EXTEND-ABLE ARCHITECTS LIMITED

Executive Summary

EXTEND-ABLE ARCHITECTS LIMITED shows improvement in net assets and reduction in liabilities indicating a recovering financial position. However, persistent negative working capital and declining cash reserves signal liquidity challenges that require active management. With prudent financial controls and strategic focus, the company can strengthen its financial health and sustain its growth trajectory.

EXTEND-ABLE ARCHITECTS LIMITED - Analysis Report

Company Number: 13643681

Analysis Date: 2025-07-20 14:11 UTC

Financial Health Assessment of EXTEND-ABLE ARCHITECTS LIMITED

---

1. Financial Health Score: C+

Explanation:
The company shows some signs of recovery and improvement in net assets over the last two years, moving from a precarious position into modest positive equity. However, persistent net current liabilities (negative working capital) indicate ongoing liquidity strain, suggesting the company is somewhat unwell but not critically ill. The modest asset base and limited cash reserves warrant cautious optimism but also signal the need for strategic financial management.

---

2. Key Vital Signs

Metric	2024 Figure	Interpretation
Net Assets	£3,371	Positive but modest equity indicates small buffer against losses. Improvement from £244 in 2023 is a good sign.
Net Current Assets (Working Capital)	(£357)	Negative working capital indicates a liquidity crunch risk; current liabilities exceed current assets.
Cash Holdings	£6,258	Reasonable cash buffer for a small company, but declined from £8,415 in 2023; watch cash burn carefully.
Current Liabilities	£7,115	Reduced from £11,043 in 2023, showing improvement in short-term obligations.
Tangible Fixed Assets	£3,728	Increasing fixed assets imply investment in equipment or infrastructure, potentially for growth.
Director's Remuneration	£9,100	Steady remuneration; manageable given company size.
Loans from Related Parties	£0	Previously outstanding director loans fully repaid, improving balance sheet health.

---

3. Diagnosis: Financial Symptoms and Underlying Health

• Liquidity Strain: The company exhibits symptoms of distress through its negative net current assets across all years reviewed. Although improved in 2024, this indicates the business currently owes more short-term liabilities than it holds in short-term assets, a classic sign of liquidity pressure. If unchecked, this could lead to difficulties in meeting day-to-day obligations.

• Solvency Status: Net assets have improved significantly from a low base, reflecting efforts to strengthen equity, possibly from retained earnings or capital contributions. This indicates the business is not insolvent but remains vulnerable due to limited equity cushion.

• Cash Flow Health: Cash reserves have decreased by approximately £2,157 from 2023 to 2024, which is a mild warning signal. Cash flow appears tight but not critical at present. The absence of director loans in 2024 (fully repaid) is a positive development, removing a potential dependency on personal funds.

• Asset Investment: The company has expanded its tangible assets, suggesting reinvestment for future operations or growth initiatives. This is a healthy sign if funded sustainably.

• Size and Scale: As a small private limited company with only one employee (the director), the business is lean but potentially limited in capacity—this may restrict rapid scaling but also keeps overheads low.

• Governance and Control: The sole director and significant controller, Benedict John Corrie, maintains full control, simplifying decision-making but concentrating risk.

---

4. Recommendations: Prescriptions for Financial Wellness

1. Improve Working Capital Management:

   • Accelerate debtor collections and negotiate extended payment terms with creditors to improve liquidity.
   • Explore short-term financing solutions if necessary to cover cash flow gaps but avoid excessive borrowing.

2. Monitor Cash Flow Diligently:

   • Maintain a rolling cash flow forecast to anticipate shortfalls and manage burn rate.
   • Avoid large discretionary expenses until liquidity improves.

3. Leverage Asset Investments:

   • Ensure tangible asset investments are generating returns—consider asset utilization reviews.
   • If assets are underused, consider leasing or selling non-essential equipment to improve cash reserves.

4. Build Equity Buffer:

   • Retain earnings where possible rather than distributing dividends to strengthen the capital base.
   • Consider additional equity injection if growth opportunities require more capital.

5. Maintain Tight Cost Control:

   • Keep overheads minimal and monitor director remuneration against company profitability.
   • Explore efficiency improvements, especially given the single-employee structure.

6. Strategic Growth Planning:

   • Develop a clear pipeline of projects or contracts to ensure steady revenue inflows.
   • Consider partnerships or collaborations to scale capacity without significant fixed cost increases.

---

Medical Analogy Summary

EXTEND-ABLE ARCHITECTS LIMITED currently exhibits "symptoms of financial distress" primarily due to liquidity constraints (negative working capital) but shows signs of a "recovering financial pulse" with improved net assets and reduced liabilities. The company is not in critical condition but requires "ongoing care" through vigilant cash flow management and working capital optimisation to avoid relapse into deeper financial strain.

---