Budget constraints (1 Viewer)

SBAndy · Apr 8, 2017

I think the point is that the budget should take into account the fact that income will be down for May/June/July. Besides, the season ticket sales will give some revenue. The operating loss you've pointed out is exactly the issue - the trading income of ticket sales and TV rights are dwarfed by the running/maintenance costs. I get that the hole needs to be filled, and if I'm honest I would sell Ben Stevenson to cover this. But it's not as simple as a difference between profit/loss and cash flow, because ultimately we haven't made a profit for a long time.

ccfc92 · Apr 8, 2017

Grendel said:
I've explained.

I've shown links as to why companies can be shown as profitable but can then go bankrupt

I've shown an accountants view on this forum as to why the cash position would be potentially perilous

It's not my fault you cannot understand the difference between profitability, cash flow and break even statements.

I've not come out with any contradictions and have tried to explain as simply as I can the issues.

I can't be held responsible for the fact that you pretend to understand things but actually fail even in the basics.

I can't be blamed they having presented you with a dot to dot of 3 dots you can't even make it from 1 to 2 - I give up

No, you have missed the basics.

You always quote cash flow.

If you're a business with 9 months income, you budget for 12 months cost at 9 months income. You don't spend your 9 months income, and expect to last 12 months.

I've posted this a couple of times on this page of the debate, you've strategically ignored it. Then made out other posters can't grasp cash flow etc to belittle them.

I wonder if you'll ignore this post.

ccfc92 · Apr 8, 2017

SBAndy said:
I think the point is that the budget should take into account the fact that income will be down for May/June/July. Besides, the season ticket sales will give some revenue. The operating loss you've pointed out is exactly the issue - the trading income of ticket sales and TV rights are dwarfed by the running/maintenance costs. I get that the hole needs to be filled, and if I'm honest I would sell Ben Stevenson to cover this. But it's not as simple as a difference between profit/loss and cash flow, because ultimately we haven't made a profit for a long time.

Clearly you don't know cash flow

SBAndy · Apr 8, 2017

ccfc92 said:
Clearly you don't know cash flow

Ah, silly me. I'll Wikipedia it now.

Astute · Apr 8, 2017

Grendel said:
I've explained.

I've shown links as to why companies can be shown as profitable but can then go bankrupt

I've shown an accountants view on this forum as to why the cash position would be potentially perilous

It's not my fault you cannot understand the difference between profitability, cash flow and break even statements.

I've not come out with any contradictions and have tried to explain as simply as I can the issues.

I can't be held responsible for the fact that you pretend to understand things but actually fail even in the basics.

I can't be blamed they having presented you with a dot to dot of 3 dots you can't even make it from 1 to 2 - I give up

You explained nothing. You put a link to what wasn't said by yourself. Why not answer it in your own words?

Don't worry we all know that you contradict yourself at times.

ccfc92 · Apr 8, 2017

SBAndy said:
Ah, silly me. I'll Wikipedia it now.

Maybe once you've done that, you can enlighten us mere mortals :woot:

Income minus outgoings = ????

ccfc92 · Apr 8, 2017

Astute said:
You explained nothing. You put a link to what wasn't said by yourself. Why not answer it in your own words?

Don't worry we all know that you contradict yourself at times.

To be fair, didn't he admit (in one of his egomaniac rages) he was the manager of a loss making business? If so, maybe we shouldn't be debating business with a wannabe Alan Sugar.

SBAndy · Apr 8, 2017

ccfc92 said:
Income minus outgoings = ????

Cash flow? I dunno. Trick question maybe?

ccfc92 · Apr 8, 2017

SBAndy said:
Cash flow? I dunno. Trick question maybe?

If you'd like to post your bachelor's degree in finance as proof... otherwise we'll have to belittle you

Astute · Apr 8, 2017

ccfc92 said:
To be fair, didn't he admit (in one of his egomaniac rages) he was the manager of a loss making business? If so, maybe we shouldn't be debating business with a wannabe Alan Sugar.

Or can't bring himself to admit that Fisher is being economical with the truth when he has a go at anyone who calls him a liar.

SBAndy · Apr 8, 2017

ccfc92 said:
If you'd like to post your bachelor's degree in finance as proof... otherwise we'll have to belittle you

Funny you should say that, its Accounting & Financial Management.

Astute · Apr 8, 2017

SBAndy said:
Cash flow? I dunno. Trick question maybe?

Cash flow is when Fisher states what attendances we need to break even. When we exceed it he raises it by thousands.

ccfc92 · Apr 8, 2017

SBAndy said:
Funny you should say that, its Accounting & Financial Management.

Sorry, that's not on Grendel's approved qualifications, you're one of us

SBAndy · Apr 8, 2017

Astute said:
Cash flow is when Fisher states what attendances we need to break even. When we exceed it he raises it by thousands.

See that I never understood. To move breakeven turnout from 11k to 14k would need some serious miscalculation. A swing of 25%? Virtually impossible to do as a mistake. Coincidentally when we were significantly exceeding their quoted BE value.

ccfc92 · Apr 8, 2017

I'm assuming the simple point I've put across about budgeting for no income over the summer etc, plus SBAndy pointed it out, plus a few other points, was too much for Grendel

ccfc92 · Apr 8, 2017

SBAndy said:
See that I never understood. To move breakeven turnout from 11k to 14k would need some serious miscalculation. A swing of 25%? Virtually impossible to do as a mistake. Coincidentally when we were significantly exceeding their quoted BE value.

Please, don't apply logical mathematics to SISU finances.

Gazolba · Apr 8, 2017

better days said:
<snip>
Most relegated clubs are not in our position.
They just have poor players who aren't good enough or guys who are past their best
<snip>

I thought that was exactly OUR position.
I've followed this forum during every game this season and I've lost count of the number of times game spectators have said "this is the worst team I have ever seen", week after week, game after game, over and over again. So don't tell me we have good players. We are rock-bottom of the league. Winning one tin-pot cup cannot disguise the fact that we have a woeful team when measured over the entire season.

Kingokings204 · Apr 8, 2017

Got to admit, I think this is why they haven't released season tickets yet. Get some money coming in for May and June and then when July comes you have pre seasons friendlies.

Ccfc92 is right. You're budget is based on 12 months of the year not 9. Sure it's a valid point Grendel makes but you don't spend all your money by End of April and hope for the best come may and June. You know in advance there won't be any matches. You plan accordingly unless Grendel is saying sisu and fisher don't plan like this as it's common sense which I might therefore believe as they have proven themselves to be incompetent more than once.

Player sales can happen in may and June as can season ticket sales. My hunch is we will get enough money in to survive .......just.

The problem comes next season when we are homeless at the Ricoh and player sales are worth less again as we are in league 2. Unless we get relegated again and can cut costs again.

skybluetony176 · Apr 8, 2017

Kingokings204 said:
unless Grendel is saying sisu and fisher don't plan like this as it's common sense which I might therefore believe as they have proven themselves to be incompetent more than once.

Wash your mouth out. Grendull would never say something like that about SISU.

skybluetony176 · Apr 8, 2017

Don't forget, the club is now "cash flow positive" so the summer months won't be an issue. Source, Tim Fisher. Even recorded in SCG minutes IIRC.

clint van damme · Apr 8, 2017

ccfc92 said:
I'm not being funny, but even over 3 months (which I doubt there will be zero income) that's a loss of £425,000 in wages.

It will all be proportionate to yearly income etc. TF says we are running neutral, then that is calculated over 12 months surely? Not just the 9 months that people pay their ticket money?

If not, why set a budget? Might as well say we have £100,000 for a year, or £10,000,000 for the year if you don't allow for lulls in revenues.

I'd like to think this is the case.
What worries me is that poor cash flow through these months won't allow us to recruit early enough.
I honestly believe that allowing Robins to recruit early will be the difference between having a good crack at promotion next year or not.

dongonzalos · Apr 8, 2017

Grendel said:
The fact that many seem to want to retain the majority of this failed squad I find incredulous. Regardless of that though can anyone explain how it's at all realistic.

The wage bill will be completely slashed. I would guess a £500k reduction on a bill of £1.7m so how will out of contract players be offered new deals?

We need many new players to address a losing mentality.

I can't see us retaining hardly any of the out of contract players and big earners (Reid) must be transferred out.

I'd think we will lose the vast majority of the squad

Not that I'll be shedding any tears.

Anybody we can get a penny for will be transferred out.
Reid will go because people in division 3 will want him. I am not sure if we will get a fee for him though.

We will get money for

Haynes
Willis
Stevenson
Harries
Possibly DKE
Maybe even Ponticelli
I think we would have got some compo for Stokes as well if he was younger. Surprised we didn't get Stokes tied up after last year.

Grendel · Apr 8, 2017

Lack of cash flow was the reason we sold Maddison i

ccfc92 said:
No, you have missed the basics.

You always quote cash flow.

If you're a business with 9 months income, you budget for 12 months cost at 9 months income. You don't spend your 9 months income, and expect to last 12 months.

I've posted this a couple of times on this page of the debate, you've strategically ignored it. Then made out other posters can't grasp cash flow etc to belittle them.

I wonder if you'll ignore this post.

I seriously have not ignored anything. Sorry but the business will not budget on a one twelfth basis. It can't as its impossible to predict with any accuracy the real income generated and expenditure on squads can only be invested in summer months (when there is no income) and the January window. Last season its well known the club had to force a sale as the funds ran out

It would have not predicted having several managers, a new assistant manager to pay and it certainly will not have predicted a sharp drop in revenue in May / June with relegation massively impacting summer revenue

Look where we are now;

3 games to go. In reality we are going to get no more than £100,000 revenue from those games.

8 weeks until the end of May? That's what 8 weeks left until the accounts come out so a £1 million worth of payments to go out with £100,000 coming in? If you seriously think the club budgeted for that then good luck. So, assuming Wembley generated £600,000 and assuming that we even get that by then there is still a shortfall is there not?

The accounts will show an operating loss and we all know the £1 million is GP at best

Then what? Season ticket income in the summer but this be the main funding source for the whole season. So how much is that? 3,000 tickets lets say at £200 each? £600,000?

3 more months of expenses before more income - £1.3 million outgoings

No you are right - no problem with cash flow in this business

Astute · Apr 8, 2017

Astute said:
So why isn't it available cash? SISU don't take any. Fisher doesn't lie. He said we made a profit. Fisher works for free.

What is your take on it Grendel?

Grendel said:
No you are right - no problem with cash flow in this business

Any lack of cash flow is down to who runs our club and how they run it. So we don't sell season tickets during the closed season? All clubs have the same problem. It isn't just us.

And how about answering my question for once?

Grendel · Apr 8, 2017

Astute said:
Any lack of cash flow is down to who runs our club and how they run it. So we don't sell season tickets during the closed season? All clubs have the same problem. It isn't just us.

And how about answering my question for once?

With respect you answer no questions.

How will £600,000 of season ticket sales prop up a summer of squad rebuilding. Answer that

You seem really only interested in calling Timmy a liar.

Fisher admits we made an operating loss didn't he and the profit is gross profit. It's irrelevant to a discussion on budget isn't it?

The transfer season occurs when there is no income.

I've laid out a crude cash in and out estimate - is it accurate in your view (another question)

Why not just blame Bryan Richardson?

SBAndy · Apr 8, 2017

Grendel said:
Lack of cash flow was the reason we sold Maddison i

I seriously have not ignored anything. Sorry but the business will not budget on a one twelfth basis. It can't as its impossible to predict with any accuracy the real income generated and expenditure on squads can only be invested in summer months (when there is no income) and the January window. Last season its well known the club had to force a sale as the funds ran out

It would have not predicted having several managers, a new assistant manager to pay and it certainly will not have predicted a sharp drop in revenue in May / June with relegation massively impacting summer revenue

Look where we are now;

3 games to go. In reality we are going to get no more than £100,000 revenue from those games.

8 weeks until the end of May? That's what 8 weeks left until the accounts come out so a £1 million worth of payments to go out with £100,000 coming in? If you seriously think the club budgeted for that then good luck. So, assuming Wembley generated £600,000 and assuming that we even get that by then there is still a shortfall is there not?

The accounts will show an operating loss and we all know the £1 million is GP at best

Then what? Season ticket income in the summer but this be the main funding source for the whole season. So how much is that? 3,000 tickets lets say at £200 each? £600,000?

3 more months of expenses before more income - £1.3 million outgoings

No you are right - no problem with cash flow in this business

So a seasonal business would not forecast to retain cash to cover expenditure when income is low? Alrighty then.

Say you run a business and are planning a 2 week holiday, you save up money to cover the loss of income for those 2 weeks. You don't tell your mortgage and utilities providers that you won't be paying for those 2 weeks because you haven't got any cash coming in. Same principle.

Astute · Apr 8, 2017

Grendel said:
With respect you answer no questions.

How will £600,000 of season ticket sales prop up a summer of squad rebuilding. Answer that

You seem really only interested in calling Timmy a liar.

Fisher admits we made an operating loss didn't he and the profit is gross profit. It's irrelevant to a discussion on budget isn't it?

The transfer season occurs when there is no income.

I've laid out a crude cash in and out estimate - is it accurate in your view (another question)

Why not just blame Bryan Richardson?

I have answered every question. You have swerved every question. Yet you expect me to answer more as part of your swerve. I am not here to play your game.

You defend Fisher every time someone calls him a liar. He says we are cash flow positive. You say we are not. He says we are now making a profit. You say we are not.

And on the point of Richardson. You always defend him and say our problems are nothing to do with him. Just about everyone else knows differently. He was the one who put us 60m in debt and losing over 1m a month. He was the one who sold HR. He was the one who sold us the dream of a new stadium when we didn't have a pot to piss in. So how can you say our present problems have nothing to do with him.

ccfc92 · Apr 8, 2017

SBAndy said:
So a seasonal business would not forecast to retain cash to cover expenditure when income is low? Alrighty then.

Say you run a business and are planning a 2 week holiday, you save up money to cover the loss of income for those 2 weeks. You don't tell your mortgage and utilities providers that you won't be paying for those 2 weeks because you haven't got any cash coming in. Same principle.

I can't work out if he's not grasping this very simple point, or just arguing for the sake of it. Or both. Who knows.

Grendel · Apr 8, 2017

SBAndy said:
So a seasonal business would not forecast to retain cash to cover expenditure when income is low? Alrighty then.

Say you run a business and are planning a 2 week holiday, you save up money to cover the loss of income for those 2 weeks. You don't tell your mortgage and utilities providers that you won't be paying for those 2 weeks because you haven't got any cash coming in. Same principle.

I repeat we made operational losses last season and funded them through player sales.

if you think we have cash reserves that's your view I don't share the optimism.

Grendel · Apr 8, 2017

ccfc92 said:
I can't work out if he's not grasping this very simple point, or just arguing for the sake of it. Or both. Who knows.

I fully grasp it. It's also a rather poor analogy as this one thing that business would have which this one doesn't.

ccfc92 · Apr 8, 2017

Grendel said:
Lack of cash flow was the reason we sold Maddison i

I seriously have not ignored anything. Sorry but the business will not budget on a one twelfth basis. It can't as its impossible to predict with any accuracy the real income generated and expenditure on squads can only be invested in summer months (when there is no income) and the January window. Last season its well known the club had to force a sale as the funds ran out

It would have not predicted having several managers, a new assistant manager to pay and it certainly will not have predicted a sharp drop in revenue in May / June with relegation massively impacting summer revenue

Look where we are now;

3 games to go. In reality we are going to get no more than £100,000 revenue from those games.

8 weeks until the end of May? That's what 8 weeks left until the accounts come out so a £1 million worth of payments to go out with £100,000 coming in? If you seriously think the club budgeted for that then good luck. So, assuming Wembley generated £600,000 and assuming that we even get that by then there is still a shortfall is there not?

The accounts will show an operating loss and we all know the £1 million is GP at best

Then what? Season ticket income in the summer but this be the main funding source for the whole season. So how much is that? 3,000 tickets lets say at £200 each? £600,000?

3 more months of expenses before more income - £1.3 million outgoings

No you are right - no problem with cash flow in this business

I don't think anyone is arguing about cash flow.

You'd like to assume, they would have said right, we'll have X amount going out over the summer, with little income. Better leave some cash in the bank to offset the outgoings, no?

Grendel · Apr 8, 2017

Astute said:
I have answered every question. You have swerved every question. Yet you expect me to answer more as part of your swerve. I am not here to play your game.

You defend Fisher every time someone calls him a liar. He says we are cash flow positive. You say we are not. He says we are now making a profit. You say we are not.

And on the point of Richardson. You always defend him and say our problems are nothing to do with him. Just about everyone else knows differently. He was the one who put us 60m in debt and losing over 1m a month. He was the one who sold HR. He was the one who sold us the dream of a new stadium when we didn't have a pot to piss in. So how can you say our present problems have nothing to do with him.

Nope you've not answered any,l. You just seem to have a fixation with calling Timmy a liar and that's your only interest in this discussion.

ccfc92 · Apr 8, 2017

Grendel said:
I fully grasp it. It's also a rather poor analogy as this one thing that business would have which this one doesn't.

Hardly a poor analogy is it?

The club know what income will be coming in, then outgoings, over the summer. Why would you leave yourself open to cash flow issues when you could simply leave funds in the bank to offset cash flow?

You really think they don't have monthly budgets as well as yearly?

SBAndy · Apr 8, 2017

Grendel said:
I repeat we made operational losses last season and funded them through player sales.

if you think we have cash reserves that's your view I don't share the optimism.

And I have admitted there will be a hole that needs filling. But to suggest they haven't budgeted for the close season is either idiotic on your part or criminally negligent from a financial director.

Grendel · Apr 8, 2017

ccfc92 said:
I don't think anyone is arguing about cash flow.

You'd like to assume, they would have said right, we'll have X amount going out over the summer, with little income. Better leave some cash in the bank to offset the outgoings, no?

No they'd look to sell assets and they have had unforeseen outgoings with robins and his assistant.

They would require around 25% of revenue In the Fy to cover the summer unless there is significant reduction in playing staff.

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