ANALYSIS OF ACCOUNTS FOR 1997/98

Summary

The general presentation of the accounts is unacceptable. Over half the expenses (49,013) are under three items. This type of presentation is called "deaf & dumb accounts" in that they say nothing and invite no questions.

In the notes, the accountants make so many reservations, that the accounts must be in doubt.

If these were the accounts for a private business, the Inland Revenue would almost certainly request a meeting to discuss the allocation of individual items included in the 49,013 expenditure.

The local Inland Revenue should be advised if any individual has accepted cash payments in excess of actual expenses.

The balance sheet shows that the company is insolvent but is being allowed to trade as a going concern.

Trading account

Total income was 190,054

The Trading Account shows a Gross Profit Margin of 85,205 (50%). This together with the other income of 19,904 is favourable, and gives a firm foundation for a good net profit.

Stock levels are good.

These figures show the potential for a good living to a tenant or owner.

Profit & loss account

The Profit & Loss Account shows a meagre net profit, before depreciation, of only 1,630. (6,000 being written off from 96/97 due to an unrecoverable loss.) After depreciation, the club showed a loss of 25,428.

Three items, establishment expenses, general overheads and administration, account for 49,013 of the gross profit (over half!). These categories should be broken down to show the constituent items. Any category that contains two or more items, and is of more that 1,000, should be detailed.

It would appear that the directors, officers and committee members are not paid any fees, honorariums, expenses, or goods in kind, as no account of these items is given. It must be assumed, that they are "hidden" in the bulk figures totalling 49,013.

An amount of 835 is shown for stock taker's fees, yet nothing is shown for accountant's fees. Why are they hidden in the bulk figure of 49,013?

Sundry expenses, to cover minor items, were 5,676 (109/week. Almost equal to entertainment costs!). This amount should be detailed.

Labour costs were 39,280 (755/week), comprising 26,674 (513/week) for the steward plus on costs, and 12,606 (242/week) for casual and pot-man wages.

The club leases the premises for 6,000pa. This low expense should help profits.


PITSEA & VANGE RBL SOCIAL CLUB LTD. DATE 15/10/99

TRADING ACCOUNT FOR THE 12 MONTHS ENDED 30/9/98

 

SALES

Wet & Dry ....................170150

DIRECT COSTS

Wet & Dry.................... 85415

 

TOTAL OPENING STOCK.......... 5334

TOTAL CLOSING STOCK.......... 5804

 

COST OF SALES............... 84945

GROSS PROFIT ................85205

GROSS PROFIT% =................ 50%


PITSEA & VANGE RBL SOCIAL CLUB LTD. DATE 15/10/99

PROFIT/(-)LOSS ACCOUNT FOR THE 12 MONTHS ENDED 30/9/98

 

INCOME

Wet & Dry................... 170150

Subscriptions .................1763

Pool table.................... 3466

Machines ......................9233

Phones......................... 510

Visitors Fees.................. 202

Entertain.Comm................ 3075

Vat refund ....................1655

TOTAL INCOME................ 190054

 

EXPENDITURE

Wet & Dry.................... 85415

Cas/Pot Wages................ 12606

Stew.Wages/NI................ 26674

Entertainment................. 8205

Stocktaker .....................835

Establishment ................28076

Administration................ 5115

Sundry Expenses............... 5676

General O/H.................. 15822

Profit before ....depreciation 1630

 

DEPRECIATION

L/H Property Depn............ 11025

Fix & Equip. Depr............ 16621

Disp'l of F/Ass ...............-118

TOTAL DEPRECIATION........... 27528

TOTAL EXPENSES ..............215952

 

GROSS PROFIT/(-)LOSS........ -25898

TOTAL OPENING STOCK ...........5334

TOTAL CLOSING STOCK ...........5804

NETT PROFIT/(-)LOSS .........-25428

 

A/Cs INDEX