Turnover increase but net loss

[Hibs90]

https://www.edinburghnews.scotsman.com/sport/football/hibs/hibs-reveal-turnover-boost-but-record-net-loss-and-higher-operating-expenses-as-club-chief-makes-stability-call-4048845


Will let the experts discuss

[CentreLine]

https://www.edinburghnews.scotsman.com/sport/football/hibs/hibs-reveal-turnover-boost-but-record-net-loss-and-higher-operating-expenses-as-club-chief-makes-stability-call-4048845


Will let the experts discuss

I'm no accountant but I guess the "Cash in bank" is the mitigating factor here. What I don't understand, when we have the cash in the bank, why the parent company has felt the need to loan the football operation £2m? Something feels wrong about that.

[CapitalGreen]

I'm no accountant but I guess the "Cash in bank" is the mitigating factor here. What I don't understand, when we have the cash in the bank, why the parent company has felt the need to loan the football operation £2m? Something feels wrong about that.

The cash in the bank is essentially our season ticket income, it’s high at 30/06/22 as that’s when they are on sale. Over the course of the season that cash in the bank decreases to cover the cost of our operations. The loan is to pay for the refurbishment of hospitality which will be covered by an uplift in income that brings.

[Smartie]

I'm no accountant but I guess the "Cash in bank" is the mitigating factor here. What I don't understand, when we have the cash in the bank, why the parent company has felt the need to loan the football operation £2m? Something feels wrong about that.

I may be wrong and I am no expert (other than owning a business myself) but the majority of businesses who fail do so because they run out of cash. Cash in the bank is very important in order to weather whatever storm might be coming next. It's very important to be able to pay your bills as they become due.

So to borrow the money to cover any deficit, keeping a not insubstantial buffer amount in the bank whilst then working on how to ensure that there will be no such shortfall the following year simply sounds like good business sense to me?

[CropleyWasGod]

I'm no accountant but I guess the "Cash in bank" is the mitigating factor here. What I don't understand, when we have the cash in the bank, why the parent company has felt the need to loan the football operation £2m? Something feels wrong about that.

I haven't seen the accounts yet, but that makes good business sense to me. One of my go-to mantras always is "pay for something over the length of time you're going to use it".

In other words, running costs should be paid with current cash. Longer-term assets, such as vehicles and the improvements we made to the West etc, should be paid for over a longer term. If that means getting external finance, to be paid over a longer term, so be it.

[grunt]

I haven't seen the accounts yet, but that makes good business sense to me. One of my go-to mantras always is "pay for something over the length of time you're going to use it".
So, not "neither a borrower nor a lender be", then?