1. Basic Accounting and Financial Management for Sports Organisations. Ch.1 Introduction to The Study of This Module: The subject of sports finance can be defined as the study of the effective management of cash flows by sports organisations in pursuit of their organisational objectives. Four key aspects of the subject. 1. It’s a management subject concerned with the effective operation of sports organisations. 2. The focus on effective management. 3. The study of cash flows in sports organisations. 4. Deals with financial management in all types of sports organisations. A.Chatchai Masunsub MSc.Sport Management,Sheffield Hallam University, UK

2. Basic Accounting and Financial Management for Sports Organisations. The financial structure of all sports organisations. 1. Capital employed 2. Assets 3. Operating cash flow 4. Return to capital employed The overall cash flow of a sports organisations 1. Operating activities 2. Non-operating investments 3. Financing 4. Investment 5. Taxation 6. Services of finance A.Chatchai Masunsub MSc.Sport Management,Sheffield Hallam University, UK

3. Basic Accounting and Financial Management for Sports Organisations. Value in sports organisations The fundamental objective of a sports organisation is to maximise organisation value -include both profit-seeking sports business & not-for-profit sports organisation. 3 roles for accounting within a sports organisation 1. Identifying the key financial information 2. Measuring financial values 3. Communicating financial information Benefits of Accounting 1. Know the performance of the business in a time period 2. Know the status of the business firm 3. Able to assist management to analyse and decide logically by using accounting 4. Use accounting to calculate tax A.Chatchai Masunsub MSc.Sport Management,Sheffield Hallam University, UK

4. Basic Accounting and Financial Management for Sports Organisations. 3 broad types of accounting information 1. Financial accounting 2. Managerial accounting 3. Tax accounting Accounting Accounting is simply the means by which we measure and describe the results of economic activities (R.F. Meigs, et. Al.,1995) The record of business activities in a systematic way so that management can use accounting to make a business decision ( ขนิษฐา ชีวพัฒนพันธุ์, 2001) In the other word, it’s called ‘ Language of business’ Account System operates this way………………. A.Chatchai Masunsub MSc.Sport Management,Sheffield Hallam University, UK

5. Basic Accounting and Financial Management for Sports Organisations. The purpose of accounting the basic purpose of accounting is to provide decision makers with information useful in making economic decisions. Financial accounting -is determined with the recording and reporting of financial transactions for external needs (J. Becch & S. Chadwick, 2004) Managerial accounting -involves the provision of financial information for internal planning and decision-making A.Chatchai Masunsub MSc.Sport Management,Sheffield Hallam University, UK

6. Basic Accounting and Financial Management for Sports Organisations. Questions before starting a business ( รวีวรรณ นิพันธ์ประศาสน์, 2547) 1. What type of business is it?  Land, Buildings, Machines, Other equipment needed?  How much money needed?  Management plan? Long-term investment  Factors affecting decision-making such as size, timing and risk of cash flow in the future. It’s called ‘Capital Budgeting Decision’ 2. Source of Fund?  Where to find? Long-term debt (Bank loan, etc..) or Owner’s equity. What is the appropriate ratio between D/E as it affects risk of business. The sport organisation should choose the lower cost of capital and find many sources of fund. Financial Leverage = company use debts as source of funds for assets Company with high debt is …….. Helps share holders and higher return for them! This is called ‘Capital Structure Decision’ A.Chatchai Masunsub MSc.Sport Management,Sheffield Hallam University, UK

7. Basic Accounting and Financial Management for Sports Organisations. 3. How to manage working capital and cash? Working Capital = Current Assets = Cash, Account receivable, inventory and so on… Working capital management needs to be done daily to make sure the sport company has enough liquidity/cash to pay its creditors. How much cash needed for daily activities? Amount of inventory Source of fund for inventory Good manager find the right mach for the above!! It’s called ‘Working Capital Decision’ A.Chatchai Masunsub MSc.Sport Management,Sheffield Hallam University, UK

8. Basic Accounting and Financial Management for Sports Organisations. What is financial management? A.J. Keown, et.al.2000, suggest that it is a creation of economic value and wealth of organisation by doing 3 activities above emphasising on business decision-making to create maximum wealth of company. Business Structure 1. Sole proprietorship 2. Partnership General and limited 3. Limited company Why limited company is so popular? A.Chatchai Masunsub MSc.Sport Management,Sheffield Hallam University, UK

9. Basic Accounting and Financial Management for Sports Organisations. Vital decision-making in Finance 1. Investment decision (Most important) Use of fund 2. Financing decision Source of fund 3. Dividend decision Roles and functions of financial management 1. Responsibility to share holders 2. Responsibility to employees 3. Responsibility to creditors 4. Responsibility to government 5. Responsibility to society Roles Find source of fund and manage fund and short-term fund and also find the highest return. Functions Anticipation – Financial planning both long and short term plan Acquisition – Finding source of fund – lower cost Allocation A.Chatchai Masunsub MSc.Sport Management,Sheffield Hallam University, UK