FORTH VALLEY RADIO CIC

Executive Summary

Forth Valley Radio CIC is a small community interest company with limited financial resources and modest profitability. While it can service current obligations, its low liquidity and small equity base suggest credit facilities should be small and conditional on ongoing performance monitoring. The business model relies heavily on sponsorship income, which requires scrutiny to ensure revenue sustainability.

FORTH VALLEY RADIO CIC - Analysis Report

Company Number: SC679283

Analysis Date: 2025-07-29 12:43 UTC

1. Credit Opinion: CONDITIONAL APPROVAL. Forth Valley Radio CIC operates as a private company limited by guarantee and has been active since 2020. The company shows a modest operating profit in the latest financial year but with very limited turnover (£35.5k) and a small equity base (£3.4k). The presence of long-term creditors totaling over £12k creates a fixed financial obligation that must be carefully monitored. The company’s ability to service debt appears constrained by limited cash balances (£864) and modest net current assets (£3,064). Given the small scale and low profitability, credit facilities could be considered but should be limited with close ongoing monitoring and possibly secured or guaranteed.

2. Financial Strength: The balance sheet shows fixed assets of £12.5k and net assets of £3.4k, indicating a very small equity base relative to liabilities. The company holds long-term creditors of £12.1k, which is significant relative to equity and turnover. Despite positive net current assets, cash holdings are low. The company’s financial trajectory shows a slight decline in turnover (from £39.2k in 2021 to £35.5k in 2022) and a decrease in cash, suggesting a somewhat constrained liquidity position. The company reports no directors’ remuneration and operates with minimal staffing (1 employee on average), which limits overhead but may constrain growth capacity.

3. Cash Flow Assessment: Cash flow appears tight; cash at bank reduced to £864 in 2022 from £1,488 in 2021. Debtors increased to £2,200 but remain small, indicating limited receivables risk. Current liabilities are sizeable (£12,157), but net current assets are positive due to cash and debtors. The company’s operating profit is marginal (£835), indicating limited buffer to absorb shocks or increased debt servicing costs. Working capital management seems adequate but fragile, and any credit extension should be carefully aligned with cash flow forecasts to avoid liquidity stress.

4. Monitoring Points:

• Turnover trends and margin stability: Continue to monitor if turnover recovers or declines further.
• Cash flow and liquidity position: Watch cash balances and debtor days closely to ensure ongoing operational funding.
• Long-term creditor balances: Confirm the nature and terms of the £12k+ long-term creditors and assess impact on solvency.
• Director changes and governance: Recent director resignations may impact management continuity and oversight.
• Community engagement and sponsorship income: As revenue depends on sponsorships, monitor stability and diversification of income sources.