Company Number: 13135310

Analysis Date: 2025-07-29 14:45 UTC

1. Credit Opinion: DECLINE
   Empress Wax Ltd exhibits a concerning financial position with net current liabilities (negative working capital) of approximately £22,794 as of January 2024, worsening from prior years. The balance sheet shows negative net assets of the same amount, indicating liabilities exceed current assets. Although it is a micro-entity with limited scale, the persistent negative net working capital suggests potential liquidity issues and limited buffer to meet short-term obligations. The business is relatively new (incorporated 2021) and still small with just one employee. The director is also the majority shareholder, which can sometimes concentrate risk. Without significant improvements in liquidity or external support, the company’s ability to service additional credit is doubtful.

2. Financial Strength:
   The company shows negative net current assets (liabilities) consistently over the last three reported years, deteriorating from -£16,270 in 2021 to -£22,794 in 2024. Total net assets are negative and equal to the net current liabilities figure, reflecting the absence of fixed assets or longer-term investments. Share capital is nominal (£1), and shareholders' funds are negative, confirming that accumulated losses or creditor claims outweigh the company’s resources. This weak capital structure and lack of tangible asset backing diminish financial resilience.

3. Cash Flow Assessment:
   Current assets are modest (£13,654) and primarily likely to be cash or receivables, but current liabilities are nearly three times higher (£36,448). This imbalance points to ongoing working capital deficiency. The company’s single-employee structure and micro-entity status limit complexity but also suggest limited operational scale to generate strong cash inflows. Without evidence of strong cash generation or external financing, liquidity risk is high.

4. Monitoring Points:

• Monitor quarterly cash flows and current liability trends to detect worsening liquidity.
• Track receivables and payables aging to assess working capital management efficiency.
• Review any changes in ownership or director involvement that could impact governance and credit risk.
• Watch for filings of subsequent accounts and confirmation statements for timely compliance.
• Observe market conditions in the niche retail sector (wax melts and gifts) for demand shifts.