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Finance for dummies 00:09 - Apr 9 with 4387 views

I have been trying like billio to follow and understand the thread started by judd - http://www.fansnetwork.co.uk/football/rochdale/forum/108641/page:3#.U0RxR2dOXFg
There are shedloads of questions that occur to me, mainly because, as the title to my thread suggests, I am a dummy in these matters. Rather than asking all of them, perhaps I can start with one of them. Can someone explain how the most recent figures from the Denehurst Park Rochdale Ltd. AGM, given by 49thseason -
http://companycheck.co.uk/company/02483618/DENEHURST-PARK-ROCHDALE-LIMITED/finan -

Year 2013
Cash £ 11
Net Worth £ 793,328
Total Current Liabilities £ 237,791
Total Current Assets £ 11,740

correlate with the Club statement of yesterday, 7th April 2014 - “Denehurst Park Stadium Company has been struggling financially for many years and the debts of the company are in excess of £670,000, and rising on a daily basis.”

How do the figures in the company report explain the fact that the DPR company is in excess of £670,000 in debt? There are obviously many contributors who understand how things work, but please can someone put it in simple terms? If Liabilities minus Assets =
£237,791 - £ 11,740 = £226, 051 (so £226, 051 in debt, , i.e. MINUS £226, 051), how come
(1) the net worth is given as PLUS £793,328, and
(2) the club statement says it is MINUS £670,000?

Sorry, just realised that is TWO questions!

Finance for dummies on 11:05 - Apr 9 with 4193 views

49thseason

As I understand it and I am not an accountant:

Net worth is the value placed on everything the company owns less any mortgages, loans etc. So the land value, machines for mowing the pitch etc. The problem with net worth is that it cannot be easily turned into cash without ending the business. Net worth is used as a measure of progress (or lack of it) by a company, the net worth of the stadium company is in decline.

Current assets include such things as the value of stock in the bars, debtors,anything that can be turned into cash fairly easily

"Current liabilities" are items that need to be paid within 12 months or less (Taxes, VAT, etc), what is not shown is the "Total Liabilities". There are obviously mounting long term debts (possibly loans to the Stadium company from RAFC or others (RMBC?) That are not due for re-payment but which are clearly growing, any interest payable on these loans (debts) would be shown as "current liabilities"

Dont forget, this balance sheet only goes to April 2013 so there may well be other factors to take into account over the last 12 months.

this explains more:
http://www.maslins.co.uk/guides/balance-sheet/

Finance for dummies on 13:57 - Apr 9 with 4040 views

love_the_dale

I have just come on to say thanks, 49th. That's really helpful. I'll let the cogs go round - they need a lot of oiling these days - and come back later.

Finance for dummies on 16:48 - Apr 9 with 3922 views

off2div1

If you're into football finance look @SwissRamble on twitter or his blog

http://swissramble.blogspot.co.uk/

The state of the football clubs in the championship makes amazing reading.

Finance for dummies on 21:41 - Apr 10 with 3653 views

love_the_dale

I am confused between what the Denehurst Park Stadium Company is responsible for and what the RAFC is responsible for. At the moment, I am trying to concentrate my thoughts on the Stadium company. Where does its income come from and what does its expenditure go on?

INCOME
I know some of its income comes from the rent paid by RAFC and RHornets. Where does the rest come from?
Does it get income from hiring out rooms for functions, or does that go to RAFC?

EXPENDITURE
The only thing I can be reasonably sure of is Insurance.
I would have also thought -
.....wages for the ground staff (Oli, etc.), (but RAFC put these among THEIR employees.)
.....security (stewards, police) - RAFC?
.....equipment and materials for pitch and stadium maintenance - RAFC?
.....directors’ remunerations

Are the above correct, and also what have I omitted?

I know the Profit and Loss Accounts for the DH company were -
for 2011 - '12 ..... MINUS 234,212
for 2012 - '13 ..... MINUS 306,672
but I don't have the figure for this year.

[Post edited 11 Apr 2014 15:27]

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