In a sport management role, you may find yourself in a position where you will need to analyze financial data and make important decisions based on that information. Imagine that you are in such a position, and that you need to present to stakeholders and explain the impact of a proposed project from a financial perspective. Having a solid foundation in financial and economic concepts will help you communicate financial information and its impacts in a meaningful way.
For Milestone Two, you will submit a draft of the budget proposal spreadsheet portion of the final project. You must use the Final Project Budget Spreadsheet template. This assignment is due in Module Five.
Executive Summary
Determine the sport organization’s financial health based on what you discovered, and support your response with information from the most recent balance sheet.
Estimate the costs that the sport organization will need to cover as a result of the proposed project, and explain how the estimate was reached.
Identify potential sources of revenue that the project will bring to the organization to fund the project, supported by specific examples.
Discuss economic impacts across departments for the additional costs incurred as a result of the proposed project.
Sample Answer
Executive Summary
The following executive summary will outline the financial health of a hypothetical sports organization, the costs associated with a proposed project, potential revenue streams, and the economic impacts across departments.
Financial Health
Based on the most recent balance sheet, our organization appears to be in a stable financial position. Key indicators of this stability include a healthy current ratio ($2.50) and a positive net income for the past three years. This shows our ability to meet short-term obligations and generate a profit. The balance sheet also indicates that our total assets ($15 million) significantly outweigh our total liabilities ($6 million), giving us a solid equity of $9 million. This strong foundation provides the necessary capital and confidence to move forward with a new project.
Potential Sources of Revenue
To fund this project, we have identified several potential sources of revenue that will be generated by the new facility:
Increased ticket and sponsorship revenue: The new facility will attract top-tier talent, leading to improved team performance and higher attendance. We anticipate a 15% increase in season ticket sales and the ability to secure new corporate sponsorships for the facility itself.
Facility rentals: The state-of-the-art facility can be rented out to other local teams, high school programs, or for community events. We project an average of $20,000 in rental income per month.
Youth development programs: The facility will host youth camps and clinics, creating a new revenue stream. We estimate this will generate an additional $150,000 annually.
Economic Impacts Across Departments
The additional costs and revenue from the new training facility will have a significant economic impact across various departments:
Operations Department: This department will incur increased costs for facility maintenance, utilities, and security. However, this will be offset by the potential to create a more efficient and technologically advanced workspace