Risk Analysis: FUNKY MOOSE LTD (05544265)

1. Risk Rating: HIGH

The company is technically insolvent with net liabilities of £76,195 and virtually no assets (£49 in current assets against £76,244 in current liabilities). The dramatic deterioration in the balance sheet between 2023 and 2024 — from net assets of £67,884 to net liabilities of £71,622, a swing of approximately £139,500 — represents a severe financial collapse that raises fundamental questions about viability.

2. Key Concerns

a) Severe Insolvency Net liabilities have grown from £71,622 (2024) to £76,195 (2025), representing a worsening position. Current assets of £49 against current liabilities of £76,244 yields a current ratio of effectively zero (0.0006). The company cannot meet its obligations from its assets, and there is no indication of tangible fixed assets to offset this deficit.

b) Catastrophic Asset Erosion The financial trajectory shows a shocking decline. Total assets were presumably around £136,000 in 2023 (implied from net assets of £67,884 and liabilities of £68,199), falling to just £443 in 2024 and £49 in 2025. This near-total disappearance of assets requires explanation — it may indicate write-offs, asset disposals, or reclassification that warrants scrutiny.

c) Potential Wrongful Trading Risk The company continues to operate and trade (evidenced by an active website selling products) despite being balance-sheet insolvent with negligible assets. Under Section 214 of the Insolvency Act 1986, directors who continue trading when there is no reasonable prospect of avoiding insolvent liquidation may be personally liable for the company's debts. The directors should be actively monitoring this risk.

3. Positive Indicators

• Longevity: The company has been incorporated since 2005, demonstrating nearly 20 years of operational history, suggesting prior trading success.
• Regulatory Compliance: Accounts and confirmation statements are filed on time with no overdue filings. This indicates the directors maintain basic administrative discipline.
• Stable Ownership: The company is owned and managed by two individuals (Michael Philip Gale and Alison Kay Gale), each holding 25-50% of shares and voting rights. This family-style ownership can sometimes mean creditors are related parties (director loans), which may alter the risk profile.
• Prior Profitable Trading: The company maintained positive net assets from at least 2017 through 2023, showing it has been viable historically.

4. Due Diligence Notes

a) Nature of Liabilities: The micro-entity accounts provide no breakdown of the £76,244 in current liabilities. It is critical to determine how much is owed to directors versus third-party creditors. Director loans would be subordinate and potentially waivable, significantly altering the solvency assessment.

b) Cause of Deterioration: The 2023-to-2024 collapse requires explanation. Was there a bad debt write-off? Loss of a major customer? Stock impairment? Understanding the trigger is essential for assessing whether the position is recoverable.

c) Going Concern Basis: The accounts contain no explicit going concern statement or directors' assessment of viability. Given the balance sheet position, the basis upon which the accounts are prepared should be questioned. Are there undisclosed support arrangements (e.g., director loan commitments)?

d) Relationship Between 2023 and 2024 Figures: The 2023 data shows positive net assets of £67,884 but no total assets figure is provided in the dataset. The implied total assets would be approximately £136,083 (£67,884 + £68,199). Clarification of this figure would help understand the asset composition prior to the collapse.

e) Trading Status: The website remains active, suggesting ongoing trading. If the company is taking customer money (advance payments for goods), this creates additional creditor obligations and potential consumer protection obligations that an insolvent company may struggle to meet.

f) Creditor Exposure: With £76,244 in liabilities and negligible assets, any creditor calling in debts could trigger formal insolvency. Assessment of whether creditors are pressing for payment or have issued statutory demands would be material.