GM GLOBAL CONSULTANCY LTD

Executive Summary

GM GLOBAL CONSULTANCY LTD is a newly incorporated micro-entity showing early financial strain with negative net assets and working capital deficit, typical for start-ups. While the company currently faces liquidity challenges, careful cash flow management and focused revenue generation can improve its financial health over the coming year.

GM GLOBAL CONSULTANCY LTD - Analysis Report

Company Number: 15222589

Analysis Date: 2025-07-29 19:47 UTC

Financial Health Assessment Report for GM GLOBAL CONSULTANCY LTD

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1. Financial Health Score: D

Explanation:
GM GLOBAL CONSULTANCY LTD is a very young micro-entity (incorporated in Oct 2023) with its first financial statements filed for the year ended 31 October 2024. The financials show a net liability position (£-5,434), indicating that liabilities exceed current assets. This negative net asset position is a key warning sign or “symptom of distress.” Given the company’s early stage and small scale, this is not uncommon but warrants attention.

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2. Key Vital Signs

Metric	Value	Interpretation
Company Age	~1 year	Start-up phase, still establishing financial footing
Company Category	Micro-entity	Minimal filing requirements, small scale
Fixed Assets	£0	No long-term investments/assets yet
Current Assets	£0	No cash or receivables recorded
Prepayments and Accrued Income	£20,966	Payments made or income earned but not yet realized
Current Liabilities	£26,400	Debts due within one year, moderate relative to size
Net Current Assets	-£5,434	Working capital deficit; liabilities exceed current assets
Net Assets / Shareholder Funds	-£5,434	Negative equity; company owes more than it owns
Employees	1	Very lean operation, low overhead
Control	75-100% by Director	Single controlling shareholder and director

Interpretation:

• The negative net assets ("financial anemia") suggest the company is currently undercapitalized or has incurred early losses.
• Prepayments and accrued income being relatively high might indicate some initial investments or contracts in progress.
• Lack of fixed assets is typical for a consultancy start-up relying on intellectual capital rather than physical assets.
• Current liabilities exceed current assets, a “symptom of liquidity stress,” meaning the company may struggle to meet short-term obligations without new cash inflows.
• The company is controlled entirely by one individual, reflecting a typical single-owner structure but also concentration risk.

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3. Diagnosis

GM GLOBAL CONSULTANCY LTD is in the nascent stage of its business lifecycle, reflected by its incorporation less than a year ago and micro-entity status. The financial statement reveals early “symptoms” of financial strain:

• Negative shareholders’ funds indicate the company is effectively “in the red,” which is common for start-ups as they invest in establishing operations and incur initial costs before generating revenue.
• The deficit in net current assets signals potential cash flow challenges; the company may not have sufficient liquid resources to cover immediate liabilities without external funding or increased revenue.
• The absence of fixed assets aligns with the nature of consultancy businesses, which rely on human capital rather than physical assets.
• The presence of prepayments/accrued income suggests some contracts or advance payments, which could convert into cash flows if managed well.

Overall, the company shows “early-stage weakness,” requiring careful cash flow management and possibly capital infusion to stabilize.

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4. Recommendations

To improve financial wellness and strengthen the company’s financial health, the following steps are advised:

1. Improve Liquidity Position:

   • Monitor cash flow closely and ensure timely collection of receivables.
   • Limit discretionary spending until cash reserves strengthen.
   • Consider short-term financing options or capital injection from the shareholder if necessary.

2. Build Working Capital:

   • Aim to convert prepayments and accrued income into actual cash inflows.
   • Negotiate payment terms with creditors to extend current liabilities maturity if possible.

3. Focus on Revenue Generation:

   • Prioritize winning contracts and delivering consultancy services to generate positive cash flow.
   • Explore additional service lines under SIC codes (management consultancy and IT services) to diversify income.

4. Regular Financial Review:

   • Establish monthly financial monitoring to detect any “symptoms” of financial distress early.
   • Seek professional advice on tax planning and efficient bookkeeping.

5. Consider Formal Business Plan Update:

   • Outline clear milestones for profitability and capital needs.
   • Align shareholder expectations on funding and growth trajectory.

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