SHARPER POOLS LTD

Executive Summary

Sharper Pools Ltd is a micro-construction installation business with a fragile but positive financial position. While it maintains solvency, the very thin working capital signals tight liquidity and limited financial flexibility. Strategic focus on improving cash flow, profitability, and prudent investment will be critical to sustaining and enhancing financial health going forward.

SHARPER POOLS LTD - Analysis Report

Company Number: 13652965

Analysis Date: 2025-07-29 17:23 UTC

Financial Health Assessment of Sharper Pools Ltd (as of 30 September 2024)

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1. Financial Health Score: C

Explanation:
The company maintains a positive net asset position with a small but positive working capital, indicating basic financial stability. However, the minimal net current assets and slight decline in shareholders' funds over recent years suggest constrained liquidity and limited financial cushioning. It reflects a business that is "surviving" but not yet "thriving," akin to a patient with manageable but borderline vital signs requiring attention.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	108	Negligible long-term investment; very minimal asset base.
Current Assets	8,446	Represents short-term resources; steady but slightly declining.
Current Liabilities	8,443	Nearly equal to current assets; tight liquidity, little buffer.
Net Current Assets (Working Capital)	3	Critically low; indicates potential cash flow tightness.
Total Assets Less Current Liabilities	111	Small positive net assets; solvency is intact but fragile.
Shareholders' Funds	111	Equity is positive but declining (from £154 in 2023 to £111 in 2024).
Employee Count	1	Very small workforce; micro-entity scale.

Interpretation:

• The "vital signs" show a company with a very thin margin between its short-term assets and liabilities—akin to a patient with a pulse but dangerously low blood pressure.
• The net current assets have dropped from £154 in 2023 to just £3 in 2024, signaling a significant reduction in working capital. This could hint at underlying cash flow strain or delayed payments.
• Fixed assets are practically negligible, which may indicate either a service-based operation with low capital expenditure or deferred investment in infrastructure.
• Shareholders' funds have declined, suggesting the company is either making losses or distributing funds without replenishing equity.

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3. Diagnosis: Financial Condition and Business Health

Sharper Pools Ltd is a micro-entity engaged in "Other construction installation" with a very lean operational footprint (1 employee). Its financial condition is stable but precarious:

• Liquidity Symptoms: The near-zero net current assets show symptoms of tight liquidity—there is little room for operational hiccups or unexpected expenses. This is analogous to a patient with low hydration and electrolyte imbalance; stable now but at risk if stress increases.
• Profitability and Reserves: The decline in equity suggests either marginal profitability or distribution of funds exceeding retained earnings. Without detailed profit and loss data, we infer limited profitability or possible losses eroding reserves.
• Asset Base: Minimal fixed assets mean the company likely operates with low capital investment, which reduces financial leverage risk but may limit growth capacity.
• Growth and Scale: Being a micro-company with a single director/owner controlling 75-100% of shares denotes a closely held business with limited diversification of control or capital.
• Filing and Compliance: The company is current with filings and accounts, indicating good compliance and governance practices.

Overall, the diagnosis is that Sharper Pools Ltd is financially viable but vulnerable, with tight working capital and a small equity base limiting its resilience to shocks or growth opportunities.

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4. Recommendations

To move from a cautious "stable" state toward healthier financial wellness, consider the following actions:

• Improve Working Capital:

  • Accelerate debtor collections and manage creditor payments to increase net current assets. Even a modest buffer can improve operational flexibility.
  • Consider short-term financing options (overdrafts, invoice factoring) to smooth cash flow cycles.

• Enhance Profitability:

  • Review pricing strategies and cost control to boost margins.
  • Explore expanding service offerings or client base to increase revenue.

• Build Fixed Assets Prudently:

  • Invest selectively in tools or equipment that improve operational efficiency, provided cash flow allows.

• Monitor Financial Metrics Regularly:

  • Establish monthly cash flow forecasts and financial KPIs to detect early signs of distress.

• Plan for Growth or Capital Injection:

  • If growth is a goal, consider external investment or loans to strengthen the balance sheet and provide working capital.

• Maintain Compliance and Governance:

  • Continue timely filing and transparent reporting to preserve trust with stakeholders.

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