Company Number: 14718049

Analysis Date: 2025-07-29 19:11 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   AA SOLVE LTD is a very young company (incorporated in 2023) operating in specialized engineering consultancy activities. It has demonstrated moderate growth in current assets and net current assets over a two-year period, indicating improving liquidity. However, the current liabilities have increased sharply in the latest year, particularly taxation and social security liabilities, which may suggest a higher short-term cash outflow risk. The absence of an audit and limited financial history require cautious credit exposure with monitoring. Approval is recommended with conditions on credit limits aligned with working capital size and requiring updated financials and cash flow monitoring.

2. Financial Strength
   The balance sheet shows modest but improving net current assets (£15,444 in 2025 vs. £6,266 in 2024), with shareholders’ funds increasing from £6,266 to £15,444. The company is fully equity funded with no long-term debt reported. Current assets rose significantly to £49,782, primarily from trade debtors (£27,454) and cash (£22,328). However, current liabilities increased disproportionately to £34,338 driven by tax and social security payables (£22,740), indicating potential timing issues or accruals that require investigation. Overall, financial strength is moderate with no gearing but limited scale.

3. Cash Flow Assessment
   Cash at bank has increased to £22,328, which is a positive liquidity indicator. However, the rise in current liabilities, especially tax-related, could pressure short-term cash flows. Trade debtor levels are notable and need prompt collection to maintain liquidity. Net current assets remain positive, reflecting adequate working capital to meet liabilities due within one year. Given the small size and early stage, cash flow stability depends heavily on timely debtor collections and managing creditor payments.

4. Monitoring Points

• Current liabilities trend, especially tax and social security obligations, to prevent liquidity strain.
• Debtor ageing and collection effectiveness to ensure working capital sufficiency.
• Profitability and cash generation in forthcoming financial statements to assess operational viability.
• Any changes in director or ownership structure that may impact governance or credit risk.
• Compliance with filing deadlines and potential requirement for audit as business grows.