INDULGENCE BEAUTY & HAIR SALON LTD

Executive Summary

Indulgence Beauty & Hair Salon Ltd shows encouraging financial improvement with a strong working capital position and positive net assets despite its micro-entity size and brief operational history. The company appears capable of meeting short-term obligations, supporting a credit approval with conditions to monitor ongoing cash flow and market risks. Continued vigilance is advised given the company’s small scale and sector volatility.

INDULGENCE BEAUTY & HAIR SALON LTD - Analysis Report

Company Number: 14313844

Analysis Date: 2025-07-29 20:57 UTC

1. Credit Opinion: APPROVE with conditions.
   Indulgence Beauty & Hair Salon Ltd demonstrates improving financial health with a significant increase in net current assets and shareholders’ funds over the past year. The company’s liquidity position is sound, and it maintains a positive net asset balance. However, as a micro-entity with a short trading history (just over 2 years) and a small team, the business is still vulnerable to economic shocks and competitive pressures in the beauty sector. Approval is recommended with monitoring of cash flow and revenue trends to ensure ongoing debt servicing capability.

2. Financial Strength:
   The balance sheet shows a strong upward trajectory. Net current assets improved from £1,381 in 2023 to £14,098 in 2024, indicating better working capital management and possibly increased business volume or improved collections. Total net assets equal net current assets, reflecting no long-term liabilities or fixed assets, which is typical for a micro-entity in this service sector. Shareholders’ funds increased correspondingly, signaling retained earnings or capital injection. The company’s capital structure is simple and debt-light, reducing financial risk.

3. Cash Flow Assessment:
   Current assets at £19,834 against current liabilities of £5,736 provide a current ratio of approximately 3.46, which is a healthy liquidity cushion for short-term obligations. The business employs around 4 staff, consistent with its size, and the increase in working capital suggests improved cash inflows or efficient management of payables and receivables. Without detailed cash flow statements, it is prudent to verify ongoing cash generation from operations and control of expenses to maintain this position.

4. Monitoring Points:

• Track revenue growth and profitability to confirm sustainable cash inflows.
• Monitor any changes in current liabilities or overdue payables that could strain liquidity.
• Review director changes or management decisions impacting financial policies.
• Watch for any significant capital expenditures or new debt that may alter financial risk.
• Keep an eye on sector-specific risks such as consumer demand shifts or regulatory changes affecting beauty services.