LEADING THROUGH STORMS CIC

Executive Summary

LEADING THROUGH STORMS CIC shows early signs of financial recovery but remains in a fragile state with negative net assets and working capital deficits. Focused measures on increasing revenue, managing costs, and improving cash flow are critical to restoring financial health and sustaining its community-driven mission.

LEADING THROUGH STORMS CIC - Analysis Report

Company Number: 13488006

Analysis Date: 2025-07-29 16:16 UTC

Financial Health Assessment: LEADING THROUGH STORMS CIC

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1. Financial Health Score: D

Explanation:
The company shows signs of financial strain characterized by persistent negative net current assets and net liabilities exceeding £6,400. While a small operating profit was recorded in the latest year, the overall balance sheet indicates a fragile financial state. The financial "vital signs" suggest distress symptoms that require monitoring and action to avoid worsening liquidity issues.

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2. Key Vital Signs

Metric	2024 (£)	Interpretation
Turnover	1,838	Very low revenue base; small scale of operations typical for a micro or startup social enterprise
Operating Profit	22	Marginal profit; improvement from previous loss of £5,828 but still minimal cushion
Current Assets (Cash)	2,254	Low cash reserves relative to liabilities — limited “healthy cash flow” buffer
Current Liabilities	8,752	Significant short-term debts creating a liquidity crunch
Net Current Assets	-6,498	Negative working capital; indicates cash flow pressure and difficulty meeting immediate debts
Net Assets / Shareholders’ Funds	-6,498	Negative equity showing accumulated losses; financial "symptom" of distress and undercapitalisation

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3. Diagnosis

LEADING THROUGH STORMS CIC is a young private company limited by guarantee operating in a niche educational sector focused on leadership development for climate and ecological challenges. The company has been operating at a very small scale with low turnover and minimal profitability.

Symptoms of Financial Distress:

• Negative Working Capital: The company’s current liabilities exceed current assets by a significant margin (£6,498), indicating it may struggle to cover short-term obligations without further financing or cash injections.
• Negative Net Assets: The accumulated losses reflected in shareholders’ funds (negative £6,498) indicate that the company has been operating at a loss in prior periods, leading to an erosion of equity.
• Low Cash Reserves: Cash levels have reduced substantially from £5,371 in 2023 to £2,254 in 2024, signaling that cash burn is ongoing and liquidity is tight.
• Improving Profitability: The small operating profit of £22 in 2024 marks a positive turning point compared to a sizeable loss in the prior year, suggesting early signs of financial recovery or stabilization.

Underlying Health:
The company is in a precarious financial state but not yet in critical failure. Its core business activities generate limited income, and the cash flow is under pressure. The CIC structure and directors’ unpaid roles indicate the company is mission-driven rather than profit-focused. However, the financial "patient" requires intervention to strengthen liquidity and build sustainable operations.

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4. Recommendations

To improve financial wellness and restore healthy financial "vital signs," the company should consider:

• Enhance Revenue Generation: Explore new funding streams, grants, or partnerships aligned with the community interest mission to increase turnover beyond the current minimal level.
• Cost Control and Efficiency: Review administrative and operational expenses to ensure minimal cash outflows, aligning costs strictly with strategic priorities.
• Cash Flow Management: Implement rigorous cash flow forecasting and management to avoid liquidity shortfalls. Explore short-term financing options or payment terms extensions to ease current liabilities pressure.
• Equity or Funding Injection: Seek additional capital (grants, donations, social investment) to improve net asset position and provide a buffer for growth and operational stability.
• Stakeholder Engagement: Leverage the company’s network and community impact reporting to build credibility and attract support from social investors or funders.
• Regular Monitoring: Establish monthly or quarterly financial health reviews focusing on liquidity ratios and cash management to detect and respond promptly to financial "symptoms."

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Executive Summary

LEADING THROUGH STORMS CIC currently exhibits financial distress symptoms with negative working capital and net liabilities exceeding £6,400, despite a slight operating profit in the latest year. The company’s financial health is fragile, requiring focused efforts on revenue growth, cost control, and liquidity management to improve sustainability. Immediate actions to strengthen cash flow and seek additional funding will help stabilize and potentially "revive" the financial condition.