GEM PROJECT CONSULTANCY LIMITED

Executive Summary

Gem Project Consultancy Limited is a newly established small private company with persistent negative net assets and working capital deficits, indicating weak financial health and limited ability to service debts. Despite a slight increase in cash reserves, its current liabilities remain higher, posing liquidity risks. Credit approval is not advisable until the company demonstrates improved profitability, stronger equity, and sustainable cash flows.

GEM PROJECT CONSULTANCY LIMITED - Analysis Report

Company Number: 14223475

Analysis Date: 2025-07-29 16:09 UTC

1. Credit Opinion: DECLINE

Gem Project Consultancy Limited shows a weak financial position with negative net assets of £1,795 as at 31 March 2024, worsening from a marginal positive position in the prior year. The company’s current liabilities exceed current assets, resulting in negative working capital. The business is relatively new, incorporated in 2022, and has reported losses without building equity. Its ability to generate sufficient cash flows to meet debt obligations or sustain operations is questionable at this stage. There is no evidence of profitability or financial stability, and the company is operating with a very limited asset base and minimal cash reserves. Given these factors, approval for new or increased credit facilities is not recommended without substantial improvement in financial performance and capitalization.

2. Financial Strength

The balance sheet highlights negative net assets of £1,795 as at the latest year-end, indicating insolvency on a balance sheet basis. Current liabilities (£11,684) mainly consist of taxation and social security obligations which are due within one year, while current assets are limited to cash of £9,889. The company’s share capital is nominal (£1), and accumulated losses have eroded equity. There are no fixed assets reported, reflecting limited tangible security. The negative shareholders’ funds and working capital deficit underline weak financial strength and vulnerability to liquidity pressures.

3. Cash Flow Assessment

Cash balances increased from £543 in 2023 to £9,889 in 2024, which is a positive sign but still insufficient relative to liabilities. The company’s current liabilities exceed its liquid assets, implying potential cash flow stress in meeting short-term obligations. No profit and loss account details are provided, but the continued negative net assets and accumulated losses suggest operating cash outflows or insufficient operating income. Working capital management is a concern, and the company likely depends on external funding or shareholder support to sustain operations.

4. Monitoring Points

• Track quarterly liquidity ratios, particularly current ratio and quick ratio, to monitor improvements or deterioration in short-term financial health.
• Monitor profitability metrics and cash flow from operations to assess if the company can move toward positive earnings and self-sufficiency.
• Watch for timely payment of tax and social security liabilities to avoid penalties or enforcement actions.
• Review any changes in capital structure or shareholder injections that may enhance equity base.
• Evaluate management’s strategic plans for business growth and risk mitigation given the specialized construction sector.