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

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Presentation on theme: "CORPORATE ADVISORY DIVISION Financial Ration’s – Using ratios and benchmarking to improve club performance Tony Hood B.Ec C.A. M.B.A."— Presentation transcript:

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)

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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 Current Ratio Liquidity Ratio Working Capital(.26) Stock Turn * source Hunter & Central Coast Club Index 2008/09 Forsythes

6 Ibis World May 2010 Industry Report 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

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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


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