ALAN HIGGS ARCHITECTS LIMITED

Executive Summary

ALAN HIGGS ARCHITECTS LIMITED currently maintains a sound financial position with strong liquidity and positive net assets typical for a micro-entity. However, a significant increase in short-term liabilities and a decline in net assets indicate emerging risks that require vigilant management. Proactive steps to control liabilities and strengthen profitability will help ensure ongoing financial health and operational stability.

ALAN HIGGS ARCHITECTS LIMITED - Analysis Report

Company Number: 13241312

Analysis Date: 2025-07-20 17:49 UTC

Financial Health Assessment Report for ALAN HIGGS ARCHITECTS LIMITED

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1. Financial Health Score: C

Explanation:
The company demonstrates a stable but modest financial position typical of a micro-entity in the architectural sector. The financials show a solid positive net asset base and healthy working capital, but a recent increase in short-term liabilities and some decline in net assets compared to prior years suggest emerging caution signs. The grade "C" reflects a generally sound but cautious outlook that requires monitoring and proactive management to ensure continued financial wellness.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Fixed Assets	£3,723	Minimal investment in long-term assets, typical for a service business with limited physical capital.
Current Assets	£195,976	Strong liquidity position with cash, receivables, or equivalent current assets.
Current Liabilities	£104,422	Noticeable increase compared to previous year; short-term obligations have risen significantly.
Net Current Assets	£91,554	Positive working capital indicates ability to cover short-term debts; however, it has declined from £103,828 in 2023.
Net Assets (Shareholders’ Funds)	£95,277	Positive equity base, though reduced from £108,274 in 2023, signaling some erosion in retained funds.
Share Capital	£1.00	Nominal share capital, typical for micro companies; equity mainly built through retained earnings.
Average Number of Employees	1	Very lean operation, owner-managed, low overheads but limited capacity for scale or diversification.

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3. Diagnosis

The company exhibits "healthy cash flow" signals with a robust level of current assets that comfortably exceed current liabilities, ensuring liquidity to meet immediate obligations. The positive net current assets and net assets reflect a stable financial foundation without immediate distress symptoms.

However, the significant rise in current liabilities from around £59k in 2023 to £104k in 2024 is a "symptom of financial strain" that may reduce operational flexibility if not managed carefully. The approximately 12% drop in net assets signals some retained earnings are being consumed or liabilities growing faster than assets, which could be an early warning of "financial fatigue."

The minimal fixed asset base and single-employee operation reflect a business model reliant on intellectual or professional services rather than capital intensity. This can be beneficial for agility but also means limited collateral for external financing.

Overall, the company remains solvent with no signs of immediate "financial infection" (insolvency risk) but shows early "symptoms" that warrant monitoring, especially the rising short-term debt levels.

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4. Recommendations

• Manage and Reduce Current Liabilities: Review outstanding short-term debts and implement stricter payment terms or negotiate extensions to avoid liquidity crunches.
• Strengthen Cash Reserves: Maintain or improve current asset levels to ensure a comfortable liquidity buffer, especially given the rise in liabilities.
• Monitor Profit Retention: Investigate causes of net assets decline; focus on improving profitability and retaining earnings to rebuild equity.
• Cost Control: With only one employee (the director), ensure operating costs are tightly controlled to preserve margins.
• Plan for Growth Prudently: If expansion is intended, consider incremental hiring or capital investments while ensuring financial stability.
• Regular Financial Reviews: Establish quarterly financial health checks to detect early warning signs and act promptly.

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