Sports Finance is the science or field of study of fund/ money management it deals with all the spending and monitoring its impact on their organizations. This includes proposing solutions to account for financial losses and ensuring that spending is continually optimized. Using up-to-the-minute reporting tool, sport finance managers must keep precise and detailed records. These are used to create future financial projections, improve the budgets and analyze the successes and failures that influence business decisions. Financial reports are used for business taxes.
Financial management in the sport industry relies on:
1) Strategy, planning and budgeting
2) Wise spending and reducing expenditures
3) Reporting and analysis
Sports managers oversee an athletic program. This may include athletic training, providing resources for athlete education.
Sports managers need to be familiar with finance so they can make sound decisions in at least five areas:
•Budgeting
•Cash flow
•Revenue
•Profits
•Operational expenditures
Budgeting involves planning for usual as well as unexpected expenses.
Cash flow management helps ensure that a company has enough money in the bank to make payroll or even take advantage of an opportunity with growth potential.
Familiarity with financial statements is important because managers need to communicate with finance and accounting.
The three most common documents:
•Income statement. . It shows the revenues and expenses, profits and losses of the enterprise.
•Balance sheet. Usually considered second most important, the balance sheet presents data that shows liquidity and capitalization.
•Statement of cash flows. It shows the inflows and outflows of cash during the reporting period.