Ajax Amsterdam FC Finance.

Ajax Amsterdam FC Finance.

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Ajax Amsterdam is a football club like any other that its primary purpose is to bring joy and enthusiasm to the millions of soccer fans across the world.  However, behind the scenes of actual football games on the pitch, the club is also a company like any other. As a company,itis expected that the club meets its financial obligations i.e., Maximise profits and the returns for their investors. Thus, as a corporate entity, financial statements like balance sheets, ratios, capital structure, profitability indexes, and cash-flow reports are essential.

(Peeters&Szymanski, 2014).

The balance sheet provides information on the club’s assets. In a football club, assets include the players and stadium. The balance sheet shows how these assets are financed. How they are funded, for instance, assets can be financed through bank loans or equity from the shareholders—the majority of football clubs across Europe are listed in the stock exchange markets.

The capital structure of the club is made in a way that assets are treated as current assets. Players in a football club are treated as current assets because they can easily be converted into cash within a year. There are long term assets like the stadium.

The financial ratios of the club give an indication of the club’s profitability, liquidity, and solidity. The liquidity ratios are able to indicate how the club is able to pay its debts in the short term or the long term. The profitability ratios very essential because it indicates if the club is making profits, or if there are any earning obtained from investments made.

The cash flow analysis gives the flow of funds across the various activities which the clubs are involved in. These activities could be investments made by the club e.g., investing in real estate or financing activities where the club finances its operations e.g., buying kits and trips for the players and traveling for tournaments.

References.

Peeters, T., & Szymanski, S. (2014). Financial fair play in European football. Economic Policy, 29(78), 343-390.

4 Types of Financial Statements | Explanation | Examples | Templates. Accounting-simplified.com. (2020). Retrieved 18 April 2020, from https://accounting-simplified.com/financial/statements/types.html.