Has All The Cash Gone?

As reported on Sunday, Hereford United's latest set of accounts show a loss of £53,660. But in those figures it's clear that the amount of cash in the bank at year end has fallen from £729,313 to £451,735.

This fall is interesting as Graham Turner had built up a cash at bank figure of £929,891 as at May 31st 2008.

So from these figures the cash balance during Turner's last two years in charge has dropped by £478,156.

In any accounting year the amount of cash in the bank of owed to the bank can vary for several reasons. The figures for creditors and debtors can reflect this. Capitial expenditure or transfer income is another reason.

In the latest set of figures transfer income is stated at £278,792. This would include the sale of Toumani Diagouraga to Peterborough. And the amount paid out for loan players is £143,107, nearly half that of the previous year.

However for the cash position to have dropped by nearly half a million pounds when the net loss for the two years was only £27,000, suggests that some extra money has gone out in expenditure.

So where has it gone?

Here's part of the answer.

Directors remuneration and other benefits etc have risen by nearly £100,000 to £240,566.

Whereas one director had a money purchase retirement benefit in the previous year, these accounts show two directors with such benefits.

Legal fees are up from just £3,611 to £34,543.

The rest of the difference is mainly down to stocks and debtors. Close analysis reveals that the amount of cash in the year to May 2008 was balanced by low debtors, just £118,588. This year end the debtors figure is much higher, £254,929.

However, obviously, the club would have had a higher bank balance if the debt level was somewhat lower.

And the post-balance news that the Richardsons loan has been settled for £452,000, which means that the cash the club had on June 4th has now gone, may already have been overtaken by recent events such as the sale of Mathieu Manset and the recepits from the FA Cup run. Against that will be the settling of the Simon Davey contract.

So, has all the cash gone? Probably not, and the club is now free of long term debt.

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