GEMS AUTOS LTD

Executive Summary

GEMS AUTOS LTD has a weak financial foundation characterized by growing net liabilities and persistent negative working capital, indicating poor repayment capacity. The company’s very limited current assets and escalating liabilities raise significant liquidity concerns. Given these factors, credit extension is not recommended without substantial evidence of financial recovery or external support.

GEMS AUTOS LTD - Analysis Report

Company Number: 13604932

Analysis Date: 2025-07-20 14:21 UTC

1. Credit Opinion: DECLINE
   GEMS AUTOS LTD exhibits persistent and increasing net liabilities over the past three years, with negative net current assets and shareholders’ funds deteriorating from -£4,882 in 2021 to -£6,516 in 2024. The company shows no signs of profitability or asset growth, and its working capital position is weak with current liabilities far exceeding current assets. This financial profile indicates a poor capacity to meet debt obligations or absorb financial shocks, making extension of credit facilities highly risky.

2. Financial Strength:
   The company’s balance sheet reveals significant weakness. The net liabilities position and negative shareholders’ funds reflect accumulated losses and a lack of equity buffer. Fixed assets appear negligible or non-existent, and current assets are minimal (£1,027 in 2024) against current liabilities of £6,943. The company’s micro-entity reporting and minimal employee base (average 1 employee) suggest a very small scale operation with limited financial resources or growth capital.

3. Cash Flow Assessment:
   Cash and liquid assets are severely limited (£1,027 current assets including cash of £238 in prior years), insufficient to cover short-term liabilities, indicating cash flow constraints. The negative net current assets position points to ongoing liquidity pressure and potential difficulties in meeting short-term creditor demands. Without improvement, the company is at risk of insolvency or forced restructuring.

4. Monitoring Points:

• Monitor changes in net current assets and net liabilities for signs of stabilization or improvement
• Watch for any increase in cash balances or current assets relative to liabilities
• Track turnover and profitability data once available to assess operational viability
• Scrutinize director commentary or restructuring plans for signs of financial turnaround
• Review credit terms and supplier relationships for signs of tightening due to financial stress