SHARP SOLUTIONZ LIMITED

Executive Summary

SHARP SOLUTIONZ LIMITED is a very young micro-entity displaying early signs of financial fragility with slightly negative net assets and tight liquidity. While this is not unusual for a startup, careful cash flow management and capital strengthening are essential to avoid deeper financial distress. With focused actions on improving working capital and boosting revenue, the company can stabilize and build a healthier financial footing.

SHARP SOLUTIONZ LIMITED - Analysis Report

Company Number: 14927650

Analysis Date: 2025-07-29 20:16 UTC

Financial Health Assessment of SHARP SOLUTIONZ LIMITED

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1. Financial Health Score: D

Explanation:
The company’s financial health is currently weak. A negative net asset position, even if small, is a warning "symptom" indicating the company's liabilities slightly exceed its assets. While this is not severe at this stage—with modest absolute figures—it signals early distress requiring attention. The company is very young (incorporated in 2023) and operates as a micro-entity with limited financial activity so far, which may explain the thin capital base.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Current Assets	6,613	Cash and short-term receivables are low but positive, indicating some liquidity.
Current Liabilities	6,657	Short-term debts slightly exceed current assets, signaling tight liquidity and working capital.
Net Current Assets	-44	Negative working capital is a "symptom" of potential cash flow stress; very marginal here.
Total Assets Less Current Liabilities	-44	Negative net assets highlight that liabilities outweigh assets, a sign of weak financial footing.
Net Assets (Shareholders’ Funds)	-44	Negative equity means the company has used more resources than it currently owns—unsustainable long term.
Number of Employees	1	Minimal staff, consistent with micro-entity status and low operational scale.

Additional Context:

• The company is classified as a micro-entity, which has reduced accounting burdens but also typically limited capital and scale.
• The single director and sole significant controller hold full ownership and control, centralizing decision-making but also concentrating risk.
• The primary business activity is retail sales via mail order or internet, a sector where cash flow management is critical.

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3. Diagnosis

Underlying Condition:
The financial "symptoms" show a very early-stage business with minimal assets and slightly more liabilities than assets. While the numbers are small, negative net assets suggest the company is operating "at a loss" in terms of net worth. This could be due to startup costs, early operational losses, or delayed revenue generation. The narrow margin between current assets and liabilities points to tight liquidity, which could lead to cash flow difficulties if sales or collections slow.

Given the company’s recent incorporation and micro size, this is not uncommon, but it represents a "fragile" financial state. The absence of significant fixed assets and the low capital base further emphasize vulnerability to unexpected expenses or revenue shortfalls.

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4. Recommendations

1. Improve Liquidity and Working Capital:

   • Monitor cash flow rigorously to avoid liquidity crunches.
   • Negotiate better payment terms with suppliers to extend payables.
   • Accelerate receivables collection to bolster current assets.

2. Increase Capital Base:

   • Consider injecting additional equity or shareholder loans to strengthen net asset position.
   • Explore small business grants or low-interest loans designed for micro enterprises.

3. Control Costs and Expenses:

   • Keep overheads minimal; with only one employee, maintain lean operations.
   • Audit expenses regularly to prevent overspending.

4. Build Revenue Streams:

   • Focus on marketing and customer acquisition to increase sales volume.
   • Diversify product or service offerings if possible to stabilize income.

5. Regular Financial Monitoring:

   • Prepare monthly management accounts to detect early warning signs.
   • Engage with a financial advisor or accountant to develop a sustainable financial plan.

6. Governance and Compliance:

   • Ensure timely filing of accounts and confirmation statements to avoid penalties.
   • Maintain transparent records to support future funding or credit applications.

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