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.
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.
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