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, many clubs deem these 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 players bought in have been relatively minor so the graph shows purely the fixed assets.
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 graph below show the balance between current assets and current
liabilities. There was a step change in the liabilities in 2003 when the hotel
"mortgage" first appeared on the scene. The liabilities are steadily
creeping up but this is more than matched by the rise in assets.
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, the hotel, 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 club being in an excellent position.
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 a mortgage. The graph for this is 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 figure is reducing which is good, however the Naismith money only took a small chunk out of it, and the size of this is still the biggest concern the club have.
The last graph shows all the assets of the club, against all the liabilities of
the club. The figures again show that things are improving as the debts are paid
off.
As a comparison Dundee United have Net Liabilities of close to £4m, Motherwell
Net Assets of £1.3m, and St Mirren Net Assets of £1.6m. Although St Mirren are
about to get a boost due to leaving Love Street. Hearts have a major problem with net liabilities of £25m.
