So just a little background before I begin, I am by education and career, a wildlife biologist. This doesn't mean that I am a licensed wildlife rehabilitator , nor a wildlife veterinarian.
This is a hard question with a lot of variables that I don't know. For instance, how do you know it was separated from it's mom? Baby squirrels often fall from nests, and the mother will usually come and get it, eventually. Now, if it was injured, more times than not, she will abandon it as it is now a liability. A lot of well meaning people get offended if it is suggested that the animal would have been fine if they had left it, which is normal because obviously people who pick up young wildlife do so with the best of intentions, and don't want to hear they did something wrong. Once again, I wasn't there, so I won't assume you did the right or wrong thing here, just letting you know that 9 times out of 10, this is the case.
Now that you have the squirrel and it appears to be sick...
You are right to assume so, fur is often a good sign of animal health issues. There are more in-depth approaches. I would look at the gums and see if they are gray, instead of a healthy pink. Also is it cold to the touch, inactive, thin? Curled in a ball?
Likely it is dehydrated. An animal in this condition cannot digest food, compounding the issue. If you try to feed it and it is dehydrated, you will kill it.
If you want this guy to live, my advise it to take it to a wildlife rehabilitator, if you cannot do that soon, let me know and I can give some more advise to keep it alive in the meantime. Honestly from what I am inferring from your post, it won't make it long.
A hydrating solution would possibly help, like pedialyte is fine. Depending on age, there is nothing you can really give to it for nurishment that is ok for a squirrel, not even calf formula or anything like that. They take a special mixture.
