Risk Assessment: BRINGING UNITY BACK INTO THE COMMUNITY (B.U.B.I.C.)

1. Risk Rating: LOW

Justification: The company demonstrates a consistently strengthening balance sheet over a 10-year period, with net assets growing from £58,038 (2016) to £208,896 (2025). Liabilities remain modest relative to assets, and the current ratio of approximately 6.3x indicates strong liquidity. Filing obligations are current, and the organisation has been operational for nearly 20 years without apparent distress indicators.

2. Key Concerns

Concern 1: Liability Volatility

Total liabilities fluctuated significantly: £5,474 (2023), £49,380 (2024), £36,430 (2025). This nine-fold swing between 2023 and 2024 warrants investigation. For a community organisation, this may indicate irregular grant funding cycles, deferred income recognition, or project-based creditors that create balance sheet volatility.

Concern 2: Governance Complexity Relative to Size

The board comprises 13 directors for a micro-entity with 9 employees. While common in community organisations seeking broad stakeholder representation, this structure can create: - Slower decision-making processes - Potential governance conflicts - Difficulty establishing clear accountability

The presence of a "corporate-director" (BUBIC) is also unusual and should be clarified.

Concern 3: Limited Financial Transparency

As a micro-entity, the company files minimal accounts with no profit and loss statement, cash flow data, or detailed notes beyond employee numbers. This restricts assessment of: - Operational sustainability and revenue dependency - Grant or contract concentration risk - Cash flow timing and working capital management

3. Positive Indicators

Strong and Consistent Net Asset Growth

Net assets have grown from £58,038 to £208,896 over the decade, representing approximately 260% cumulative growth. This trajectory suggests sustainable operations rather than speculative or one-off income.

Healthy Liquidity Position

Net current assets of £193,673 against current liabilities of £36,430 provides substantial working capital headroom. The organisation appears well-positioned to meet near-term obligations without reliance on asset disposals or additional borrowing.

Low Leverage

Total liabilities represent only approximately 14.9% of total assets (£36,430 / £245,326). The organisation is not materially dependent on debt financing, reducing solvency risk.

Regulatory Compliance

Accounts are filed on time (not overdue), confirmation statements are current, and the company has maintained active status since 2005. No disqualification records are noted against directors.

Asset Base Stability

Despite some year-to-year variation, total assets have generally trended upward, suggesting the organisation is accumulating reserves rather than depleting its resource base.

4. Due Diligence Notes

Items Requiring Further Investigation

1. Revenue Sources and Concentration: Determine the proportion of income from grants, contracts, and donations. Assess dependency on any single funding body (likely local authority or NHS given the SIC codes for employment placement and health activities).

2. Liability Composition: Request internal accounts to understand the nature of the £36,430 current creditors. Distinguish between trade creditors, accruals, deferred income, and any related-party balances.

3. Fixed Asset Nature: Clarify what constitutes the £15,223 in fixed assets (decreasing from £22,835 in 2024) and whether depreciation policy is appropriate.

4. Corporate Director: Investigate the "BUBIC" corporate director entry. Confirm whether this is a separate legal entity and understand the relationship structure.

5. PSC Register: The PSC entry states only "Persons with significant control statement" without identifying individuals. As a company limited by guarantee, this may reflect the structure, but it should be confirmed that the register is compliant.

6. Board Effectiveness: With 13 directors for a small organisation, assess whether governance is functioning effectively or whether there is an inactive board with limited practical oversight.

7. Grant Funding Timing: The asset fluctuations (notably the drop in 2023 followed by recovery) may reflect grant income timing. Understanding whether the organisation operates on annual or multi-year funding cycles would inform sustainability assessment.