Company Number: 12457699

Analysis Date: 2025-07-29 20:53 UTC

Financial Health Assessment Report: MTF COACHING ACADEMY CIC

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1. Financial Health Score: D

Explanation:
MTF Coaching Academy CIC exhibits financial distress symptoms, including negative net assets and working capital deficiency. While it generated a modest operating profit in the latest year, the company's balance sheet is fragile, with liabilities exceeding total assets. The score reflects a business in early growth or recovery phase but facing liquidity and solvency challenges that require urgent management attention.

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2. Key Vital Signs

Metric	2023 Value	Interpretation
Turnover	£12,001	Low revenue base indicating a micro-sized operation with limited sales activity.
Operating Profit	£1,394	Operating profitability achieved, a positive sign after prior losses, showing improved operational control.
Cost of Sales	£34,939 (loss)	Higher than turnover, suggests possible high direct costs or accounting classification affecting gross margin negatively.
Administrative Expenses	£31,336	Substantial overhead relative to turnover, indicating cost structure pressure.
Net Current Assets (Working Capital)	-£1,577	Negative working capital — "symptom of liquidity distress" — current liabilities exceed current assets, risking cash flow issues.
Net Assets (Equity)	-£176	Negative net assets ("balance sheet weakness") indicating liabilities slightly exceed total assets; a solvency red flag.
Cash at Bank	£15,535	Positive cash balance, a "healthy cash flow sign," but may be offset by short-term creditors.
Creditors Due Within One Year	£17,112	High short-term liabilities, requiring monitoring to avoid payment delinquency or default risk.
Employees	0	No employees reported, likely relying on volunteers or directors, which may limit operational capacity.

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3. Diagnosis

MTF Coaching Academy CIC is a micro-sized community interest company operating in sports and recreation education with a social mission. The financial statements show a business with a "fragile financial pulse." Despite growing turnover (from £4.5k to £12k) and returning to operating profit, the company runs at a gross loss due to high cost of sales and administrative expenses exceeding income generation capacity.

The negative working capital and net asset deficit indicate that the company is currently relying on external support or director funding to meet short-term obligations. The positive cash balance is encouraging and suggests recent injections of funds or prudent cash management, but the overall balance sheet reveals a "symptom of financial stress" that could challenge sustainability if not addressed.

No employees on record imply limited operational scale, consistent with a community interest company relying heavily on volunteers or director involvement. Directors received modest remuneration, pointing to some professionalization but still tight financial constraints.

The company is showing early signs of recovery and stability, but the high overheads and imbalance between costs and revenue suggest the need for a stronger commercial footing or additional funding.

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4. Recommendations

• Improve Revenue Generation: Explore diversifying income streams or increasing client base to grow turnover beyond current micro-scale levels. Consider grant funding, partnerships, or fee-for-service models aligned with the community mission.

• Cost Control Measures: Review cost of sales and administrative expenses to identify inefficiencies or non-essential expenditures. Streamlining overheads will improve gross margin and net profitability.

• Strengthen Liquidity Management: Monitor working capital closely. Negotiate longer payment terms with creditors or accelerate receivables where possible to reduce negative net current assets.

• Build Reserves: Aim to convert operating profits into retained earnings to improve net assets over time, reducing balance sheet weakness.

• Stakeholder Engagement: Maintain transparent communication with funders, community stakeholders, and directors to secure ongoing support and goodwill during financial recovery.

• Financial Planning: Develop realistic budgets and cash flow forecasts to anticipate funding needs and avoid liquidity crises, akin to regular health check-ups for the business.

• Governance and Oversight: Directors should remain actively engaged in financial oversight to detect and respond to financial "symptoms" early, ensuring long-term viability.

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