ANOTHER WAVE C.I.C.

Executive Summary

ANOTHER WAVE C.I.C. demonstrates steady growth and maintains a healthy cash position, yet operates with very slim profit margins and minimal equity, indicating a vulnerable financial state. With focused efforts on revenue enhancement, cost control, and reserve building, the organization can strengthen its financial resilience and continue delivering valuable community services sustainably.

ANOTHER WAVE C.I.C. - Analysis Report

Company Number: 12689647

Analysis Date: 2025-07-20 16:15 UTC

Financial Health Assessment for ANOTHER WAVE C.I.C. (Period Ending 30 June 2024)

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1. Financial Health Score: C (Fair)

Explanation:
ANOTHER WAVE C.I.C. is operating with modest revenues and a small but positive net asset base. The company shows signs of sustainable activity but also experiences losses and tight working capital. The financial "vital signs" indicate a business that is stable but vulnerable, with limited financial reserves and narrow margins that require careful monitoring and management to avoid distress.

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2. Key Vital Signs

Vital Sign	Value (2024)	Interpretation
Turnover	£15,412	Modest revenue growth (+40% vs prior year), indicating some market traction and program expansion.
Gross Profit	£14,642	Healthy gross margin (95%), reflecting low cost of sales relative to turnover.
Operating Profit (Loss)	-£399	Small operating loss, showing expenses slightly outweigh income, signaling "symptoms of distress."
Net Assets (Shareholders' Funds)	£1,110	Positive but very limited equity, indicating a fragile financial cushion.
Current Assets	£26,260	Adequate short-term resources, mostly cash (£23,460), which is a healthy "cash flow pulse."
Current Liabilities	£25,150	Current liabilities nearly match current assets, resulting in a slim net working capital margin (£1,110).
Working Capital	£1,110	Positive but minimal, indicating limited buffer to cover short-term debts.
Cash Reserves	£23,460	Strong cash position relative to turnover, which supports liquidity and operational stability.

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3. Diagnosis: What the Financial Data Reveals

ANOTHER WAVE C.I.C. is a small community interest company focused on sports and recreation education, specifically surf and skate activities. The financials reveal a young organization still in its growth phase:

• Revenue Growth & Program Expansion: Turnover increased notably year-over-year, reflecting expanding activities and community impact. The community interest report confirms ongoing delivery of surf and skate initiatives, which aligns with the revenue trends.

• Profitability & Expense Management: Despite good gross margins, the company recorded a small operating loss (£399). This loss is a "symptom of distress" that may be due to increased administrative expenses, including director remuneration (£12,500 for operational responsibilities). While not alarming, this loss signals the importance of cost control and revenue diversification.

• Liquidity & Working Capital: The company holds a healthy cash buffer exceeding current liabilities, an encouraging sign of "healthy cash flow." However, the net working capital is narrow, meaning the company has little room for unexpected cash flow shocks or increased liabilities.

• Equity Base: Net assets are positive but very modest (£1,110), indicating that the company’s financial "immune system" is weak. This low equity base means the company must maintain careful fiscal discipline to avoid insolvency risks.

• Governance & Control: The company is controlled by a single person with significant control, which can be efficient but also poses governance risks if not balanced by strong oversight.

Overall, the company is financially stable but vulnerable, balancing growth ambitions with tight financial resources. The "financial pulse" is steady but weak, requiring proactive management to avoid deterioration.

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4. Recommendations: Specific Actions to Improve Financial Wellness

• Enhance Revenue Streams: Pursue additional grant funding, partnerships, or fee-for-service models to increase turnover and build a larger financial cushion.

• Cost Control: Review administrative and operational expenses to identify efficiencies. Monitor director remuneration and staffing costs to ensure alignment with financial capacity.

• Build Reserves: Aim to retain profits or build reserves over time to strengthen net assets and provide a safety net against unforeseen expenses.

• Improve Working Capital Management: Tighten debtor collections and negotiate better payment terms with creditors to improve liquidity buffers.

• Regular Financial Monitoring: Establish monthly cash flow forecasts and variance analysis to detect early warning signs of distress.

• Governance Enhancements: Consider broadening oversight and controls to mitigate risks associated with concentrated control by a single PSC.

Implementing these recommendations will help "strengthen the heart" of the financial health of ANOTHER WAVE C.I.C., increasing resilience and sustainability.

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