There are a number of ways at looking at debts. These are shown below. The one most often quoted is the last one on this page.
One way is to look at all the assets of the club. The assets are made up of the ground and the like, these are known as fixed assets. There are also the players, these are known as intangible assets. The worth of a player can go up or down and is less dependable than a fixed asset of land, or a building. The assets are shown below.
This shows that the assets are fairly flat. Only the addition of say a new stand would change much here.
As well as fixed assets there are things that are called current assets. Current assets covers money you could easily get your hands on. So this would be things like cash at the bank, or money owed to you that you expect to get in soon.
On the opposite side of things is how much the club owes, its liabilities.
These can again be split in to two, current liabilities and long-term
liabilities. Current liabilities are things that need to be paid within the next
year. Often these are not paid off within a year, and are just re-financed later
on. Long-term liabilities are things like mortgages, or other long term loans.
Long-term debt is less of an issue than short-term.
The first graph below show the balance between current assets and current
liabilities. Up to 2004 there seemed to be a steady worsening with the amounts
owed steadily increasing. In 2005 a new loan was taken out which swapped some of
the short term borrowing for long-term borrowing. This meant the current
(short-term) liabilities went down
The next thing to look at is whether the club has the ability to cover the money it owes. So if the business had to sell all the players, then the ground, everything, would this cover all the money they owe in the next year. This is graph of how this has progressed is shown below. The figures point to there not being anything of concern
The final way to look at debts is to look at the long term picture. This takes into account long term issues like paying off the mortgage. The graph for this are shown below. The first one shows how much debt the club owes. The debt is made up of the overdraft and all loans outstanding, be they short-term or long-term.
The last graph shows all the assets of the club, against all the liabilities of
the club. For the last few years the club has had a problem with this. They owe
more money, in the long term, than they have assets to cover. The problem seems
to have bottomed out though. The club focus is on keeping wage costs down,
trading well in the transfer market while trying to improve things on the pitch.
As a comparison Hibs have Net Assets of just under £5m, Aberdeen of just under
£3m, and Hearts a major problem with net liabilities of £25m.
