Saints march into black with $1.7 million profit

[joffaboy]

A good cash flow is more important than a huge profit.

Normally, the bigger the profit the better the cashflow.

A big fat lol to that

[If you are continually making losses then the cashflow will dry up.

Depends what you call 'continually'. I could get your business to make a loss for years and still be a going concern.

[Eventually you just run out of available money to use to pay the bills.

Profits have nothing at all to do with cash flow. Profit is an Accounting concept thats all.

Enron had massive profits all powered by mark to market profit recording and dodgey off book liability accounting.

[In theory, if you don't make a profit then you are relying on your ability to collect all monies to use to pay the bills - it doesn't work too well in the real world (ie in actuality and not theory). Invariably you run out of available cash to use, which is when your suppliers (players included) realize that you have 'problems'.

Sort of. However you can make ten mill in profit but be up sit creek if you dont collect it.

This is why the cowboys fcuk up in business. They think Sales equates to money in the bank.

[It would be absolute folly to budget on 'breaking even' as the slightest hiccup in your projections will see you plummet into a loss, and thereby put strain on your cashflow.

Mate, I worked from a non profit org for years that effectively budgeted for a zero profit, and it had 30 mill in the bank.

Budgets are only fortune telling, and to make the board feel better. You go off and forecast twice or three times a year, pear back come in ahead of budget and get your yearly bonus.

Do you think us accountants make money just from Salary.

[Mr Magic]

A good cash flow is more important than a huge profit.

Normally, the bigger the profit the better the cashflow.

A big fat lol to that

[If you are continually making losses then the cashflow will dry up.

Depends what you call 'continually'. I could get your business to make a loss for years and still be a going concern.

[Eventually you just run out of available money to use to pay the bills.

Profits have nothing at all to do with cash flow. Profit is an Accounting concept thats all.

Enron had massive profits all powered by mark to market profit recording and dodgey off book liability accounting.

[In theory, if you don't make a profit then you are relying on your ability to collect all monies to use to pay the bills - it doesn't work too well in the real world (ie in actuality and not theory). Invariably you run out of available cash to use, which is when your suppliers (players included) realize that you have 'problems'.

Sort of. However you can make ten mill in profit but be up sit creek if you dont collect it.

This is why the cowboys fcuk up in business. They think Sales equates to money in the bank.

[It would be absolute folly to budget on 'breaking even' as the slightest hiccup in your projections will see you plummet into a loss, and thereby put strain on your cashflow.

Mate, I worked from a non profit org for years that effectively budgeted for a zero profit, and it had 30 mill in the bank.

Budgets are only fortune telling, and to make the board feel better. You go off and forecast twice or three times a year, pear back come in ahead of budget and get your yearly bonus.

Do you think us accountants make money just from Salary.

All comments granted in accounting terms joffa.
My comments were based on the notion that the football club were collecting their revenue (sales of membership etc). and not incurring a huge debtor's lag in collections.

And yes, if you have the ability to borrow money from the banks (or other lending institutions) then you need never worry about operating profitably as long as your ability to borrow is still ok (like governments going into deficit and borrowing money on huge scales).

But sooner or later the institutions that have lent you the money will want to know if there is any possibility of them getting their money back, or even worse, if you are capable of funding the interest payments on those loans. If Lindsay FOx hadn't 'leaned' on the bank (ANZ?) back then would st Kilda even exist today? As it was we paid out our creditors to the tune of 7.5 cnts in every dollar owed (the player creditors got 22.5 cents). IIRC Carlton was one of those and thought about winding us up at the time by not accepting the payout scheme?

As a corporation I believe Football Clubs have to 'remain solvent', do they not? Continual losses bring that question into play.

Football Clubs are not charities or non-profit organizations either, so therefore practices that apply to those types of organizations do not apply to football clubs.

JOffa, in your opinion, is it better for St Kilda to run as a profitable business rather than one that breaks even at best? (I'm talking in practical terms and not theory.)

[joffaboy]

JOffa, in your opinion, is it better for St Kilda to run as a profitable business rather than one that breaks even at best? (I'm talking in practical terms and not theory.)

Hopefully I wasn't sounding too much like a smart arse MM

IMHO generally it is a better indicator to be profitable than running at a loss, especially when you are an entity that is audited.

However profit can be misleading. A few years back we ran at a 1.5 mill loss after writing off the Moorabbin stands, but our cash flow was fine.

It is a good sign certainly. And considering we have worthless assetts off our books and also considering i haven't seen the P&L or Bal Sheet for 2010, I would rather us in this position than not.

I suppose my answers were in responses to more than just your post, but the thread generally, apologies if you thought I was targetting you personally (which it probably looked like).

1.7 mill, all things being equal, will take that.

cheers.

[Eastern]

Hopefully I wasn't sounding too much like a smart arse

How could anyone ever think that of you !!

[Con Gorozidis]

It is a great result, it seems the days of debt are long gone, I can remember in the eighties there was constant talk about our future and financial viability

u sound like an irish finance minister. great result for saints. but dont get too cocky. bad times are never to far away once complacency sets in.