Company Number: 13762972

Analysis Date: 2025-07-29 14:07 UTC

Financial Health Assessment for PROJECT 226 CIC

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1. Financial Health Score: B

Explanation:
PROJECT 226 CIC demonstrates a generally healthy financial position for a young, private, limited by guarantee community interest company focused on artistic creation. The company maintains positive net assets and a stable balance sheet with incremental growth in net assets over its three years of operations. However, limited cash reserves and absence of income statement details (profit and loss) restrict a fuller evaluation of operational profitability and cash flow robustness, tempering the score from an A.

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2. Key Vital Signs

Metric	2023 Value	Interpretation
Fixed Assets	£1,000	Minimal investment in long-term assets, stable.
Current Assets	£600	Low but positive; includes £400 cash, indicating some liquidity.
Cash	£400	Healthy cash presence compared to previous year (£0).
Net Current Assets	£600	Positive working capital ("healthy cash flow buffer").
Net Assets (Shareholders' Funds)	£1,600	Positive and growing net worth, indicating retained earnings or reserves.
Employee Count	0	Volunteer or non-employee model typical for CICs; low overhead risk.
Director Remuneration	£5,260	Modest payments; indicates limited financial pressure on payroll.

Interpretation:

• The company exhibits a stable and growing financial foundation with net assets rising from £1,200 in 2021 to £1,600 in 2023.
• Positive net current assets indicate sufficient short-term resources to cover liabilities, a sign of healthy liquidity.
• Cash reserves improved significantly in 2023, supporting operational flexibility.
• The company's fixed assets are minimal and stable, reflecting a low capital intensity consistent with an arts organization.
• The absence of employees reduces overhead but suggests reliance on volunteers or directors for operations.
• Director remuneration is modest, which aligns with the CIC's community-oriented mission and limited resources.
• Lack of a filed profit and loss account restricts analysis of revenue generation and profitability trends, presenting a symptom of limited financial transparency.

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3. Diagnosis

Overall Financial Condition:
PROJECT 226 CIC shows signs of financial stability and prudent management within its niche. The company’s net assets and working capital are positive and growing, indicating no immediate financial distress. The presence of cash reserves marks a healthy liquidity position, reducing risks of cash flow shortfalls.

The company’s financial statements suggest a low-risk profile with limited investment in fixed assets and no reported liabilities. The zero-employee count and modest director remuneration align with a lean organizational structure, typical for community interest companies focused on artistic and cultural programs.

However, the absence of a profit and loss statement and detailed income data means the symptoms of operational profitability and sustainability are hidden. This gap can be compared to a patient presenting with stable pulse and blood pressure but no recent blood work; the underlying metabolic health is not fully visible.

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4. Recommendations

To improve financial wellness and transparency:

1. File Full Profit & Loss Statements:
   Ensure that future accounts include the profit and loss account to provide a clearer picture of income streams, expenditures, and operational sustainability.

2. Build Cash Reserves:
   Continue to maintain or increase cash reserves as a buffer against unexpected expenses or funding delays, enhancing liquidity further.

3. Expand Stakeholder Reporting:
   Consider regular financial updates to stakeholders and funders to build trust and demonstrate financial stewardship, especially given the CIC’s community mission.

4. Explore Diversified Funding:
   Investigate opportunities for diversified income sources such as grants, sponsorships, and donations to reduce dependency on limited revenue streams.

5. Maintain Low Fixed Costs:
   Continue leveraging volunteer or director input to keep overheads low, ensuring the organization's resources are maximized for community impact.

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