SAKARU INTERNATIONAL LIMITED

Executive Summary

SAKARU INTERNATIONAL LIMITED is a newly incorporated micro-entity exhibiting financial distress symptoms such as negative net assets and substantial long-term liabilities. Immediate capital infusion and liability restructuring are necessary to stabilize its financial health and improve liquidity. Without prompt action, the company faces heightened insolvency risk despite being operational.

SAKARU INTERNATIONAL LIMITED - Analysis Report

Company Number: 15182738

Analysis Date: 2025-07-29 17:38 UTC

Financial Health Assessment of SAKARU INTERNATIONAL LIMITED

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1. Financial Health Score: D

Explanation:
The company exhibits several financial stress signals despite being newly incorporated. The presence of significant long-term liabilities and provisions exceeding current assets, combined with a negative net asset position, indicates financial vulnerability. The score reflects early warning signs that require immediate attention to avoid deterioration.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	685	Minimal investment in long-term assets — typical for a new micro-entity.
Current Assets	1,356	Limited liquid resources; cash and equivalents are low.
Prepayments and Accrued Income	254	Small deferred income, possibly advance payments made or income to be recognized.
Current Liabilities	1,241	Short-term obligations exceed current liquid assets, creating working capital pressure.
Net Current Assets (Working Capital)	369	Positive but marginal; indicates some buffer to cover short-term debts.
Creditors due after one year	1,850	Significant long-term debt relative to total assets; a red flag for financial stability.
Provisions for liabilities	500	Reserved for probable liabilities, reducing net asset value further.
Total Net Assets (Equity)	-1,296	Negative net worth — company owes more than it owns; critical symptom of financial distress.
Shareholders' Funds	-1,296	Reflects accumulated deficit; shareholder equity is eroded.

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3. Diagnosis

SAKARU INTERNATIONAL LIMITED is in the early stage of development (incorporated in October 2023) and classified as a micro-entity. However, its balance sheet reveals symptoms of financial distress:

• Negative Net Assets: The company’s liabilities and provisions exceed its assets, resulting in a negative shareholders’ equity of £1,296. This is akin to a patient with a weakened immune system — the business lacks the financial strength to withstand shocks or absorb losses.

• High Long-term Liabilities: The presence of £1,850 due after one year, combined with provisions of £500, suggests the company has committed to future obligations that may strain cash flow.

• Working Capital Pressure: While net current assets are positive at £369, the margin is thin, indicating limited short-term liquidity. This could manifest as difficulty in meeting immediate expenses, a "cash flow crunch" symptom.

• No Employees Yet: The absence of staff implies the company might be in a preparatory or inactive operational phase, which could mean limited revenue generation currently.

• Micro-Entity Filing: The company benefits from simplified reporting standards, but this also means less detailed financial information is available, limiting a full diagnostic.

Taken together, the financial data signals that although the company is not yet insolvent, it is in a fragile state with potential risk of insolvency if losses continue or liabilities increase. The negative equity situation is a critical warning sign.

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4. Recommendations

To improve the financial wellness of SAKARU INTERNATIONAL LIMITED, consider the following steps:

• Capital Injection: The company needs an immediate infusion of equity capital or shareholder loans to restore positive net assets and strengthen its balance sheet "immune system."

• Liability Management: Reassess and negotiate terms of long-term creditors to reduce or restructure debt, easing future cash flow burdens.

• Cash Flow Monitoring: Establish rigorous cash flow forecasting and management to ensure current liabilities are met timely, preventing liquidity crises.

• Operational Readiness: If the company is preparing to commence trading, focus on generating revenue quickly to turn financial “symptoms” into positive “vital signs” like profits and cash inflows.

• Regular Financial Reviews: Set up periodic financial health checks to monitor key metrics and respond to early distress signals proactively.

• Professional Advice: Engage with financial advisors or insolvency practitioners if cash flow problems persist or worsen, to explore restructuring options.

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Executive Summary

SAKARU INTERNATIONAL LIMITED, a newly formed micro-entity, shows early signs of financial strain with negative net assets and significant long-term liabilities. While currently active, its financial condition is fragile and requires urgent capital support and liability management to avoid insolvency risks. Immediate attention to cash flow and balance sheet strengthening is critical for sustainable growth.