Rubbish

[Snake]

The accounts in year ending June 2010 showed a turnover of £2.614m but we only spent £1,964m of that. i.e. a profit of £0.65m was made and used to pay debts, not footballers.

Don’t get me wrong, I’m not saying that isn’t prudent, just pointing out that our increased revenue since then does not mean an increased player budget.

It means that we hit the wage cap were unable to spend any more on players even if we wanted to, so there was nothing left to spend on and a profit was made.

I can perhaps accept Snake misinterpreting the accounts, but after £650K of operating income, there are £741K of administrative expenses (presumably rent, rates, service charge, Kelvin etc), leaving a loss of £91K. The £531K player transfer profit (Whitehead) was perhaps used to repay debt, but not WPL debt so far as I know.

Where did I misinterpret the accounts? I was simply pointing out the fact that turnover does not equal player budget.

On the matter of finances, it’s good to hear that Bridle have [url=http&#58//news&#46bbc&#46co&#46uk/sport1/hi/football/15941216&#46stm]“no intention to change anything

[slappy]

It means that we hit the wage cap were unable to spend any more on players even if we wanted to, so there was nothing left to spend on and a profit was made.

I can perhaps accept Snake misinterpreting the accounts, but after £650K of operating income, there are £741K of administrative expenses (presumably rent, rates, service charge, Kelvin etc), leaving a loss of £91K. The £531K player transfer profit (Whitehead) was perhaps used to repay debt, but not WPL debt so far as I know.

Where did I misinterpret the accounts? I was simply pointing out the fact that turnover does not equal player budget.

On the matter of finances, it’s good to hear that Bridle have [url=http&#58//news&#46bbc&#46co&#46uk/sport1/hi/football/15941216&#46stm]“no intention to change anything

[Snake]

I can perhaps accept Snake misinterpreting the accounts, but after £650K of operating income, there are £741K of administrative expenses (presumably rent, rates, service charge, Kelvin etc), leaving a loss of £91K. The £531K player transfer profit (Whitehead) was perhaps used to repay debt, but not WPL debt so far as I know.

Where did I misinterpret the accounts? I was simply pointing out the fact that turnover does not equal player budget.

On the matter of finances, it’s good to hear that Bridle have [url=http&#58//news&#46bbc&#46co&#46uk/sport1/hi/football/15941216&#46stm]“no intention to change anything

[slappy]

But the £650K of gross profit is before company overheads such as rent, rates, service charge, admin staff wages and salaries. The final profit for the year was £403K - which I think repaid bank loans/overdrafts/ rent arrears etc rather than any WPL debt.

[SmileyMan]

Ok, so we started the year owing £'x' ('x' being millions) then had a surplus of £650,000 so we didn't end the year owing £'x' minus £650,000. Don't follow you there. Did the club therefore give £650,000 to charity?

As I suspect you know, corporate finance doesn't work like that. If you have a loan of £1,000,000 and a cash surplus of £650,000 then you have exactly those two things. You can combine them if you like to show that you have a net worth of negative £350,000 but that is not the same as paying off debt, and in terms of running the company, it's a useless vanity figure. Unless your debt facility has an option for early partial repayment (and most commerical loans have such stiff penalties for doing so that it's hardly worth the expense) then you haven't repaid debt.

[Snake]

But the £650K of gross profit is before company overheads such as rent, rates, service charge, admin staff wages and salaries. The final profit for the year was £403K - which I think repaid bank loans/overdrafts/ rent arrears etc rather than any WPL debt.

Thank you, so it was used to repay debt as I'd class a loan or overdraft as a debt (and please note that at no time did I say it was used to repay WPL).

[slappy]

But the £650K gross profit was used up by £741K of admin expenses.

[GodalmingYellow]

But the £650K of gross profit is before company overheads such as rent, rates, service charge, admin staff wages and salaries. The final profit for the year was £403K - which I think repaid bank loans/overdrafts/ rent arrears etc rather than any WPL debt.

Thank you, so it was used to repay debt as I'd class a loan or overdraft as a debt (and please note that at no time did I say it was used to repay WPL).

Can I just make a technical point? I made the point earlier but it hasn't been picked up on.

Profit does not, and never can be used to, repay debt. Debt is a balance sheet statistic, profit and loss is a p&ampl statistic, so they have little to do with each other.

The only affect that profit or loss has on a balance sheet is in changing the profit &amp loss reserve balance.

Cash is used to repay debt.

Profit might generate cash to repay debt, but then it might not, because there is often only a very tenuous relationship between cash and profit or loss.

Also don't get net liabilities confused with debt, because they are not the same thing.

Net liabilities can be reduced by increasing assets, or reducing debt, or more commonly a mixture of both.

The £650k profit being discussed was the club's gross profit, not net profit. Gross profit is simply a statistic to determine the extent to whch the trading activities of the club are profitable and the contribution to overheads, and has no effect on anything else.

The club made £403k net profit, which again was not used to repay debt because cash repays debt.

In actual fact, £556k of debt was repaid by the club, but a further £343k of debt was advanced to the club, so overall debt was reduced by £213k.

Net liabilities were reduced by a further £190k as a result of increases in assets, which makes up the total of £403k change to the profit and loss reserve as a result of the net profit.

And to confirm what Snake said, WPL debt was not repaid.

[Snake]

But the £650K gross profit was used up by £741K of admin expenses.

But with £531,232 for Deano related business the net profit for the year was £403,119.

Or am I looking at a forged set of accounts obtained from Companies House?