EVMAX LTD

Executive Summary

EVMAX LTD is currently showing signs of financial distress, with liabilities exceeding assets and significant liquidity pressure. Immediate action on cash flow management, cost control, and liability restructuring is critical to stabilizing the business. Without intervention, the company risks further decline, but with proactive measures, recovery is possible.

EVMAX LTD - Analysis Report

Company Number: 13121745

Analysis Date: 2025-07-20 14:09 UTC

Financial Health Assessment Report for EVMAX LTD

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1. Financial Health Score: D

Explanation:
EVMAX LTD’s financial position shows concerning signs resembling symptoms of stress or early-stage illness in corporate health. The company has slipped from a modestly positive net asset position in 2023 to a negative net asset position in 2024, indicating a deterioration in financial health. The current liabilities now exceed current assets significantly, suggesting liquidity pressures. This grade reflects a business that is currently struggling but not yet in critical condition, requiring urgent intervention to avoid further decline.

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2. Key Vital Signs

Metric	2024 Value (£)	2023 Value (£)	Interpretation
Current Assets	1,223	2,316	Cash and short-term resources have decreased notably, a warning sign for liquidity.
Current Liabilities	2,994	762	Short-term debts have nearly quadrupled, indicating increased financial obligations.
Net Current Assets (Working Capital)	-1,771	1,554	Negative working capital indicates the company may struggle to meet short-term obligations.
Net Assets (Equity)	-1,771	1,554	Negative net assets reveal the company’s liabilities exceed its assets, a symptom of financial distress.
Share Capital	100	100	Minimal equity base, typical for micro companies but limits financial shock absorption.
Average Employees	1	0	Small workforce, possibly limiting operational scalability but controlling costs.

Interpretation of Vital Signs:

• The sharp increase in current liabilities coupled with a reduction in current assets is a key symptom of liquidity strain.
• Negative net assets suggest accumulated losses or increased debts, resembling an ailing patient’s vital signs deviating from the healthy range.
• The company’s small size and limited equity restrict its ability to absorb shocks or invest in growth without external support.

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3. Diagnosis

EVMAX LTD is experiencing a financial condition that could be described as "financial distress." The company’s balance sheet reveals it is currently operating with liabilities exceeding assets, a classic symptom of insolvency risk if the trend continues. The rise in short-term liabilities by nearly four times in one year is particularly concerning and may be due to unpaid bills, loans, or accrued expenses. The drop in current assets suggests cash flow constraints or reduced receivables/inventory.

The company’s micro entity status and single-employee operation imply a very lean business model, but the financial deterioration indicates underlying operational or financial management challenges. Without corrective action, this negative balance sheet position could lead to creditor pressure, difficulties in securing financing, or even risk of insolvency proceedings in the future.

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4. Recommendations

To improve the financial wellness of EVMAX LTD, consider the following specific actions:

1. Cash Flow Management:
   Implement strict cash flow controls to monitor incoming and outgoing funds daily. Prioritize collecting receivables promptly and negotiate extended payment terms with creditors to relieve short-term pressure.

2. Liability Reduction:
   Explore options to restructure or refinance current liabilities to spread out repayment, reducing the burden on working capital.

3. Cost Control & Revenue Growth:
   Review operational costs critically, considering whether any expenses can be reduced or deferred without harming business operations. Simultaneously, pursue new contracts or clients aggressively to increase revenue.

4. Equity Injection:
   If possible, inject additional capital into the business to strengthen the equity base, improve net assets, and provide a buffer against financial shocks.

5. Financial Reporting and Forecasting:
   Establish regular financial reporting and forecasting routines to detect early symptoms of distress and respond proactively.

6. Seek Professional Advice:
   Given the warning signs, consultation with a financial advisor or insolvency practitioner might be wise to assist with turnaround strategies before the situation worsens.

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