FINANCIAL PERFORMANCE 1 Essay Example
Ball Sports Victoria Financial Performance
I will be looking at the financial performance of a basketball team over a period of two years and how it has impacted the performance of the team in terms of sports.For this case, woes addressing the ball sports Victoria academic performance were checked in line with the trends in income statements,balance sheets and cash flow statements over two year period so as to make conclusions that may cause positive impact to the team.
There is an increase in income generation over the two year period. This may be accounted to increase in the number of members who contribute a onetime membership fee upon joining the organization. Grants and sponsorships have been on the rise over the period due to the team’s performance hence gaining interest from people with deep pockets. The team has also engaged in other income generating activities which have led to the rise in income.TVDP has increased tremendously over the period. However the expenses have been a major blow to the team’s financial stability as it is slightly higher than the income. The main causes for its rise is the team organizing more events than initially and they are not paying off by providing more income.Furthermore, huge investments have been made on the junior’s basketball team as they are the next stars.
Over the two year period, the balance sheet has been on a reducing trend. From the reduction in assets especially cash equivalents. The non-current assets have dwindled as well minimally. Increase in liabilities which may be caused by the increasing of events held which had losses to the association. This also caused a decline in net assets and equity as a minimal surplus recorded in 2012 compared to 2011.The quoted value is lower in 2012 than 2011.This is due to engaging in events that cause a loss to the organization rather than profits. The board should therefore fund events that they are sure will bring revenue to increase the equity of the association.
Over the two year period, cash from operating activities has increased majorly caused by a higher customer base from the increased members while the returns have been used to pay the employees and suppliers in time. The GST payments have also increased which has also being a contributing factor. The investment activities cash flow has been on the increase over the period. However there has been insufficiency in cash flow as a reduction in cash equivalents at the beginning of the year. It has been declining over the period 2011-2012.The company is solvent although it is under financial pressure because it is able to make payments in time and even though left with lesser cash equivalents at the start of the year.
The economic state of the association is at a risk. If this goes on there is a high chance of acquiring insolvency worse still bankruptcy. The board should therefore critically analyses and determine which events are a major boost to their equity growth. Another aspect should be to improve the quotable value (equity) by engaging in more income generators for the team such as selling more team merchandise and providing refreshments to members during events. It was also concluded that ball sports Australia is not insolvent at the moment. Question that will be on everyone’s mind is whether the board will lead the team to more profits and improve the financial report?
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