SOL ARCHITECTURE LIMITED

Executive Summary

SOL Architecture Limited is a small but growing architectural practice with improving net assets and stable liquidity. While current liabilities are adequately covered by cash and debtors, medium-term liabilities and provisions require monitoring. Given the company’s scale and limited operating history, credit should be extended cautiously with regular review of cash flow and profitability.

SOL ARCHITECTURE LIMITED - Analysis Report

Company Number: 14352865

Analysis Date: 2025-07-20 18:06 UTC

1. Credit Opinion: CONDITIONAL APPROVAL. SOL Architecture Limited is a newly established (incorporated in 2022) architectural design firm with a modest but improving financial position. The company shows positive net assets and shareholders’ funds growth from £17,450 in 2023 to £21,946 in 2024. However, the presence of medium-term creditors (£10,661 due after one year) and provisions (£7,315) requires caution. The company has no history of audit but files timely accounts and confirmation statements, which suggests compliance and transparency. Given the firm is small-scale with a single director/employee, credit exposure should be limited and monitored closely.

2. Financial Strength: The balance sheet shows a stable asset base with tangible fixed assets increasing significantly to £27,605 in 2024, mainly from additions of equipment and motor vehicles, indicating investment in operational capacity. Current assets are stable around £35-36k, with cash balances increasing slightly to £25,302. Current liabilities rose to £23,285 but remain covered by current assets, yielding positive net current assets of £12,317. The company’s net assets increased to £21,946, reflecting retained earnings growth. However, provisions and non-current liabilities totaling £17,976 reduce the net asset cushion. Overall, the company maintains a modest but positive equity position with evidence of reinvestment.

3. Cash Flow Assessment: Cash on hand and at bank (£25,302) comfortably covers current liabilities (£23,285), demonstrating adequate short-term liquidity. Debtors (£10,300) represent a reasonable conversion timeline given the sector, but the slight debtor decrease from prior year suggests stable collections. The increase in provisions and medium-term creditors suggests some liabilities are being deferred, which may impact future cash flows. With only one employee (the director) and no reported guarantees, operating cash flow risks appear contained but limited scale means cash flow volatility could impact creditworthiness.

4. Monitoring Points:

• Track the company’s ability to reduce provisions and medium-term creditors to improve long-term solvency.
• Monitor debtor days to ensure timely collections and avoid liquidity strain.
• Watch for sustained profitability since no income statement was filed; request management accounts if credit limits increase.
• Keep an eye on capital expenditure to ensure asset investments generate commensurate revenue growth.
• Confirm no director disqualifications or related-party transactions arise that could affect governance.