INTERNATIONAL ASSOCIATION FOR SUSTAINABLE ECONOMY

Executive Summary

The INTERNATIONAL ASSOCIATION FOR SUSTAINABLE ECONOMY shows critical signs of financial distress with negative net assets and working capital deficits as of July 2023, marking a significant deterioration from prior years. Immediate actions to improve liquidity, manage liabilities, and enhance funding are essential to restore financial health and ensure sustainable operations.

INTERNATIONAL ASSOCIATION FOR SUSTAINABLE ECONOMY - Analysis Report

Company Number: 12714984

Analysis Date: 2025-07-29 20:25 UTC

Financial Health Assessment for INTERNATIONAL ASSOCIATION FOR SUSTAINABLE ECONOMY

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1. Financial Health Score: D

Explanation:
The company’s financial health grade is D, indicating signs of financial distress. The most recent balance sheet shows net current liabilities (a working capital deficit) and negative net assets, which are symptoms of cash flow or liquidity issues. While the company was financially healthy two years ago, the sharp deterioration signals urgent need for remedial action.

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2. Key Vital Signs

Metric	2023-07-21	Interpretation
Fixed Assets	£0	No long-term assets; limited capital base
Current Assets	£53,745	Liquid assets have declined significantly
Current Liabilities	£67,191	Short-term debts exceed current assets
Net Current Assets (Working Capital)	-£13,446	Negative working capital: insufficient liquidity
Net Assets (Shareholders' Funds)	-£13,446	Negative equity indicates financial strain
Employees	0	No staff; possibly a non-trading or volunteer entity

Interpretation of Vital Signs:

• The negative working capital is a "symptom of distress," suggesting the company may struggle to meet its short-term obligations without additional funding.
• The drop in current assets from £149,846 in 2021 to £53,745 in 2023, combined with increased current liabilities, points to deteriorating liquidity.
• Negative net assets imply the company’s liabilities exceed its assets, a critical "diagnostic" marker for financial health concerns.

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3. Diagnosis

The company's financial "vital signs" indicate a troubled state. The negative net current assets and net assets suggest a liquidity crunch and possible solvency risk. This could stem from operational losses, delayed funding, or increased short-term liabilities. The absence of employees may reflect a reliance on volunteers, outsourcing, or minimal operations, but it also means limited operational capacity to generate revenue or manage liabilities effectively.

Given the company is a private limited by guarantee entity (no share capital), the negative equity does not mean shareholder insolvency but does raise concern about the organization's ability to sustain operations without external support.

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4. Recommendations

• Immediate Cash Flow Management: Develop a cash flow forecast to identify and prioritize payments, seeking to bridge the working capital deficit. Consider short-term financing options or grants to stabilize liquidity.
• Review Liabilities: Negotiate with creditors to extend payment terms or reduce short-term liabilities where possible, to ease liquidity pressure.
• Operational Assessment: Evaluate the organization's activities to identify revenue-generating opportunities or cost-cutting measures, despite having no employees.
• Funding Strategy: As a company limited by guarantee, explore sponsorship, donations, or membership fees to improve financial resources.
• Regular Financial Monitoring: Implement monthly financial reviews to catch early signs of distress and adjust plans proactively.
• Governance and Reporting: Ensure directors maintain active oversight, given multiple directors with diverse backgrounds, to guide turnaround efforts effectively.

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Executive Summary