FINANCIAL MANAGEMENT FOR SPORT ORGANISATIONS

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FINANCIAL MANAGEMENT FOR SPORT ORGANISATIONS

• HM 543/541 Introduction to Sport Management
• Week 10 Lecture 1
• Lecturer Sue Brown

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Financial Management for Sporting Clubs

• Executive Committee
• Treasurer
• regular reporting balance competing demands
• volume nature of work may vary

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Financial Statements

• Monthly Annual Financial Reports
• Balance Sheet
• Assets Liabilities Equity
• Assets Current Fixed
• Liabilities Current Fixed
• Equity income earned / profit

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Financial Statements

• Profit Loss Statement
• Revenue
• Expenses
• Cash Flow Statements
• Importance of a cash flow statement
• Analysing the cash flow statement

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Use of Financial Statements

• To inform decision making
• Managing contracts

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Financial Planning

• Budgets
• Criteria to consider when establishing a budget
• Practical advantages of budgeting

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Financial Planning

• Budget Types
• Operating Budgets
• Program Budgets
• Capital Budgets
• Budget Process
• Examine organisations mission, goals
  objectives
• Review information gathered
• Present Budget to BOM for approval

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Break Even Analysis

• Valuable budgeting tool
• fixed costs
• variable costs
• Revenue
• Break-Even Point fixed costs / contribution
  margin
• EBIT revenues variable costs fixed costs of
  production 0
• (EBIT earnings before interest and taxes)

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Break-even Analysis Example Determining cost per
person

• Break Even Point Fixed costs/ Contribution
  Margin
• FC 1,000 VC 60 (per person)
• R 80 (per person) then CM 80-60 20
• BEP (FC)1,000/(CM)20 50
• So in order to break-even we will need a minimum
  of 50 persons to register

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Break-even Analysis to determine profit level
Example 100 people attending an event

• Fixed costs
• venue hire
• guest speakers Total 1,000
• Variable costs 60 per person
• printing
• food Total 6,000
• Revenue
• 80 registration per person Total 8,000
• (R)8,000 (VC)6,000 (FC)1,000 1,000

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Auditing

• Association Incorporation Act requirements
• Independent check
• Auditing the accounts