OOTP 16 - Finance and Accounting
May 7, 2015 19:17:36 GMT -5
Derek _ Red Sox, BlueJaysGM_Fin, and 3 more like this
Post by Tim_GiantsGM on May 7, 2015 19:17:36 GMT -5
This post is more of an information related post than an advice related post, but I think this area is the proper area to share the results of my investigation. It is not intended to be that last word on the topic. Hopefully the information will answer questions and provide a better understanding of the enhanced finance and accounting information that now is an integral part of the game.
If the examples and information trigger additional questions that, when answered, help all of us achieve a better understanding, great!
Note that for reference purposes I uploaded a .pdf version.
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For background, using a solo league I recently created and fast-forwarded several seasons I examined the financial picture for several teams as of the beginning of pre-season.
I selected the D'backs for illustrative purposes because I believe this example captures all of the variables. Following are excerpts from the pages we have been discussing:
Team >> Front Office >> Finances >> Budget Information
Team >> Front Office >> Accounting (extract)
Note that the projected column first appears on the above screen at the beginning of the pre-season.
League >> Team Info >> Financial Report (extract)
Per the Finances display (top), the D'backs have $9,345,000 of projected budget room. They are in compliance with the PBL league rule. Per the League Financial Report display (bottom), the projected balance is $-8,625,459. Further, per the Accounting display (middle), the projected season profit/loss is $8,630,041.
Projected Budget Room displayed on the Finances page is calculated as follows:
Current budget ($84,000,000 per all three pages)
Less: Total expenses to date ($19,910,000 - scouting and player development expenses per the Accounting page)
Less: Remaining expenses ($54,745,000 - projected player, staff, and draft expenses per the Accounting page)
= Projected budget room ($9,345,000)
Note that the total of all expenses equals the projected total expenses displayed on the Accounting page.
Projected Balance on the Financial Report (Team Info >> Financial Report) is calculated as follows:
Projected season profit/loss ($8,630,041 per the Accounting page)
Plus/Less: Cash received/paid out in trades ($-507,500 per the Accounting page)
Less: Offered Contracts ($16,250,000 per the Finances page)
Less: Offered Bonuses ($498,000 per the Finances page)
= Projected balance ($-8,625,459)
Another way to compute projected balance uses the Revenue and Expenses sections of the Finances page.
Team >> Front Office >> Finances >> Revenue
Team >> Front Office >> Finances >> Expenses
Using these screens plus the cash received/paid out amount the calculation is as follows:
Projected total revenue ($83,285,041)
Less: Projected total expenses ($91,403,000)
Plus/Less: Cash received/paid out in trades ($-507,500 per the Accounting page)
= Projected balance ($-8,625,459)
My take-away at this point is that the projected balance amount reported on the Financial Report is meaningless. It does not equate to projected budget room. It does not equate to season profit/loss. And it does not consider beginning cash, so it does not equate to projected ending cash balance (projected total balance displayed on the Accounting page, which does not consider offered contracts and bonuses). I don't see that it provides useful information for team management purposes.
I suggest that we should continue to focus on the Projected Budget Room to determine whether we are in compliance with our league rule. Also, to determine whether a team is on track to be profitable or not focus on the Projected Season Profit/Loss amount.
If the examples and information trigger additional questions that, when answered, help all of us achieve a better understanding, great!
Note that for reference purposes I uploaded a .pdf version.
--------------------
For background, using a solo league I recently created and fast-forwarded several seasons I examined the financial picture for several teams as of the beginning of pre-season.
I selected the D'backs for illustrative purposes because I believe this example captures all of the variables. Following are excerpts from the pages we have been discussing:
Team >> Front Office >> Finances >> Budget Information
Team >> Front Office >> Accounting (extract)
Note that the projected column first appears on the above screen at the beginning of the pre-season.
League >> Team Info >> Financial Report (extract)
Per the Finances display (top), the D'backs have $9,345,000 of projected budget room. They are in compliance with the PBL league rule. Per the League Financial Report display (bottom), the projected balance is $-8,625,459. Further, per the Accounting display (middle), the projected season profit/loss is $8,630,041.
Projected Budget Room displayed on the Finances page is calculated as follows:
Current budget ($84,000,000 per all three pages)
Less: Total expenses to date ($19,910,000 - scouting and player development expenses per the Accounting page)
Less: Remaining expenses ($54,745,000 - projected player, staff, and draft expenses per the Accounting page)
= Projected budget room ($9,345,000)
Note that the total of all expenses equals the projected total expenses displayed on the Accounting page.
Projected Balance on the Financial Report (Team Info >> Financial Report) is calculated as follows:
Projected season profit/loss ($8,630,041 per the Accounting page)
Plus/Less: Cash received/paid out in trades ($-507,500 per the Accounting page)
Less: Offered Contracts ($16,250,000 per the Finances page)
Less: Offered Bonuses ($498,000 per the Finances page)
= Projected balance ($-8,625,459)
Another way to compute projected balance uses the Revenue and Expenses sections of the Finances page.
Team >> Front Office >> Finances >> Revenue
Team >> Front Office >> Finances >> Expenses
Using these screens plus the cash received/paid out amount the calculation is as follows:
Projected total revenue ($83,285,041)
Less: Projected total expenses ($91,403,000)
Plus/Less: Cash received/paid out in trades ($-507,500 per the Accounting page)
= Projected balance ($-8,625,459)
My take-away at this point is that the projected balance amount reported on the Financial Report is meaningless. It does not equate to projected budget room. It does not equate to season profit/loss. And it does not consider beginning cash, so it does not equate to projected ending cash balance (projected total balance displayed on the Accounting page, which does not consider offered contracts and bonuses). I don't see that it provides useful information for team management purposes.
I suggest that we should continue to focus on the Projected Budget Room to determine whether we are in compliance with our league rule. Also, to determine whether a team is on track to be profitable or not focus on the Projected Season Profit/Loss amount.