GMX NETWORK LTD

Executive Summary

GMX NETWORK LTD exhibits a fragile financial position characterized by a significant working capital deficit and minimal equity, raising concerns about its ability to meet short-term obligations. The company’s negative liquidity and limited operational scale suggest an elevated credit risk. Without clear improvement in cash flow or capital structure, credit facilities should not be extended at this time.

GMX NETWORK LTD - Analysis Report

Company Number: 13138285

Analysis Date: 2025-07-29 13:55 UTC

1. Credit Opinion: DECLINE
   GMX NETWORK LTD’s latest financials reveal a concerning liquidity position with current liabilities (£194,669) vastly exceeding current assets (£27,203), resulting in a significant working capital deficit. The company’s minimal shareholders’ funds (£412) and a sharp decrease from the previous year’s £1,721 equity indicate weak financial resilience. Additionally, the absence of employees and reliance on fixed assets without corresponding current asset coverage raise doubt about its operational cash flows and ability to meet short-term obligations. Given these factors, the company currently lacks the financial strength and cash flow stability necessary to service new or existing credit facilities.

2. Financial Strength:
   The balance sheet shows an increase in fixed assets from £30,091 to £168,920, suggesting capital investment or asset acquisition. However, this has not translated into improved liquidity or net equity, which remains marginal. The company’s equity has eroded significantly, and reliance on creditors to finance operations is high. The capital structure indicates vulnerability to financial stress, with minimal buffer against liabilities. The micro-entity status and exemption from audit limit transparency and external assurance, adding to credit risk.

3. Cash Flow Assessment:
   Current liabilities of £194,669 compared to current assets of £27,203 yield a negative net current assets position (~-£167,466), highlighting a severe working capital shortfall. This condition suggests the company may struggle to meet short-term liabilities as they fall due without additional funding or asset liquidation. Absence of employees and operational scale implies potential reliance on director funding or external credit. No evidence of cash or liquid assets to offset liabilities was disclosed, increasing risk of default on financial commitments.

4. Monitoring Points:

• Liquidity ratios (current ratio and quick ratio) to detect improvements or further deterioration in working capital.
• Changes in creditors and accruals levels, particularly the proportion of short-term liabilities.
• Equity movements and capital injections by the director or shareholders.
• Operational cash flows once available, to assess sustainability of the business model.
• Filing of subsequent accounts and confirmation statements to ensure compliance and transparency.