ATLANTIC DESIGN STUDIO LTD

Executive Summary

Atlantic Design Studio Ltd is a recently established architectural services company showing signs of financial strain due to rising liabilities and declining net assets, though it maintains positive working capital and cash reserves. The company’s small scale and single-director structure pose operational risks, while compliance and liquidity appear adequate at present. Further investigation into the increase in tax liabilities and overall profitability is recommended to gauge ongoing financial stability.

ATLANTIC DESIGN STUDIO LTD - Analysis Report

Company Number: 14368543

Analysis Date: 2025-07-29 13:33 UTC

1. Risk Rating: MEDIUM
   The company is very young (incorporated in late 2022) and operates in the architectural services sector. While it remains active and compliant with filings, its financial position shows a decline in net assets and increased current liabilities year-on-year, which warrants caution.

2. Key Concerns:

• Declining Net Assets and Working Capital: Net assets dropped from £10,042 in 2023 to £5,906 in 2024, and net current assets declined from £9,122 to £4,660. This erosion suggests either reduced profitability or increased liabilities, impacting solvency.
• Rising Current Liabilities, Particularly Tax and Social Security: Current liabilities doubled from £9,654 to £19,362, with taxation and social security liabilities constituting a large portion (£11,237 in 2024 vs. £7,487 in 2023). This may indicate cash flow pressure or delayed payments to HMRC.
• Small Scale and Single Director: The company has only one employee/director and minimal share capital (£1). This concentration of control and limited resources increases operational risk and dependency on the director’s capacity.

3. Positive Indicators:

• Positive Net Current Assets and Solvency: Despite the decline, net current assets remain positive (£4,660), indicating the company can meet short-term obligations at the reporting date.
• Consistent Compliance: No overdue filings for accounts or confirmation statements are noted, demonstrating good governance and compliance practices.
• Cash Position: Cash at bank increased from £13,889 to £21,598, which somewhat offsets the increase in liabilities and provides liquidity buffer.

4. Due Diligence Notes:

• Investigate the nature and cause of the increase in current liabilities, especially tax and social security amounts, to understand if these are timing issues or indicative of financial distress.
• Review the company’s profitability and cash flow statements (not provided) to assess sustainability and operational performance.
• Assess the director’s background and capacity to manage the business alone, including any related party transactions or reliance on external funding/loans.
• Confirm the absence of any contingent liabilities or off-balance sheet obligations that might impact solvency.
• Monitor subsequent filings and trading updates to detect any worsening trends or improvement.