BEAUTY BY NILAM LTD

Executive Summary

BEAUTY BY NILAM LTD is financially stable with positive equity and working capital, indicating a healthy operational condition. The company should focus on cash flow monitoring and prudent growth to maintain financial wellness in a competitive beauty treatment market. Overall, the business exhibits sound financial "vital signs" with manageable risks.

BEAUTY BY NILAM LTD - Analysis Report

Company Number: 13970268

Analysis Date: 2025-07-19 12:54 UTC

Financial Health Assessment for BEAUTY BY NILAM LTD

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1. Financial Health Score: B

Explanation:
BEAUTY BY NILAM LTD demonstrates a stable and improving financial position with positive net assets and net current assets across the most recent four years. The company maintains a healthy cash reserve relative to its current liabilities, indicating good liquidity and ability to meet short-term obligations. However, the relatively small scale of assets and equity, consistent but modest growth, and absence of detailed profitability data suggest room for improvement and monitoring, hence a solid B grade.

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2. Key Vital Signs

Metric	2025 (£)	Interpretation
Current Assets	19,960	Mostly cash, indicating liquidity but a decrease from previous years; watch cash flow trends.
Current Liabilities	9,669	Manageable level of short-term debts relative to assets.
Net Current Assets (Working Capital)	10,291	Positive working capital implies the company can comfortably cover short-term liabilities.
Net Assets (Equity)	10,291	Positive and increasing, showing retained profits and financial stability.
Shareholders' Funds	10,291	Equity capital is stable and growing, reflecting reinvestment or retained earnings.
Number of Employees	1	Very small operation consistent with micro/small company profile.

Additional Notes:

• The company is categorised under SIC code 96020 (Hairdressing and other beauty treatment), a service industry with typically low fixed asset intensity.
• The company's director is also the principal shareholder with full control, which can streamline decision-making but also concentrates risk.
• No audit required due to small company exemption, so financial data is based on unaudited filings but compliant with reporting standards.

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3. Diagnosis: Financial Condition Overview

BEAUTY BY NILAM LTD shows clear "healthy cash flow" signs, with cash as the dominant current asset and a buffer of net current assets well above liabilities. This "healthy pulse" indicates the business is solvent and operating without liquidity distress. The steady increase in net assets from £8,266 in 2022 to £10,291 in 2025 reflects retained earnings growth and prudent financial management.

However, the significant drop in cash from £54,089 in 2024 to £19,960 in 2025 warrants attention as a "symptom" that cash outflows might be rising or revenues fluctuating, necessitating cash flow monitoring. The company’s small scale and single-employee structure imply limited operational complexity but also limited diversification of risk.

No signs of "financial distress" such as negative working capital, excessive liabilities, or shareholder equity erosion are present. The company remains compliant with filing deadlines and statutory requirements, indicating good governance.

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4. Recommendations: Actions to Enhance Financial Wellness

• Cash Flow Management: Implement detailed cash flow forecasting to understand the causes of cash reduction and ensure cash reserves remain sufficient to meet ongoing obligations and potential growth needs.
• Revenue Diversification: Explore opportunities to expand client base or service offerings within the beauty treatment sector to reduce dependency on a narrow revenue stream.
• Cost Control: Maintain tight control on operating expenses, especially given the small scale, to preserve profitability and cash reserves.
• Financial Reporting: Even though audit exemption applies, consider periodic internal reviews or engagement with an accountant to verify financial data accuracy and uncover cost-saving or tax planning opportunities.
• Business Continuity: Given the concentrated ownership and management, develop contingency plans for business continuity in case of director unavailability.
• Growth Planning: Monitor market conditions and prepare strategic plans for scaling operations cautiously to avoid overextension of financial resources.

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