SHARPER FOCUS LTD

Executive Summary

Sharper Focus Ltd is a recently incorporated company with a weak financial position characterized by negative net assets and significant working capital deficit. The company currently relies heavily on director and bank loans with minimal trading activity, raising concerns about its ability to service debt or support new credit. Credit facilities are not recommended without substantial improvements in liquidity or capital structure.

SHARPER FOCUS LTD - Analysis Report

Company Number: 14549126

Analysis Date: 2025-07-29 19:21 UTC

1. Credit Opinion: DECLINE
   Sharper Focus Ltd shows significant financial weakness with net current liabilities of £21,858 and overall net liabilities of £6,632 as of 31 December 2023, despite being active less than two years. The company’s working capital position is negative largely due to director loans (£14,452) and bank loans (£9,907), indicating reliance on short-term external and related-party funding. The absence of employees and limited trade debtors (£655) suggest minimal trading activity or early-stage operations. The current financial profile raises concerns about the company’s ability to service external debt or meet commercial obligations without additional capital injection or improved cash flows. Therefore, credit approval is not recommended at this stage without substantial mitigating factors such as personal guarantees or confirmed future contracts.

2. Financial Strength:
   The balance sheet reveals £15,226 in tangible fixed assets, mainly motor vehicles and plant & machinery, depreciated by £2,599. However, the fixed asset base does not offset significant current liabilities of £26,664, including loans from directors and bank overdrafts. Shareholders’ funds are negative (£6,633), reflecting accumulated losses and no retained earnings. The company’s capital structure is weak, and the current asset base (£4,806) is insufficient to cover short-term debts. Overall, the financial strength is poor, with a net liability position and heavy short-term funding reliance undermining balance sheet resilience.

3. Cash Flow Assessment:
   Cash at bank is £3,494, which is a modest buffer but inadequate against current liabilities due within one year (£26,664). Trade debtors are low (£655), and there are no employees, implying limited operational cash generation. The director loans imply dependence on insider financing rather than sustainable cash flow from operations. The negative net current assets of £21,858 indicate working capital deficiency, which is a critical liquidity risk. Without improvement in cash inflows or capital structure, the company may face difficulties meeting short-term obligations.

4. Monitoring Points:

• Watch for improvements in net current assets through increased trade debtor turnover or reduction of creditors.
• Monitor director loans and bank overdrafts as indicators of ongoing reliance on external/related-party funding.
• Track revenue generation and cash flow from operations once the company scales activity beyond start-up phase.
• Review any forthcoming financial statements for evidence of profitability or capital injections that improve net assets.
• Evaluate management actions to improve liquidity, such as cost controls or obtaining longer-term financing.