The Football Club Relies on the Following
http://www.bristolrovers.co.uk
Bristol Rovers are a football club in League Two of the English Football League. They are not having a very good season at the moment and have just appointed a new manager Mark McGhee. Tony Wattola is the Finance Director in charge of the finances of the club.
The Football Club relies on the following:
To bring cash into the club: And have to pay the following:
The Cash Inflow for 2012 The Cash Outflow for 2012
Buying Players / 120,000Players Wages / 3,000,000
Staff Wages / 675,000
Rent / 69,000
Stock for resale / 570,000
Match expenses / 1,300,000
Admin expenses / 246,000
Interest on loans / 135,000
Match ticket sales / 2,500,000
Sale of players / 440,000
Food and Drink / 672,000
Merchandise / 383,000
Programs / 120,000
TV Coverage / 525,000
How do BRFC use Cash Flow Forecasting?
Bristol Rovers FC use Cash Flow Forecasting on a monthly basis. They have a cash flow forecast that shows the forecasted figures for the coming 12 months. At the end of every month they compare their cash flow forecast to their cash flow statement. This helps Tony to identify how accurate his forecasting is. This forward planning also helps him to identify any future problems that the club may face regarding his inability to pay his debts when they are due. This forward planning means that he can approach his bank manager well in advance, use this information to delay payment or try to increase revenue by selling more match tickets.
The problems related to forecasting cash flow:
Tony has a very difficult job in trying to predict revenue coming into the club because revenue could be affected by the following:
The weather
The teams performance
Whether the team stay in cup competitions or not
The opposition that they are due to play
However, the costs of the club are quite regular and only the variable costs such as stock will be affected by the issues stated above.
As you can see if you study the figures above carefully, Bristol Rovers currently have a negative cash flow forecast. The regular 5000 to 6000 fans that go to every home match would be devastated if their club were to fold or be relegated into The Conference. What factors do you think are important to the clubs survival?
The Task:
1) Introduce the assignment about BRFC.
2) Define Cash flow forecasting and relate this to BRFC
3) Outline the types of Cash Outflow and Cash Inflow that BRFC have. Use the figures supplied to analyse the cashflow forecast. Use graphs to obtain more presentation marks!
4) Analyse and evaluate how BRFC uses cashflow forecasting
5) Consider at least one other factor that is important to the survival of the business.
REMEMBER: Research, Presentation, Analysis and Evaluation – That is where the marks come from!!!!