Company Number: 15168883

Analysis Date: 2025-07-20 18:06 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   PURITY SALONS LTD is a newly incorporated micro-entity operating in the niche beauty and hairdressing sector. The company demonstrates a modest asset base but currently shows net liabilities, primarily due to a significant long-term creditor balance (£95,000). The negative net asset position signals initial start-up losses or investment funding. Given its short trading history (under 1 year) and limited financial data, the credit risk is elevated. Approval is recommended with conditions: close monitoring of cash flows, timely servicing of creditor obligations, and updated financials in 12 months to assess operational sustainability and profitability trajectory.

2. Financial Strength:

• Fixed Assets: £48,149 — modest investment in long-term assets, likely equipment
• Current Assets: £10,443 — limited liquid resources
• Current Liabilities: £7,261 — manageable short-term obligations
• Creditors Due After 1 Year: £95,000 — large long-term liability impacting net worth
• Net Assets: -£45,904 — negative equity due to creditor funding exceeding asset base
  The balance sheet reveals a typical start-up financial structure with initial external financing or shareholder loans reflected as long-term creditors. The negative equity reduces cushion against adverse business conditions.

3. Cash Flow Assessment:

• Net Current Assets: +£3,182 — positive working capital indicating short-term liquidity is adequate to cover immediate liabilities
• Small number of employees (2) keeps fixed overhead low
• No audit required, so financial detail is limited, increasing uncertainty around cash inflows and operational margins
  Overall liquidity appears sufficient for near-term obligations, but the large long-term creditor figure necessitates verification that repayment terms are sustainable relative to business cash generation.

4. Monitoring Points:

• Monthly cash flow and working capital trends to ensure creditor payments and payroll commitments are met
• Profit and loss performance to track progress towards profitability and reduction of accumulated losses
• Changes in long-term liabilities or equity injections that affect leverage and solvency
• Timely filing of next annual accounts and confirmation statements to maintain compliance
• Any director or creditor changes that may impact governance or financial stability