1. CORPORATE ADVISORY DIVISION Financial Ration’s – Using ratios and benchmarking to improve club performance Tony Hood B.Ec C.A. M.B.A

2. Ratio Analysis and Benchmarking What are they? -Relevant, meaningful ratios that provide insight into running the enterprise. Not usually absolute, rather the trend that matters -Aged creditor ledger or Creditor days of 45? -Benchmark/ others or yourself. How relevant is Mt Pritchard to your club? Where do we start? -Bank covenants. Times Interest Cover, Debt to Equity -Cash management ratios: Creditors Days, Stock Turn

3. Ratios that some clubs report on………but Gearing Ratio : Measures the percentage of Capital employed that is financed by debt and long term finance Current Ratio : An indication of a club’s ability to meet short term debt Liquidity Ratio : as per current ratio but excluding stock Equity Ratio: Indicates the level of leverage used by a club Working Capital Ratios Stock Turn ( I prefer stock days/creditor days and debtor days)

5. Other ratios -Industry Average Industry Average - 08/09 07/08 -Net Profit Per Machine ( after wages) 65.34% 70.15% -Bar Gross Margin (Excluding wages) 56.25% 57.83% -Bar Gross Margin ( Including Wages) 35.65% 34.01% -Gearing.58.57 -Current Ratio 1.90 2.41 -Liquidity Ratio1.28 1.35 -Working Capital(.26) 0.04 -Stock Turn13.56 15.04 -* source Hunter & Central Coast Club Index 2008/09 Forsythes

6. Ibis World May 2010 Industry Report 2009-10 Revenue : Liquor 21.6%, Gaming 56.1% Food 9.8% Revenue per employee $142,200 Wages/ Revenue25.72% Average Wage$36,569 Gaming Staff: 33% FT, 18% PT, 48.5% casual

7. Industry Costs ( as per Ibis World)

8. Key Issues in your club may include: Stock Control Minimisation of wastage Control over labour inputs and costs (particularly FT v PT and casual). Membership numbers, activity, duration, yield F&B, Membership, Gaming, other if any

10. What others do…. Customer counts at relevant venues Assessment of competitors actions and strategies Knowing thyself and knowing they enemy Use of sampling for knowledge Research monitoring (White/Blue) Analysis of Market 10- 3, 3- 9, Saturdays etc Wastage reports, rules for waste stock