Company Number: 13099651

Analysis Date: 2025-07-20 14:50 UTC

1. Credit Opinion: DECLINE. SOFT WAX SOUNDS LTD shows very limited trading activity with a sharp decline in turnover from £1,161 in 2021 to only £418 in 2023, resulting in a loss in the latest year. The micro-entity has minimal assets and working capital, with net current assets dropping from £381 in 2022 to £15 in 2023. No staff are employed, and there is no evidence of operational scale or financial resilience to support debt servicing. The director’s occupation as a teacher suggests the business may be a small side venture with limited commercial focus. Given the lack of profitability, minimal liquidity, and absence of significant assets, the company is not creditworthy for lending or commercial credit facilities.

2. Financial Strength: The balance sheet is extremely weak, with net assets of only £15 as at 31 December 2023, down from £381 the previous year. Fixed assets are zero, indicating no capital investment. Current assets have decreased drastically, showing a near depletion of working capital. No liabilities are recorded, so the company is not leveraged, but this is due to lack of borrowing rather than strong equity. Share capital is nominal at £2, highlighting minimal financial backing. The company’s micro status and lack of meaningful financial resources limit its ability to absorb shocks or invest for growth.

3. Cash Flow Assessment: The company’s cash and current assets have dwindled from £381 to £15, indicating severe liquidity constraints. With turnover under £500 in the last year and no staff or apparent operational scale, cash inflows are negligible. No creditors are listed, implying either no trade credit or minimal business activity. The company incurred a loss of £366 in 2023, further eroding reserves and cash. Working capital is positive but minimal, insufficient to cover any unforeseen expenses or support expansion. Overall, cash flow is weak and unreliable.

4. Monitoring Points:

• Monitor turnover trends closely for any signs of business revival or further decline.
• Watch net current assets and cash position to detect worsening liquidity.
• Assess director involvement and business strategy changes that could impact financial health.
• Review any new filings or financial statements for improvements or further deterioration.
• Check for any external funding or capital injections that might strengthen the balance sheet.