Company Number: 12937163

Analysis Date: 2025-07-29 17:39 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   CJM Aesthetics Ltd shows modest but improving financial health, with net assets rising from £305 in 2023 to £586 in 2024. However, current liabilities exceed current assets in 2024, generating a negative working capital of £753, which poses short-term liquidity risk. The company’s ability to service debt is somewhat constrained by this liquidity position, though the director’s loan advances provide some informal financial support. Given the company’s young age (incorporated 2020) and limited scale, credit approval should be conditional on close monitoring of cash flow and prompt repayment of director loans or injection of working capital.

2. Financial Strength:
   The company’s net assets have improved steadily over the last three years, moving from negative equity in 2020 (-£1,555) to positive net assets in 2024 (£586), indicating a recovering balance sheet. Fixed assets are minimal (£1,653), consistent with the nature of the beauty treatment industry, and stock levels are stable at £5,000. The increase in deferred tax liability (£314) reflects timing differences but is not a major concern. The small share capital (£100) highlights a limited equity base. Overall, the financial structure is fragile but improving, with equity growth driven by retained earnings (£486 P&L reserve).

3. Cash Flow Assessment:
   Cash at bank declined from £6,708 in 2023 to £5,304 in 2024, despite an increase in debtors (£4,797) and stable stock levels. The current liabilities increased significantly to £15,854, mainly due to taxation and social security liabilities (£14,634), indicating potential timing issues with tax payments. The negative net current assets position highlights working capital pressure and potential cash flow constraints. The director’s loan balance has reduced substantially (£4,160 owed by director), suggesting some internal funding support but also the need for formal financing arrangements to improve liquidity.

4. Monitoring Points:

• Liquidity metrics: Watch current ratio and quick ratio for improvement to ensure short-term obligations can be met.
• Taxation liabilities: Monitor the build-up of tax and social security creditors to avoid enforcement action.
• Director’s loan repayments or capital injections: Assess ongoing support levels to ensure sustainable funding.
• Profitability trends: Review future P&L statements to confirm continued equity growth and cash generation.
• Working capital management: Track debtor collection and stock turnover efficiency to reduce cash conversion cycle.