THE SALES ARCH LTD

Executive Summary

The Sales Arch Ltd exhibits sufficient liquidity and positive net assets for its size but faces increased short-term liabilities, notably tax-related. While cash reserves are healthy, declining shareholder funds call for caution. Conditional credit approval is recommended with ongoing monitoring of working capital and profitability metrics.

THE SALES ARCH LTD - Analysis Report

Company Number: 12767035

Analysis Date: 2025-07-29 15:15 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   The Sales Arch Ltd demonstrates a positive net current asset position and modest shareholder funds, indicating basic financial stability. However, the substantial increase in current liabilities from £5,324 in 2023 to £22,235 in 2024, primarily in taxation and other creditors, raises concerns about short-term financial pressures. The company is relatively young and small, with limited fixed assets and no employees. Continued monitoring of liquidity and creditor management is advised before extending additional credit.

2. Financial Strength:
   The balance sheet shows total shareholders’ funds reduced from £13,646 in 2023 to £9,130 in 2024, reflecting a decline in retained earnings or profitability. Fixed assets have decreased slightly, and cash balances have increased to £30,747, which supports liquidity. The rise in current liabilities, especially tax obligations (£8,157 in 2024), suggests potential timing issues in meeting liabilities. Overall, the company has a modest equity base and limited asset coverage but remains solvent.

3. Cash Flow Assessment:
   Cash at bank increased by over £12,000 year-on-year, indicating improved cash generation or capital injection. Net current assets remain positive at £8,512, though down from £12,873 the prior year, largely due to increased creditors. The company has no employees, which limits fixed overhead costs but may also constrain growth. Working capital management needs attention given the rise in short-term payables, especially tax liabilities.

4. Monitoring Points:

• Monitor trends in current liabilities, particularly tax and other creditor balances, to ensure no liquidity strain.
• Track profitability and retained earnings to assess whether equity erosion continues.
• Review cash flow generation from operations once turnover data becomes available, given the absence of income statement disclosure.
• Observe any changes in director control or company structure that may affect governance.