from a negative £26.5k in 2024 to a negative £57.2k in 2025. Shareholders’ funds are negative and worsening, indicating accumulated losses and erosion of equity. Fixed assets were fully disposed of by 2025, removing any tangible collateral value. Current liabilities are high relative to current assets, reflecting liquidity stress. No long-term finance lease obligations remain as of 2025, but this is due to asset disposals rather than improved position.

3. Cash Flow Assessment:
   Cash reserves fell sharply from nearly £60k in 2024 to just £6.5k in 2025, indicating significant cash burn or repayment of liabilities without replenishment. Debtors also decreased substantially, suggesting reduced sales or collection challenges. The company’s working capital is negative and worsening, indicating strained day-to-day liquidity. Without positive cash flows or external injection, the business may struggle to meet short-term obligations.

4. Monitoring Points:

• Monitor cash balances and working capital closely for any further deterioration.
• Track changes in creditors, especially if suppliers extend or restrict credit.
• Review any forthcoming accounts or management commentary for signs of turnaround or restructuring plans.
• Watch for director actions or related party transactions that might impact financial stability.
• Verify if additional capital injections or loans are planned to restore solvency.