LUXURIOUS NAILS LTD

Executive Summary

Luxurious Nails Ltd demonstrates significant solvency and liquidity risks due to persistent negative net assets and reliance on director loans. However, improved cash balances and regulatory compliance provide some operational stability. Detailed cash flow analysis and scrutiny of related-party funding are recommended to evaluate the company’s viability and financial resilience.

LUXURIOUS NAILS LTD - Analysis Report

Company Number: 13953309

Analysis Date: 2025-07-20 14:48 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency concerns due to consistent negative net assets and shareholders' funds over multiple years. Its liabilities substantially exceed its assets, indicating an ongoing capital deficit.

2. Key Concerns:

• Negative Net Assets and Shareholders' Funds: The company has reported net liabilities of £15,099 as of 31 March 2025, improving from £34,743 the previous year but still significantly negative. This persistent deficit signals solvency risk.
• High Current Liabilities vs. Low Current Assets: Current liabilities stand at £64,286 compared to current assets of £31,338, resulting in a negative working capital of -£32,948. This mismatch suggests liquidity constraints and potential difficulties in meeting short-term obligations.
• Reliance on Director’s Loan Account: A significant liability (£62,319) is owed to the director, which may indicate reliance on related-party funding rather than external financing or operational cash flow, posing risks if the director withdraws support.

3. Positive Indicators:

• Increase in Cash Position: Cash at bank increased markedly from £50 in 2024 to £31,338 in 2025, which could alleviate immediate liquidity pressure.
• Active Status and Compliance: The company is active with no overdue filings for accounts or confirmation statements, indicating good compliance and governance practices.
• Experienced Single Director and PSC: The sole director and person with significant control is British and actively involved, which can facilitate swift decision-making.

4. Due Diligence Notes:

• Review the cash flow statements and management accounts to assess operational cash generation and sustainability beyond the snapshot of year-end balances.
• Investigate the nature and terms of the director’s loan account, including repayment schedules and any interest payable, to understand the risk of this funding source being withdrawn.
• Evaluate business plans or forecasts that address the company’s path to profitability and capital restoration given the ongoing deficits.
• Confirm if there are any contingent liabilities or off-balance-sheet obligations not reflected in these accounts.
• Assess whether the company has access to external financing or credit facilities to support operations and growth.