Bluewater Football Association Financial Management

Situation Analysis and Problem Statement:

Bluewater Football Association (BFA) is a non-for-profit organization that operates on a seven-month period (February to August) each year. Currently, the organization has three team options for players ranging between the ages 11 and 16. However, with many requests from parents and players alike, BFA is looking to see if a fourth team for players ages 17 and 18 is feasible. After conducting local research within the Sarnia area, it was estimated that 35 players would register for this new team, thus reinstating and providing sufficient demand for establishing a fourth team.

Nevertheless, BFA must consider all possible costs and requirements before continuing with the expansion. As such, based on feasibility there are four options for financing the new team, which are evaluated throughout the report. The options are based on cash flows and outflows with major differences reflecting variances in registration fees and equipment policies. The four options are the following:

· Initial Option maintains the BFA’s current registration fees and equipment policy.

· Option 1 raises the registration fee in effort to increasing funds.

· Option 2 changes the equipment policy as a method of lowering additional costs.

· Option 3 a combination of options 1 and 2, increasing registration fees and changing equipment policy respectively.

After analyzing each option's cashflows, the findings will help assess the financial viability of adding a fourth team and provide enough data to create an achievable recommendation for BFA to implement.

1. Projected Cash Budget

BFA's operating period begins in February and ends in August resulting in a total of seven months. As per the given information from the Bluewater Football Association case, the following cash budget statement, cash receipts schedule and cash payment schedule has been prepared for the seven-month period (Exhibit A). The base cash budget displays how Bluewater Football Association is currently operating as well as the additional costs they would have to incur if they created the new varsity team. It includes the current registration fee of $425 and the cost of purchasing the equipment required for players. The total revenue retrieved from its 30 players is $14, 875, which is collected in the month of February. The team makes a total of $2000 from admission fees and concession stand income throughout the seven-month period. In addition, $1000 was collected in both June and July as these were the months the BFA teams played on their home turf. Concession stand costs averaged around 45% of sales ($450) and were credited in the months