MOMENTUM ARCHITECTURE LTD

Executive Summary

Momentum Architecture Ltd currently faces significant financial distress marked by negative net assets and liquidity shortfalls. Immediate action to improve cash flow, reduce liabilities, and inject capital is essential to avoid insolvency risk and restore financial health. With focused management and financial restructuring, the company can stabilize and improve its outlook.

MOMENTUM ARCHITECTURE LTD - Analysis Report

Company Number: 13359217

Analysis Date: 2025-07-29 12:33 UTC

Financial Health Assessment for MOMENTUM ARCHITECTURE LTD

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1. Financial Health Score: D

Explanation:
The company exhibits signs of financial distress with a significant negative net asset position and net current liabilities exceeding current assets. While it remains active and compliant with filing deadlines, the balance sheet reflects an unhealthy financial state requiring urgent corrective measures.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Current Assets	99,583	Reasonable liquidity buffer
Current Liabilities	397,667	High short-term obligations
Net Current Assets	-298,084	Negative working capital indicates liquidity stress
Net Assets (Shareholders' Funds)	-300,084	Negative equity means liabilities exceed assets
Share Capital	1.00	Minimal paid-up capital
Number of Employees	1	Small operation, likely owner-managed

Interpretation:

• Liquidity ("Healthy cash flow"): The company has £99,583 in current assets but owes nearly £398k due within a year, creating a net current asset deficit of almost £300k. This is a critical symptom of cash flow strain and potential inability to meet short-term obligations without refinancing or asset sales.
• Solvency ("Balance sheet vitality"): Negative net assets indicate the company’s liabilities exceed its total assets by £300k. This is a serious symptom of financial distress, suggesting accumulated losses or unpaid debts.
• Growth and Scale: As a micro-entity with one employee and minimal share capital, the company is very small and likely dependent on the director’s involvement.

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3. Diagnosis

• Symptoms Analysis:
  The company’s financial statements reveal a troubling reversal from the prior year. In 2023, net assets were positive at £483,881, but by 2024 this shifted dramatically to a negative £300,084. This swing of nearly £800k suggests a large loss or write-down occurred during the year. The current liabilities remain very high relative to assets, indicating ongoing liquidity pressures.

• Underlying Causes:
  Given the negative equity and working capital deficit, it is likely the company has been accruing debt or experiencing operating losses without sufficient income or capital injections. The small scale and minimal share capital suggest limited buffer to absorb losses.

• Business Health:
  The financial "vital signs" indicate that Momentum Architecture Ltd is currently in a precarious financial condition. It is symptomatic of distress, with a risk of insolvency if corrective actions are not taken. The absence of an audit and reliance on micro-entity provisions limits detailed insight but the key indicators are concerning.

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4. Prognosis

If the company does not improve cash flow, reduce liabilities, or raise capital, the prognosis is poor. Without intervention, the risk of insolvency or forced liquidation increases. The director’s control and small operation size mean turnaround is possible but will require strategic financial restructuring.

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5. Recommendations

1. Urgent Cash Flow Management:

   • Develop a detailed cash flow forecast to identify short-term funding gaps.
   • Negotiate payment terms with creditors to extend liabilities and reduce immediate pressure.

2. Capital Injection:

   • Consider additional shareholder loans or equity investment to restore positive net assets and working capital.

3. Cost Control & Revenue Enhancement:

   • Evaluate operational costs to reduce overhead.
   • Pursue new contracts or clients aggressively to increase revenues and improve profitability.

4. Financial Monitoring & Reporting:

   • Implement monthly financial reviews to track liquidity and solvency metrics closely.
   • Consider voluntary audit or professional financial advice to improve transparency.

5. Director Involvement:

   • The director, Mr. James Geoffrey Sleep, should consider professional advice on restructuring options and insolvency risks to avoid personal liability.

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Medical Analogy Summary

Momentum Architecture Ltd is showing "symptoms of financial distress" akin to a patient with a failing heart—current liabilities overwhelming assets is like oxygen deprivation to vital organs. Immediate "treatment" focusing on boosting liquidity and reducing liabilities is needed to stabilize the company's financial "health." Without intervention, the prognosis is poor, but with proper care, recovery remains possible.

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