Company Number: 12768911

Analysis Date: 2025-07-20 15:19 UTC

Financial Health Assessment for FEELING SOCIAL CIC (Year ended 31 July 2023)

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1. Financial Health Score: C

Explanation:
FEELING SOCIAL CIC demonstrates stable but fragile financial health. The company maintains positive net assets and continues operations without overdue filings, reflecting basic compliance and operational continuity. However, a slight operating loss, negative net current assets, and low cash reserves indicate symptoms of financial strain that require attention to avoid deeper distress.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Turnover (Revenue)	37,105	Consistent but modest revenue, stable year-on-year.
Gross Profit	14,583	Positive gross margin, though decreasing from prior year.
Operating Profit (Loss)	-126	Operating loss signals expenses nearly exceed income.
Net Assets	333	Positive but very low equity buffer; minimal capital cushion.
Net Current Assets (Working Capital)	-205	Negative working capital indicates short-term liquidity stress.
Cash at Bank	370	Low cash reserves suggest limited ability to cover immediate expenses.
Debtors	1,267	Some receivables exist but may not be readily convertible to cash.
Creditors (Current Liabilities)	1,842	Trade and tax creditors remain constant; caution on timely payments.
Directors' Remuneration	9,750	Notable expense relative to turnover; impacts operating cash flow.

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3. Diagnosis: Financial Condition Analysis

Vital Signs Interpretation:
FEELING SOCIAL CIC’s financial "heartbeat" shows signs of mild distress. The company’s operating loss, though small, indicates the business is not generating enough earnings to cover its administrative costs fully. The negative working capital is a warning symptom — the company’s short-term obligations exceed its short-term assets, which can strain day-to-day operations.

Liquidity and Cash Flow:
Cash on hand is low, suggesting "narrow pulse" in liquidity. Debtors make up a significant part of current assets, but collections uncertainty could worsen liquidity. This weak cash position is a critical vulnerability, as it limits the company’s ability to absorb unexpected expenses or invest in growth.

Capital Structure and Resilience:
Net assets are positive but minimal, indicating a thin equity base. This fragile capital position means the company has little financial "buffer" against operational shocks or downturns. The directors’ remuneration, while understandable for a CIC, is a substantial cost relative to revenue and contributes to the thin margins.

Operational Outlook:
Turnover is stable but modest, with a slight decline in gross profit margin and operating income. The company’s activities focus on community and social impact, which may limit rapid revenue growth potential. Sustaining operations may depend on controlling administrative expenses and improving cash collections.

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4. Recommendations: Steps to Improve Financial Wellness

• Improve Cash Flow Management:
  Prioritize faster collection of debtors and negotiate extended payment terms with creditors to ease working capital pressure. Consider short-term financing options if needed to maintain liquidity.

• Control Administrative Expenses:
  Review administrative costs closely, including directors' remuneration, to identify possible savings or restructuring that better aligns expenses with income.

• Strengthen Revenue Streams:
  Explore opportunities to diversify or increase income sources, such as grants, partnerships, or new service offerings, to enhance turnover and gross profit margins.

• Build Financial Buffer:
  Aim to increase net assets by retaining earnings or seeking additional funding (grants, donations, or social investment) to create a cushion against future uncertainties.

• Regular Financial Monitoring:
  Implement monthly cash flow forecasts and financial reviews to detect early symptoms of distress and respond proactively.

• Stakeholder Engagement:
  Engage with funders, partners, and the community to align strategic goals with sustainable financial planning.

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