STREAMS LEARNING HUB CIC

Executive Summary

STREAMS LEARNING HUB CIC shows early positive signs with a slim profit and sufficient cash, typical of a start-up social enterprise. However, its financial position remains fragile due to minimal working capital and equity. Focused efforts on growing income, careful expense management, and strengthening cash reserves will be crucial to ensuring long-term financial health and mission success.

STREAMS LEARNING HUB CIC - Analysis Report

Company Number: 14890192

Analysis Date: 2025-07-19 12:44 UTC

Financial Health Assessment Report for STREAMS LEARNING HUB CIC
Period Ended: 31 May 2024

---

1. Financial Health Score: C

Explanation:
Given the company is newly incorporated (less than one year old), with modest turnover and minimal net assets, the financial health is currently stable but fragile. The business shows signs of initial operational success but has a very narrow margin of safety in liquidity and profitability. The grade "C" reflects a start-up phase with potential but also clear vulnerabilities that require careful management to ensure growth and sustainability.

---

2. Key Vital Signs

Metric	Value (£)	Interpretation
Turnover	£17,303	Low revenue reflecting early-stage operations
Gross Profit	£11,630	Healthy margin (approx. 67%) indicating good markup
Operating Profit	£110	Minimal operating surplus; nearly break-even
Net Profit	£81	Positive but very slim profit, indicating tight cost control
Current Assets	£6,671	Primarily cash (£6,139) showing good immediate liquidity
Current Liabilities	£6,590	Almost equal to current assets; working capital is marginal
Net Current Assets	£81	Barely positive working capital; limited buffer for expenses
Net Assets (Equity)	£81	Very low equity base, typical of start-up phase
Number of Employees	6	Small team size suitable for the scale of operations

Interpretation:

• Liquidity ("pulse"): The company has a "healthy cash flow" with cash covering almost all current liabilities, but net current assets of only £81 indicate a very tight liquidity position. Any unexpected cash drain could cause distress.
• Profitability ("energy level"): A tiny operating profit margin suggests the company is just covering costs with little surplus, which is common in the first year as fixed costs and start-up expenses weigh heavily.
• Solvency ("structural integrity"): Equity is minimal, suggesting limited financial buffer to absorb losses or invest in growth. However, as a company limited by guarantee with no share capital, this is typical for a Community Interest Company (CIC).

---

3. Diagnosis

Overall financial condition:
STREAMS LEARNING HUB CIC is in the early "incubation" stage of its financial life cycle. The financial "vitals" indicate a start-up with a viable business model as evidenced by positive gross margin and a slight operating profit. However, the company exhibits symptoms of financial fragility: very low working capital and equity, and tight cash buffers. Given the CIC nature and mission-focused activity, the financials reflect prudent management and controlled spending aligned with modest income generation.

The company's liquidity is just sufficient ("healthy pulse") but vulnerable to shocks such as delayed payments or unexpected expenses. Profitability is positive but marginal, indicating the venture is not yet financially robust but is not showing distress.

The directors appear engaged and have established good community partnerships, which is a positive "immune response" that supports future growth and sustainability.

---

4. Prognosis

Future financial outlook:
If current trends continue and the company can grow turnover while maintaining cost discipline, the financial health should improve, providing a stronger buffer ("strengthening heart and lungs"). The key risks to monitor include cash flow pressures, potential increases in liabilities, and need for investment in program expansion.

Continued stakeholder engagement and community support are vital to enhance revenue streams and attract possible grants or donations. Building a reserve and improving net assets will be critical for long-term resilience.

---

5. Recommendations

• Enhance Cash Reserves: Aim to build a cash buffer at least 3 months’ worth of operating expenses to cushion against variability in income or unexpected costs.
• Revenue Growth: Explore additional funding opportunities such as grants, sponsorships, or paid services aligned with the community interest mission to increase turnover beyond the current modest level.
• Cost Management: Continue tight control over administrative expenses to protect the slim operating margin; regularly review contracts and supplier arrangements for efficiencies.
• Financial Monitoring: Establish monthly cash flow forecasting and variance analysis to detect early signs of liquidity issues.
• Stakeholder Engagement: Maintain and deepen partnerships with educational and community organizations to strengthen program offerings and funding prospects.
• Governance and Reporting: Ensure directors maintain strong oversight, and consider seeking financial advice or mentoring to support sustainable growth strategies.

---

Executive Summary

STREAMS LEARNING HUB CIC is a nascent social enterprise demonstrating initial operational viability with a positive but minimal profit and a healthy cash position. However, the company’s financial health is fragile due to very limited working capital and equity. To transition from fragility to resilience, focus should be on building cash reserves, growing revenue, and maintaining strict cost control while leveraging strong community partnerships to underpin sustainable growth.