1.

0 Company Background
Arsenal Holding Limited is a professional football club that is the subsidiaries of
Kroenke Sports & Entertainment. AFC is based in Islington, London, England, that plays in the
Premier League, the top flight of English football. The club has won 13 league titles, a record 13
FA Cups, 2 League Cups, 15 FA Community Shields, 1 League Centenary Trophy, 1 UEFA Cup
Winners’ Cup and 1 Inter-Cities Fairs Cup.
In 1886, Woolwich munitions workers founded the club as Dial Square. In 1913, the club
crossed the city to Arsenal Stadium in Highbury, becoming close neighbors of Tottenham
Hotspur, and creating the North London derby. In 2006, they moved to the nearby Emirates
Stadium. In terms of revenue, Arsenal is the ninth highest-earning football club in the world,
earned €487.6m in 2016–17 season. Based on social media activity from 2014 to 2015, Arsenal's
fanbase is the fifth largest in the world. In 2018, Forbes estimated the club was the third most
valuable in England, with the club being worth $2.24 billion.
The revenue of AFC includes gate and other match day revenue, broadcasting, retail and
licensing, commercial, property development and player trading.
Tottenham Hotspur Limited or Spurs is a professional club that is the subsidiaries of
ENIC (English National Investment Company). Spurs is an English professional football club
in Tottenham, London, which competes in the Premier League. Tottenham Hotspur Stadium has
been the club's home ground since April 2019, replacing their former home of White Hart Lane,
which had been demolished to make way for the new stadium on the same site. Their training
ground is on Hotspur Way in Bulls Cross in the London Borough of Enfield.
Spurs was founded in 1882. In total, Spurs have won two league titles, eight FA Cups,
four League Cups, seven FA Community Shields, one European Cup Winners' Cup and
two UEFA Cups. Tottenham were also the runners-up of the 2018–19 UEFA Champions
League competition. The club has a long-standing rivalry with nearby club Arsenal, with head-
to-head fixtures known as the North London derby.
The revenue of Hotspur includes match receipts, UEFA prize money, TV and media and
commercial.
Manchester United plc is a professional football club based in Old Trafford, Greater
Manchester, England, that competes in the Premier League, the top flight of English football.
Nicknamed "the Red Devils", the club was founded as Newton Heath LYR Football Club in
1878, changed its name to Manchester United in 1902 and moved to its current stadium, Old
Trafford, in 1910.
Manchester United have won more trophies than any other club in English football, [5][6]
with a record 20 League titles, 12 FA Cups, five League Cups and a record 21 FA Community
Shields. United have also won three UEFA Champions Leagues, one UEFA Europa League, one
UEFA Cup Winners' Cup, one UEFA Super Cup, one Intercontinental Cup, and one FIFA Club
World Cup. In 1998–99, the club became the first in the history of English football to achieve the
continental European treble. By winning the UEFA Europa League in 2016–17, they became one
of five clubs to have won all three main UEFA club competitions.

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 The 1958 Munich air disaster claimed the lives of eight players. In 1968, under the
management of Matt Busby, Manchester United became the first English football club to win the
European Cup. Alex Ferguson won 38 trophies as manager, including 13 Premier League titles, 5
FA Cups and 2 UEFA Champions Leagues, between 1986 and 2013 when he announced his
retirement.
Manchester United was the highest-earning football club in the world for 2016–17, with
annual revenue of €676.3 million, and the world's third most valuable football club in 2019,
valued at £3.15 billion ($3.81 billion). As of June 2015, it is the world's most valuable football
brand, estimated to be worth $1.2 billion. After being floated on the London Stock Exchange in
1991, the club was purchased by Malcolm Glazer in May 2005 in a deal valuing the club at
almost £800 million, after which the company was taken private again, before going public once
more in August 2012, when they made an initial public offering on the New York Stock
Exchange.
The revenue of Manchester United includes commercial, broadcasting and match day.

2.0 Industry Analysis

Figure 1.0: 5 Porter's five forces applied to the football club

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Competition intensity is
measured based on the rivalry
between football teams.
This may typically concern
areas such as
national/international
competitions, or
football player
transfer/acquisition.
Competition intensity is measured based on the rivalry between football teams. This may
typically concern areas such as national/international competitions, or football player
transfer/acquisition.

- New entry clubs who

reposition themselves and
their objectives.
- . Substitute products
which include all other
3
 professional sports. Football
though
- is characterized by the high
fidelity of its customers at
both the sport and club
- levels.
- . Buyers are also
supporters with little will to
“punish” their teams for not
- delivering their promises
and standing by them in
times of difficulty.
- This essentially social
phenomenon means that
contrary to conventional
- consumers, football ones
have comparatively
4
 diminished control/power
over
- both the industry and the
business (club).
- . Suppliers in football can
be categorized into
technical/economic
suppliers and
- performance suppliers
(players). The first group
supply various services,
from
- maintenance of stadiums to
management of sports
equipment, sponsorships,

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 - TV coverage, etc. This is a
heterogeneous category
with different powers for
- each supplier, with the
highest being the
broadcasting power.
-
New entry clubs who reposition themselves and their objectives.

Substitute products which include all other professional sports. Football is characterized
by the high fidelity of its customers at both the sport and club levels.

Buyers are also supporters with little to "punish" their teams for not delivering their
promises and standing by them in times of difficulty. This essentially social phenomenon means
that contrary to conventional consumers, football has comparatively diminished control and
power over both the industry and the club.

Suppliers in football can be categorized into technical/economic suppliers and

performance suppliers (players). The first group supplies various services, from the maintenance
of stadiums to management of sports equipment, sponsorships, TV coverage, etc. This is a
different category with different powers for each supplier, with the highest being the
broadcasting power. The second group is composed of football players that have very high
power.

6
3.0 Financial Statement Analysis

3.1 Comparing across time

Figure 1.1: Comparing across the time of Arsenal Holding Limited 2016-2018

Figure 1.1 shows the comparison of Arsenal Turnover from 2016 to 2018. During 2016 to
2017, the turnover had gradually increased from approximately £350,000,000 to £430,000,000
and from 2017 to 2018, the turnover had gradually decreased from £430,000,000 to
£410,000,000.

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 Figure 1.2 Comparing Revenue Category of Arsenal Holding Limited 2016-2018

In 2016, Arsenal gained the lowest revenue, because of the poor performance of football
clubs in 2016 compared with the recent 2 years. In 2016, Arsenal finished at the 5 th ranking of
the English Premier League, also they became the winner of the FA cup, 5 th round of EFL cup
and 16th round of UEFA Champion League. As the broadcasting revenue and commercial
resulted in Figure 1.2 that they can gain the lowest revenue of broadcasting and commercial in
2016.

In 2017, Arsenal gained the highest revenue, because of the good performance of the
football club in 2017. In 2017, Arsenal finished at the 6 th ranking of the English Premier League,
also they reached the 3rd round of FA cup, reached the semi-final of the EFL Cup, reached the
semi-final of UEFA Europa League and become the winner of community shield. As the
broadcasting revenue and commercial resulted in Figure 1.2 that they can gain the highest
revenue of broadcasting and commercial in 2017.

In 2018, Arsenal gained the 2nd highest revenue, because of the performance of the
football club in 2018. In 2018, Arsenal finished at the 5 th ranking of the English Premier League,
also they reached the 4th round of FA cup, reached the semi-final of the EFL Cup, semi-final of
UEFA Europa League. As the broadcasting and commercial resulted in Figure 1.2 that they can
gain the 2nd highest revenue of broadcasting and commercial in 2018.

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 Figure 1.3: Comparing across the time of Manchester United plc in 2016-2018

Figure 1.3 shows the comparison of Manchester United plc from 2016 to 2018. During
2016 to 2017, the revenue had gradually increased from approximately £510,000,000 to
£580,000,000 and from 2017 to 2018, the turnover had gradually increased from £580,000,000 to
£590,000,000.

Figure 1.4 Comparing Revenue Category of Manchester United plc in 2016-2018

In 2016-2017, the broadcasting revenue of the club was gradually increased from
£140,000 to £190,000, because of the good performance of the football club in the season of
2016-2017. In 2016, Manchester United finished at the 6 th ranking of English Premier League,
also they reached to the Quarter-Finals of FA Cup, winner of the EFL cup, winner of community
shield and winner of UEFA Europa League.

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 As the graph resulted in Figure 1.3 that the club was able to gain the lowest revenue in
2016 compared with the recent 2 years. The broadcasting revenue was able to gain the lowest
compared with the rest of the recent 2 years. However, since the football season was extended to
2017 and the club had done a good performance, so the broadcasting revenue was gradually
increased to 2017.

In 2017-2018, Manchester United had done an inferior performance compared with the
season of 2016-2017. In 2017-2018, Manchester United finished at the 2nd ranking of English
Premier League, also they reached to the 2 nd ranked of FA Cup, 5th round of EFL Cup, 16th round
of UEFA Champion League and 2nd ranked of UEFA Super Cup. Even they had done an inferior
performance compared with the season of 2016-2017, the revenue was able to increase the
broadcasting revenue as it results in Figure 1.4.

Figure 1.5: Comparing across the time of Tottenham Hotspur Limited in 2016-2018

Figure 1.5, shows the comparison of Tottenham Hotspur Limited from 2016 to 2018. The
revenue had gradually increased from £200,000,000 to £370,000,000.

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 Figure 1.6 Comparing Revenue Category of Tottenham Hotspur Limited in 2016-2018

In 2016-2017, the TV and media revenue of the club was gradually increased
from £90,000 to £140,000, because of the good performance of the football club in the season of
2016-2017. In 2016, Tottenham Hotspur finished at the 2nd ranking of English Premier League,
also they reached to the Semi-Finals of FA Cup, 4th round of EFL cup and reached to the 32nd
round of UEFA Europa League.

In 2017-2018, the club had improved the performance. They finished at the 3 rd ranking of
the English Premier League, also they reached to the Semi-Finals of FA Cup, 4 th round of EFL
cup and reached to the 16th round of UEFA Champion League. According to the performance
improvement, the company revenue had increased as it resulted in Figure 1.5 and the
broadcasting revenue increased in Figure 1.6.
3.2 Comparing Across Companies

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 Figure 1.7 Comparing Across Companies

In Figure 1.7, the graph shows the revenue comparison of 3 companies, the graph shows
that Manchester United plc has the highest revenue comparing with the rest of the companies
while Arsenal was on the 2nd ranking and Spur was on the 3rd ranking.

3.2.1 Component Percentages

Figure 1.8: Comparing Component Percentages in 2016

In Figure 1.8, the graph illustrates the comparison of component percentages in 2016. In
2016, Manchester United plc had the best financial performance in 2016 compared with the rest
of 2 companies. Tottenham Hotspur Limited had the 2nd best of financial performance in 2016
while Arsenal Holding Limited had the poorest financial performance compared with the rest of
2 companies.

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 Figure 1.9: Comparing Component Percentages in 2017

But in 2017, the financial performance of Arsenal Holding Limited was improved. In
2017, Manchester United plc was remaining the best of financial performance in 2017 comparing
with the rest of 2 companies while Tottenham Hotspur Limited was remaining the 2 nd best of
financial performance.

Figure 2.0: Comparing Component Percentages in 2018

In 2018, the financial performance of Arsenal Holding Limited is declining while

Manchester United got the poorest financial performance compared with the rest of 2 companies.
Tottenham Hotspur Limited got the best financial performance instead.

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 Figure 2.1: Comparing Financial Position in 2016

In 2016, even Arsenal Holding Limited got the lowest Income in 2016 as shown in Figure
1.8, but they had a higher total asset than Tottenham Hotspur Limited in Figure 2.1. However,
the liabilities of Tottenham Hotspur Limited is lower than Arsenal Holding Limited. Manchester
is remaining a better financial position than the rest of the team.

Figure 2.2 Comparing Financial Position in 2017

In 2017, Arsenal Holding Limited had a little bit higher asset than Tottenham Hotspur
Limited while the Liabilities had a little bit higher liabilities than Arsenal Holding Limited.
Arsenal Holding Limited seems to be a better financial position than Tottenham Hotspur. While
Manchester United plc is remaining the best financial performance.

14
 Figure 2.3 Comparing Financial Position in 2018

In 2018, Tottenham Hotspur Limited had a higher asset and higher liabilities than Arsenal
Holding Limited. But the total Equity, Arsenal seems to have more total equity than Tottenham
Hotspur Limited.

3.3 Horizontal and Vertical Analysis

3.3.1 Horizontal Analysis of Income Statement of Arsenal Holding Limited

On the Horizontal Analysis of Income Statement of Arsenal as it illustrated on Appendix

16, it is illustrated that the comprehensive revenue was increased by 19.92% during 2016-2017.
Simultaneously, the operating expenses had been decreased and the operating profit was able to
increase by 294.16%. Also, it was able to increase the profit before taxation by 1455.88%. From
the reduction of operating expenses, it effects comprehensive income to be increased by
1183.89% as well.

During 2017-2018, it illustrated on Appendix 17, the comprehensive revenue of the

companies had been decreased by 4.88%. Simultaneously, the operating expenses had been
decreased by 19.71% and the operating profit was decreased by 180.81%. However, the profit
before taxation was increased by 57.41% and the profit after taxation increased by 60.27%.

3.3.2 Vertical Analysis of Income Statement of Arsenal Holding Limited

On vertical analysis of income statement during 2016-2018, it illustrated on Appendix 18,

the component percentage of operating expense was increased from 95.46% to 109.57%. For
profit before taxation, the component percentage of profit before taxation was increased from

15
0.80% to 17.28%. And it makes the component percentage of comprehensive income increased
from 0.77% to 13.91%.

3.3.3 Horizontal Analysis of Balance Sheet of Arsenal Holding Limited

On horizontal analysis of balance sheet during 2016-2017, it illustrated on Appendix 19,

the fixed asset was increased by 8.03% and for the current asset was increased by 0.78%. From
the increasing of fixed asset and the current asset, it effects the total assets to be increased as
well. For the total liabilities, it was decreased by 5.18% and for total stockholder’s equity, it was
increased by 10.76%.

During 2017-2018, the fixed asset was increased by 8.17% and the current asset was
increased by 35.45% as well. For the total liabilities, it was increased by 16.92% and for total
stockholder’s equity, it was increased by 16.36%.

3.3.4 Vertical Analysis of Balance Sheet of Arsenal Holding Limited

For Vertical analysis of balance sheet during 2016-2018, it illustrated on Appendix 21,
the component percentage of fixed asset was fluctuated around 65.26%, 69.96% and 65.03%.
Also the component percentage of current assets was fluctuated around 34.74%, 30.04% and
34.97%. Since the fluctuation of the fixed asset and the current asset, it makes the total assets
fluctuated as well.

For the liabilities, the component percentage of liabilities was fluctuated around 62.61%
and 59.19%. For the total stockholder’s equity, it was fluctuated around 37.39% and 41.09%.

3.3.5 Horizontal Analysis of Income Statement of Manchester United plc 2016-2017

For Horizontal Analysis of Income Statement of Manchester United during 2016-2017, it

is illustrated on Appendix 22, the revenue was increased by 12.78% and the operating expenses
was decreased by 17.08%. From the increasing of revenue and the decreasing of operating
expenses, it effects the operating profit to be increased as well. For the profit before tax, it is
increased by 15.78% and the profit was increased by 7.71%.

3.3.6 Horizontal Analysis of Income Statement of Manchester United plc 2017-2018

For Horizontal Analysis of Income Statement of Manchester United during 2017-2018, it

is illustrated on Appendix 23, the revenue was increased by 1.52% and the operating expenses
decreased by 10.3%. From the increasing revenue and the decreasing of operating expenses, it
effects the operating profit to be decreased by 45.39%. For the profit before tax, it is decreased
by 53.84% and it effects the profit decreased by 195.13% as well.

16
3.3.7 Vertical Analysis of Income Statement of Manchester United plc 2016-2018

For the Vertical Analysis of Income Statement of Manchester United plc, it is illustrated
on Appendix 24. It is illustrated that the component percentage of operating profit was fluctuated
around 13.36% and 7.48%. For the profit before taxation, the component percentage was
fluctuated around 9.48% and 4.42%. For the taxation expense, it was fluctuated around 2.42%
and 10.74%. For the profit, it fluctuated around 7.06% and 6.32%.

3.3.8 Horizontal Analysis of Balance Sheet of Manchester United plc

For the Horizontal Analysis of balance sheet of Manchester United plc during 2016-2017,
it is illustrated on Appendix 25. It is illustrated that the non-current asset was increased by 4.62%
and the current asset was increased by 8.78%. From the increasing of current asset and non-
current asset, it effects the increasing of total assets. The total equity was increased by 4.05%.
The non-current liabilities was increased by 8.17% and the current liabilities was increased by
2.55%.

For the Horizontal Analysis of balance sheet of Manchester United plc during 2017-2018,
it is illustrated on Appendix 26. It is illustrated that the non-current asset was decreased by
0.22% and the current asset was increased by 3.66%. From the decreasing of non-current asset
and the increasing of current asset, it effects the total assets to be increased by 0.79%. For the
total equity, it was decreased by 12.31%. The non-current liabilities increased by 2.17% and the
current liabilities increased by 10.81%.

3.3.9 Vertical Analysis of Balance Sheet of Manchester United plc

For vertical analysis of balance sheet of Manchester plc during 2016-2018, it is illustrated
on Appendix 27. It is illustrated that component percentage of non-current assets was fluctuated
about 74.75% and 73.26%. For the component percentage of current assets was fluctuated about
25.25% and 26.74%. For the non-current liabilities, the component percentage was about 40.63%
and 42.46%. For the current liabilities, the component percentage was about 27.81% and
30.04%.

3.3.10 Horizontal Analysis of Income Statement of Tottenham Hotspur

For Horizontal Analysis of income statement of Tottenham Hotspur during 2016-2017, it

is illustrated on Appendix 28. It is illustrated that the revenue had been increased by 46.03% and
the operating expenses was increased by 42.46%. From the increasing of the revenue, it effects
the operating profit to be increased by 90.56%. For the profit before taxation, it was increased by
50.55% but the taxation was decreased by 208.13%. From the reduction of taxes, it is able to
increase the profit by 24.73% during 2016-2017.

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 During 2017-2018, it is illustrated on Appendix 29 that the revenue was increased by
24.28% and the operating expenses increased by 7.22%. However the increasing operating
expenses, it effects the operating profit to be increased by 183.69%. For the profit before
taxation, it was increased by 139.97%. However the taxation was decreased by 55.62% and it
effects the profit to be increased by 174.11% during 2017-2018.

3.3.11 Vertical Analysis of Income Statement of Tottenham Hotspur

For Vertical Analysis of Income Statement of Tottenham Hotspur during 2016-2018, it

illustrated on Appendix 30. It is illustrated that the component percentage of operating expense
was around 92.59% to 77.93%. For the operating profit, it is illustrated that the operating profit
was gradually increased from 7.41% to 22.07%. From the profit before taxation, it was
approximately about 18.33% and 36.49%. For the net profit, the component percentage was
increased from 15.75% to 29.67%.

3.3.12 Horizontal Analysis of Balance Sheet of Tottenham Hotspur

For Horizontal Analysis of Balance Sheet of Tottenham Hotspur during 2016-2017, it

illustrated on Appendix 31. It is illustrated that the non-current assets was increased by 53.77%
and the current assets increased by 2.96%. From the increasing of non-current and the current
assets, it effects the total assets to be increased by 34.44%. For the current liabilities, it was
increased by 13.51%. For the non-current liabilities, it was increased by 42.54%. Since the
current liabilities and the non-current liabilities was it increased, it effects the total liabilities to
be increased by 31.65% as well. For the total equity, it was increased by 9.33%. According to the
increasing of total equity, it effects the total liabilities and equity to be increased by 25.62%.

For 2017-2018, it illustrated on Appendix 32, that the non-current assets was increased
by 89.62% and the current assets was increased by 54.55%. For the current liabilities, it was
decreased by 18.5% and the non-current liabilities, it was decreased by 43.77%. Since the
decreasing of the current liabilities and the non-current liabilities, it effects the liabilities to be
decreased as well. For the equity, the total equity was increased by 32.20%

3.3.13 Vertical Analysis of Balance Sheet of Tottenham Hotspur

For vertical analysis of Balance Sheet of Tottenham Hotspur during 2016-2018, it

illustrated on Appendix 33. It is illustrated that the component percentage of non-current asset
was gradually increased from 61.96% to 86.94% during 2016-2018. For the current assets, it was
gradually decreased from 38.04% to 13.06%. For the current liabilities, it was gradually
decreased from 47.46% to 29.28%. For the non-current liabilities, it was gradually decreased
from 52.54% to 70.72%.
4.0 Financial Ratios Analysis
4.1 Profitability Ratios

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 For profitability ratios, it will compare the profitability ratios of the 3 companies for 3
years which include Return on Equity (ROE), Return on Assets (ROA), Net Profit Margin and
Quality of Income.

4.1.1 Return on Equity (ROE)

Figure 2.4: The graph of Return on Equity (ROE)

Figure 2.4, illustrates during 3 years of ROE. Arsenal holding Limited earned on the
owners’ investment was gradually increased from 0.84% in 2016, 9.72% in 2017 and 13.47% in
2018. For the Tottenham Hotspur Limited, had earned a lot on the owner's investment compared
with the rest of 2 companies. The ROE of Tottenham Hotspur Limited was gradually increased
from 16.03% in 2016, 15.92% in 2017 and 33.7% in 2018. And for ROE Manchester United plc
was gradually increased from 7.94% in 2016, 8.20% in 2017 and made unearned on the
investment in 2018.

4.1.2 Return on Assets (ROA)

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 Figure 2.5: The graph of Ratio on Assets (ROA)

Figure 2.5 illustrates 3 years of ROA. The graph illustrates that Arsenal Holding Limited
had to utilize most of its assets for 3 years compared with the rest of 2 companies. Arsenal
Holding Limited had to utilize its assets from approximately 0.74% in 2016, 9.53% in 2017 and
15.26% in 2018. For Tottenham Hotspur Limited, they had to utilize the 2 nd most of its assets for
3 years. And for Manchester United plc, they had utilized the least of its assets for 3 years.

4.1.3 Net Profit Margin

20
 Figure 2.6: The graph of Net Profit Margin
Figure 2.6, illustrates 3 years of net profit margin. The graph illustrates that Tottenham
Hotspur Limited got the highest net profit margin for 3 years while Arsenal Holding Limited got
the 2nd highest net profit margin and for Manchester United plc got the least net profit margin.

Arsenal Holding Limited was gradually increased from 0.78% of net profit margin in 2016,
8.33% of the net profit margin in 2017 and 14.02% in 2018. Tottenham Hotspur Limited was
gradually increased from 15.75% in 2016, 11.68% in 2017 and 29.67% in 2018. And for
Manchester United plc was gradually decreased from 7.06% in 2016, 6.74% in 2017 and loss
profit by 6.32% in 2018.

4.1.4 Quality of Income

Figure 2.7 Quality of Income

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 Figure 2.7, it indicates that Arsenal Holding Limited got the highest quality of income for
3 years compared with the rest of 2 companies. From the graph, it illustrates that Arsenal
Holding Limited got 34.12 of the quality of income in 2016 while the rest of 2 companies was
approximately about 1.29 and 5 of the quality of income.

4.2 Asset Turnover Ratios

For the Asset Turnover Ratios, it will compare the asset turnover ratios of 3 companies
for 3 years which includes the total asset turnover ratio, the fixed turnover ratio.

4.2.1 Total Asset Turnover Ratio

Figure 2.8: Total Asset Turnover Ratio

Figure 2.8, illustrates that Arsenal is the company that efficiently used its asset to generate
revenue while Manchester United plc was the second most efficiently used its asset to generate
revenue. Tottenham Hotspur Limited was the least efficiently used its asset to generate revenue.

4.2.2 Fixed Asset Turnover Ratio

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 Figure 2.9: Fixed Asset Turnover Ratio

Figure 2.9, illustrates that Manchester United plc was able to generate the highest revenue of its
fixed asset turnover for 3 years while the performance of 2 companies was averagely the same.

4.3 Liquidity Ratios

4.3.1 Current Ratio

Figure 3.0: Current Ratio

Figure 3.0 illustrates that the current ratio of Arsenal Holding Limited during the last 3
years was greater than 1 which implies that a company’s current assets are sufficient to cover its
current liabilities.

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 For the Tottenham Hotspur Limited, the graph illustrates that the current ratio during the
first 2 years was sufficient to cover its current liabilities. While the year of 2018, the company
were insufficient to cover its current liabilities.

For Manchester United plc, the graph illustrates that the current ratio of the company is
less than 1 and it implies that insufficient to cover its current liabilities.

4.3.2 Cash Ratio

Figure 3.1: Cash Ratio

Figure 3.1 illustrates that the cash ratio of Arsenal Holding Limited had cash on hand
during 3 years was approximately between 0.94 and 0.84 of cash for each £1.00 of current
liabilities.

For Tottenham Hotspur Limited, they had more cash on hand for each £1.00 of current
liabilities during 2016 and 2017 which the cash ratio was between 0.87 and 0.88 of cash for each
£1.00 of current liabilities. While in 2018, the cash ratio was about 0.36.

For Manchester United plc, they had the least cash on hand for £1.00 of current liabilities
as the graph illustrates the cash ratio between 0.57, 0.70 and 0.52 for 3 years.

4.4 Solvency Ratios

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4.4.1 Debt-to-Equity Ratio

Figure 3.2: Debt to Equity Ratio

Figure 3.2 illustrates that for each £1.00 of stockholders’ equity, Arsenal Holding Limited had
debt-to-equity-ratio around 1.67 and 1.45 during the last 3 years. For Tottenham Hotspur Limited
had debt-to-equity-ratio around 2.03 and 2.87 during the last 3 years. Manchester United plc had
debt-to-equity-ratio around 2.168 and 2.87 during the last 3 years.

5.0 Summary

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 In summary, Manchester United plc was able to gain the highest revenue compared with
the rest of 2 companies while Arsenal Holding Limited became the 2 nd and Tottenham Hotspur
Limited respectively. The highest revenue category of Manchester United plc is the commercial
revenue and the factor is that Manchester United plc had more football club stores around the
world than the rest of the 2 companies.

For the profitability ratios, the return on equity (ROE), the return on assets (ROA), the
net profit margin and quality of income had been used to analyze:

For ROE ratio analysis, as it is illustrated in Figure 2.4, even Manchester United was able
to gain the highest revenue compared with the rest of 2 companies but they can earn the least
percentage on the owner's investment. For Tottenham Hotspur, even they can gain the least
revenue compared with the rest of 2 companies, but they can earn the highest percentage on the
owner's investment. For Arsenal, they can gain higher revenue than Tottenham Hotspur but they
can earn the least percentage on the owner's investment.

For ROA ratio analysis, as it is illustrated on Figure 2.5, even Manchester United had the
highest total asset comparing with the rest of 2 companies, but they can generate the least income
return on assets compared with the rest of 2 companies while Arsenal was able to generate the
highest income return on assets. For Tottenham Hotspur, they were able to gain the 2 nd highest
income return on assets.

For the net profit margin, Tottenham Hotspur got the least revenue compared with the
rest of 2 teams but they were able to gain the highest profit margin than the rest of 2 teams while
Arsenal became the 2nd highest profit margin. For Manchester United, they were able to gain the
highest revenue, but they gained the least profit margin than the rest of the 2 teams.

For the quality income, Arsenal had the highest amount of cash compared with the rest of
2 companies while the rest of them have almost the same amount of cash.

For the Asset Turnover Ratios, the total asset turnover ratio and fixed asset ratio will be
used to analyze. For the total Asset Turnover Ratios, Arsenal was able to utilize their asset the
most while the rest of 2 companies was able to utilize its asset about the same level. For the fixed
asset turnover ratio, Manchester United was able to utilize its fixed asset the more than the rest of
the 2 teams.

For Liquidity Ratio, the current ratio and the cash ratio will be used to analyze. For the
current ratio, Arsenal had the most sufficient current asset that able to cover its current liabilities
comparing with the rest of 2 companies. For the cash ratio, Arsenal had sufficient cash on hand
to cover its current liabilities.

For the debt-to-equity ratio, Arsenal had a low debt proportion of its stockholder' equity
while the rest of the 2 companies was about the same.

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Appendix 1: Consolidated Profit and Loss Account of Arsenal Holding Limited during
2016-2017

27
Appendix 2: Consolidated Profit and Loss Account of Arsenal Holding Limited during
2017-2018

28
Appendix 3: Consolidated Balance Sheet of Arsenal Holding Limited during 2016-2017

29
Appendix 4: Consolidated Balance Sheet of Arsenal Holding Limited during 2017-2018

30
Appendix 5: Consolidated Cash Flow Statement of Arsenal Holding Limited during 2016-
2017

31
Appendix 6: Consolidated Cash Flow Statement of Arsenal Holding Limited during 2017-
2018

Appendix 7: Consolidated Income Statement of Manchester United plc during 2016-2018

32
Appendix 8: Consolidated Balance Sheet of Manchester United plc during 2016-2017

Appendix 9: Consolidated Balance Sheet of Manchester United plc during 2017-2018

33
Appendix 10: Consolidated Statement of Cash flows of Manchester United plc during 2016-
2018

34
35
Appendix 11: Consolidated Income Statement of Tottenham Hotspur Limited during 2016-
2018

36
Appendix 12: Consolidated Balance Sheet of Tottenham Hotspur Limited during 2016

37
Appendix 13: Consolidated Balance Sheet of Tottenham Hotspur Limited during 2017-
2018

38
Appendix 14: Consolidated Statement of Cash Flows of Tottenham Hotspur Limited
during 2016

39
Appendix 15: Consolidated Statement of Cash Flows of Tottenham Hotspur Limited
during 2017-2018

Appendix 16: Horizontal Analysis of Income Statement of Arsenal Holding Limited

2016-2017

40
 ARSENAL HOLDINGS LIMITED
Comparative Income Statement 2016 and 2017
Year ended 31 May Increase or Decrease
2017 2016 Amount Percent
(£’000)
Turnover of the Group including its share of joint ventures 427,052 356,548 70,504 19.77%
Share of turnover of joint ventures (3,095) (3,009) (86) 2.86%
Group turnover 423,957 353,539 70,418 19.92%
Operating expenses
- other (294,845) (281,093) (13,752) 4.89%
- amortisation of player registrations (77,126) (59,257) (17,869) 30.16%
Total operating expenses (371,971) (340,350) (31,621) 9.29%
Operating profit/(loss) 51,986 13,189 38,797 294.16%
Share of operating profit of joint venture 598 1,004 (406) -40.44%
Profit on disposal of player registrations 6,760 2,047 4,713 230.24%
Profit before net finance charges 59,344 16,240 43,104 265.42%
Net finance charges (14,737) (13,373) (1,364) 10.20%
Profit before taxation 44,607 2,867 41,740 1455.88%
Tax on profit (9,321) (1,218) (8,103) 665.27%
Profit for the financial period 35,286 1,649 33,637 2039.84%
Earnings per share 567.14 26.50 541
Gains in cash flow hedges - 1,092.00 0 0.00%
Exchange differences 21 9 12 133.33%
Total comprehensive income 35,307 2,750 32,557 1183.89%

Appendix 17: Horizontal Analysis of Income Statement of Arsenal Holding Limited

41
 2017-2018

ARSENAL HOLDINGS LIMITED

Comparative Income Statement 2017 and 2018
Year ended 31 May Increase or Decrease
2018 2017 Amount Percent
(£’000)
Turnover of the Group including its share of joint ventures 406,400 427,052 (20,652) -4.84%
Share of turnover of joint ventures (3,131) (3,095) (36) 1.16%
Group turnover 403,269 423,957 (20,688) -4.88%
Operating expenses
- other (353,478) (294,845) (58,633) 19.89%
- amortisation of player registrations (91,800) (77,126) (14,674) 19.03%
Total operating expenses (445,278) (371,971) (73,307) 19.71%
Operating profit/(loss) (42,009) 51,986 (93,995) -180.81%
Share of operating profit of joint venture 940 598 342 57.19%
Profit on disposal of player registrations 120,047 6,760 113,287 1675.84%
Profit before net finance charges 78,978 59,344 19,634 33.09%
Net finance charges (8,764) (14,737) 5,973 -40.53%
Profit before taxation 70,214 44,607 25,607 57.41%
Tax on profit (13,660) (9,321) (4,339) 46.55%
Profit for the financial period 56,554 35,286 21,268 60.27%
Earnings per share 567.14 (567)
Gains in cash flow hedges - 0 0.00%
Exchange differences (6) 21 (27) -128.57%
Total comprehensive income 56,548 35,307 21,241 60.16%

Appendix 18: Vertical Analysis of Income Statement of Arsenal Holding Limited

2016-2018

42
 ARSENAL HOLDINGS LIMITED
Vertical Analysis of Income Statement (£000)
Year ended 31 May
2018 2017 2016
(£’000)
Turnover of the Group including its share of joint ventures 406,400 100.00% 427,052 100% 356,548 100.00%
Share of turnover of joint ventures (3,131) 0.77% (3,095) 0.72% (3,009) 0.84%
Group turnover 403,269 99.23% 423,957 99.28% 353,539 99.16%
Operating expenses
- other (353,478) 86.98% (294,845) 69.04% (281,093) 78.84%
- amortisation of player registrations (91,800) 22.59% (77,126) 18.06% (59,257) 16.62%
Total operating expenses (445,278) 109.57% (371,971) 87.10% (340,350) 95.46%
Operating profit/(loss) (42,009) 10.34% 51,986 12.17% 13,189 3.70%
Share of operating profit of joint venture 940 0.23% 598 0.14% 1,004 0.28%
Profit on disposal of player registrations 120,047 29.54% 6,760 1.58% 2,047 0.57%
Profit before net finance charges 78,978 19.43% 59,344 13.90% 16,240 4.55%
Net finance charges (8,764) 2.16% (14,737) 3.45% (13,373) 3.75%
Profit before taxation 70,214 17.28% 44,607 10.45% 2,867 0.80%
Tax on profit (13,660) 3.36% (9,321) 2.18% (1,218) 0.34%
Profit for the financial period 56,554 13.92% 35,286 8.26% 1,649 0.46%
Earnings per share 0.00% 567.14 0.13% 26.50 0.01%
Gains in cash flow hedges 0.00% - 1,092.00 0.31%
Exchange differences (6) 0.0015% 21 0.0049% 9 0.00%
Total comprehensive income 56,548 13.91% 35,307 8.27% 2,750 0.77%

Appendix 19: Horizontal Analysis of Balance Sheet of Arsenal Holding Limited 2016-2017

43
 Arsenal Holdings Plc
Horizontal Analysis of Balance Sheet
As of 31 May
£'000
Increase or Decrease
2017 2016 Amount Percent
Amount Amount
Assets
Fixed assets
Goodwill 250 666 -416 -62.46%
Tangible assets 430,973 421,059 9,914 2.35%
Intangible assets 182,029 146,005 36,024 24.67%
Investments 5,444 4,977 467 9.38%
618,696 572,707 45,989 8.03%
Current assets
Stock-development properties 12,300 11,148 1,152 10.33%
Stock-retail merchandise 7,357 4,834 2,523 52.19%
Debtors-due within one year 63,696 57,961 5,735 9.89%
-due after one year 2,175 4,404 -2,229 -50.61%
Cash at bank and in hand 180,116 226,459 -46,343 -20.46%
265,644 304,806 -39,162 -12.85%
Total assets 884,340 877,513 6,827 0.78%

Liabilities
Creditors:amounts falling due within one year 213,807 239,945 -26,138 -10.89%
Creditors:amounts falling due within one year 264,162 265,460 -1,298 -0.49%
Provisions for liabilities 43,003 44,047 -1,044 -2.37%
Total liabilities 520,972 549,452 -28,480 -5.18%

Stockholder's equity
Called up share capital 62 62 - 0.00%
Share premium account 29,997 29,997 - 0.00%
merger reserve 26,699 26,699 - 0.00%
Profit and loss account 306,610 271,303 35,307 13.01%
Total stockholder's equity 363,368 328,061 35,307 10.76%
Total stockholder's equity and liabilities 884340 877513 6,827 0.78%

Appendix 20: Horizontal Analysis of Balance Sheet of Arsenal Holding Limited 2017-2018

44
 Arsenal Holdings Plc
Horizontal Analysis of Balance Sheet
As of 31 May
£'000
Increase or Decrease
2018 2017 Amount Percent
Amount Amount
Assets
Fixed assets
Goodwill 0 250 -250 -100.00%
Tangible assets 424,806 430,973 -6,167 -1.43%
Intangible assets 238,245 182,029 56,216 30.88%
Investments 6,194 5,444 750 13.78%
669,245 618,696 50,549 8.17%
Current assets
Stock-development properties 8,192 12,300 -4,108 -33.40%
Stock-retail merchandise 5,501 7,357 -1,856 -25.23%
Debtors-due within one year 101,220 63,696 37,524 58.91%
-due after one year 13,554 2,175 11,379 523.17%
Cash at bank and in hand 231,344 180,116 51,228 28.44%
359,811 265,644 94,167 35.45%
Total assets 1,029,056 884,340 144,716 16.36%

Liabilities
Creditors:amounts falling due within one year 245,915 213,807 32,108 15.02%
Creditors:amounts falling due within one year 309,991 264,162 45,829 17.35%
Provisions for liabilities 53,234 43,003 10,231 23.79%
Total liabilities 609,140 520,972 88,168 16.92%

Stockholder's equity
Called up share capital 62 62 - 0.00%
Share premium account 29,997 29,997 - 0.00%
merger reserve 26,699 26,699 - 0.00%
Profit and loss account 363,158 306,610 56,548 18.44%
Total stockholder's equity 419,916 363,368 56,548 15.56%
Total stockholder's equity and liabilities 1029056 884340 144,716 16.36%

45
 Appendix 21: Vertical Analysis of Balance Sheet of Arsenal Holding plc 2016-2018

Balance sheet 2016-2018 of Arsenal Holdings plc

Vertical Analysis
Annual Data/Million of￡ except per share data 2018 2017 2016
Amount Percent Amount Percent Amount Percent
Assets
Fixed assets
Goodwill - 250 0.03% 666 0.08%
Tangible assets 424,806 41.28% 430,973 48.73% 421,059 47.98%
Intangible assets 238,245 23.15% 182,029 20.58% 146,005 16.64%
Investments 6,194 0.60% 5,444 0.62% 4,977 0.57%
669,245 65.03% 618,696 69.96% 572,707 65.26%
Current assets
Stock-development properties 8,192 0.80% 12,300 1.39% 11,148 1.27%
Stock-retail merchandise 5,501 0.53% 7,357 0.83% 4,834 0.55%
Debtors-due within one year 101,220 9.84% 63,696 7.20% 57,961 6.61%
-due after one year 13,554 1.32% 2,175 0.25% 4,404 0.50%
Cash at bank and in hand 231,344 22.48% 180,116 20.37% 226,459 25.81%
359,811 34.97% 265,644 30.04% 304,806 34.74%
Total assets 1,029,056 165.03% 884,340 169.96% 877,513 165.26%

Liabilities
Creditors:amounts falling due within one year 245,915 23.90% 213,807 24.18% 239,945 27.34%
Creditors:amounts falling due within one year 309,991 30.12% 264,162 29.87% 265,460 30.25%
Provisions for liabilities 53,234 5.17% 43,003 4.86% 44,047 5.02%
Total liabilities 609,140 59.19% 520,972 58.91% 549,452 62.61%

Stockholder's equity
Called up share capital 62 0.01% 62 0.01% 62 0.01%
Share premium account 29,997 2.92% 29,997 3.39% 29,997 3.42%
merger reserve 26,699 2.59% 26,699 3.02% 26,699 3.04%
Profit and loss account 363,158 35.29% 306,610 34.67% 271,303 30.92%
Total stockholder's equity 419,916 40.81% 363,368 41.09% 328,061 37.39%
Total stockholder's equity and liabilities 1,029,056 159.19% 884,340 158.91% 877,513 162.61%

Appendix 22: Horizontal Analysis of Income Statement of Manchester United plc 2016-
2017

46
 Consolidated Income Statement of Manchester United plc during 2016-2017
Horizontal Analysis
2017 2016 Increase or Decrease
£’000 £’000 Amount Percentage
Revenue 581,204 515,345.00 65,859 12.78%
Operating Expense (511,315) (436,709.00) (74,606) 17.08%
Profit/(loss) on disposal of intangible assets 10,926 9,786.00 1,140 11.65%
Operating Profit 80,815 68,850.00 11,965 17.38%
Finance Costs 25,013 (20,459.00) 45,472 -222.26%
Finance Income 736 442.00 294 66.52%
Net Finance Costs 24,277 (20,017.00) 44,294 -221.28%
Profit on ordinary activities before tax 56,538 48,833.00 7,705 15.78%
Tax expense (17,361) (12,462.00) (4,899) 39.31%
(Loss)/Profit for the year 39,177 36,371.00 2,806 7.71%

Appendix 23: Horizontal Analysis of Income Statement of Manchester United plc 2017-
2018
Consolidated Income Statement of Manchester United plc during 2017-2018
Horizontal Analysis
2018 2017 Increase or Decrease
£’000 £’000 Amount Percentage
Revenue 590,022 581,204 8,818 1.52%
Operating Expense (564,006) (511,315) (52,691) 10.30%
Profit/(loss) on disposal of intangible assets 18,119 10,926 7,193 65.83%
Operating Profit 44,135 80,815 (36,680) -45.39%
Finance Costs (24,233) 25,013 (49,246) -196.88%
Finance Income 6,195 736 5,459 741.71%
Net Finance Costs (18,038) 24,277 (42,315) -174.30%
Profit on ordinary activities before tax 26,097 56,538 (30,441) -53.84%
Tax expense (63,367) (17,361) (46,006) 265.00%
(Loss)/Profit for the year (37,270) 39,177 (76,447) -195.13%

Appendix 24: Vertical Analysis of Income Statement of Manchester United plc 2016-2018

47
 Consolidated Income Statement of Manchester United plc during 2016-2018
Vertical Analysis
2018 2017 2016
£’000
Revenue 590,022 100.00% 581,204 100.00% 515,345 100.00%
Operating Expense (564,006) -95.59% (511,315) -87.98% (436,709) -84.74%
Profit/(loss) on disposal of intangible assets 18,119 3.07% 10,926 1.88% 9,786 1.90%
Operating Profit 44,135 7.48% 80,815 13.90% 68,850 13.36%
Finance Costs (24,233) -4.11% 25,013 4.30% (20,459) -3.97%
Finance Income 6,195 1.05% 736 0.13% 442 0.09%
Net Finance Costs (18,038) -3.06% 24,277 4.18% (20,017) -3.88%
Profit on ordinary activities before tax 26,097 4.42% 56,538 9.73% 48,833 9.48%
Tax expense (63,367) -10.74% (17,361) -2.99% (12,462) -2.42%
(Loss)/Profit for the year (37,270) -6.32% 39,177 6.74% 36,371 7.06%

Appendix 25: Horizontal Analysis of Balance Sheet of Manchester United plc 2016-2017
Manchester United Plc
Horizontal Analysis of Balance Sheet
As of 30 June
£'000
Increase or Decrease
2017 2016 Amount Percent
ASSETS
Non-current assets
Property, plant and equipment 244,738 245,714 -976 -0.40%
Investment property 13,966 13,447 519 3.86%
Intangible assets 717,544 665,634 51,910 7.80%
Derivative financial instruments 1,666 3,760 -2,094 -55.69%
Trade and other receivables 15,399 11,223 4,176 37.21%
Tax receivable - -
Deferred tax asset 142,107 145,460 -3,353 -2.31%
1,135,420 1,085,238 50,182 4.62%
Current assets
Inventories 1,637 926 711 76.78%
Derivative financial instruments 3,218 7,888 -4,670 -59.20%
Trade and other receivables 103,732 128,657 -24,925 -19.37%
Tax receivable - -
Cash and cash equivalents 290,267 229,194 61,073 26.65%
398,854 366,665 32,189 8.78%
Total assets 1,534,274 1,451,903 82,371 5.67%
EQUITY AND LIABILITIES
Equity
Share capital 53 52 1 1.89%
Share premium 68,822 68,822 0 0.00%
Merger reserve 249,030 249,030 0 0.00%
Hedging reserve (31,724) (32,989) 1,265 -3.99%
Retained earnings 191,436 173,367 18,069 9.44%
Total equity 477,617 458,282 19,335 4.05%
Non-current liabilities
Derivative financial instruments 655 10,637 -9,982 -1523.97%
Trade and other payables 83,587 41,450 42,137 50.41%
Borrowings 497,630 484,528 13,102 2.63%
Deferred revenue 39,648 38,899 749 1.89%
Deferred tax liabilities 20,828 14,364 6,464 31.04%
642,348 589,878 52,470 8.17%
Current liabilities
Derivative financial instruments 1,253 2,800 -1,547 -123.46%
Tax liabilities 9,772 6,867 2,905 29.73%
Trade and other payables 190,315 199,668 -9,353 -4.91%
Borrowings 5,724 5,564 160 2.80%
Deferred revenue 207,245 188,844 18,401 8.88%
414,309 403,743 10,566 2.55%
Total equity and liabilities 1,534,274 1,451,903 82,371 5.37%

Appendix 26: Horizontal Analysis of Balance Sheet of Manchester United plc 2017-2018

48
 Manchester United Plc
Horizontal Analysis of Balance Sheet
As of 30 June
£'000
Increase or Decrease
2018 2017 Amount Percent
ASSETS
Non-current assets
Property, plant and equipment 245,401 244,738 663 0.27%
Investment property 13,836 13,966 -130 -0.93%
Intangible assets 799,640 717,544 82,096 11.44%
Derivative financial instruments 4,807 1,666 3,141 188.54%
Trade and other receivables 4,724 15,399 -10,675 -69.32%
Tax receivable 547 - 547 0.00%
Deferred tax asset 63,974 142,107 -78,133 -54.98%
1,132,929 1,135,420 -2,491 -0.22%
Current assets
Inventories 1,416 1,637 -221 -13.50%
Derivative financial instruments 1,159 3,218 -2,059 -63.98%
Trade and other receivables 168,060 103,732 64,328 62.01%
Tax receivable 800 - 800 0.00%
Cash and cash equivalents 242,022 290,267 -48,245 -16.62%
413,457 398,854 14,603 3.66%
Total assets 1,546,386 1,534,274 12,112 0.79%
EQUITY AND LIABILITIES
Equity
Share capital 53 53 0 0.00%
Share premium 68,822 68,822 0 0.00%
Merger reserve 249,030 249,030 0 0.00%
Hedging reserve (27,738) (31,724) 3,986 -14.37%
Retained earnings 135,099 191,436 -56,337 -41.70%
Total equity 425,266 477,617 -52,351 -12.31%
Non-current liabilities
Derivative financial instruments - 655 -655 0.00%
Trade and other payables 104,271 83,587 20,684 19.84%
Borrowings 486,694 497,630 -10,936 -2.25%
Deferred revenue 37,085 39,648 -2,563 -6.91%
Deferred tax liabilities 28,559 20,828 7,731 27.07%
656,609 642,348 14,261 2.17%
Current liabilities
Derivative financial instruments - 1,253 -1,253 0.00%
Tax liabilities 3,874 9,772 -5,898 -152.25%
Trade and other payables 267,996 190,315 77,681 28.99%
Borrowings 9,074 5,724 3,350 36.92%
Deferred revenue 183,567 207,245 -23,678 -12.90%
464,511 414,309 50,202 10.81%
Total equity and liabilities 1,546,386 1,534,274 12,112 0.78%

Appendix 27: Vertical Analysis of Balance Sheet of Manchester United plc 2016-2018

49
 Manchester United Plc
Vertical Analysis of Balance Sheet
As of 30 June
£'000
2018 2017 2016
Amout Percent Amout Percent Amout Percent
ASSETS
Non-current assets
Property, plant and equipment 245,401 15.87% 244,738 15.95% 245,714 16.92%
Investment property 13,836 0.89% 13,966 0.91% 13,447 0.93%
Intangible assets 799,640 51.71% 717,544 46.77% 665,634 45.85%
Derivative financial instruments 4,807 0.31% 1,666 0.11% 3,760 0.26%
Trade and other receivables 4,724 0.31% 15,399 1.00% 11,223 0.77%
Tax receivable 547 0.04% - -
Deferred tax asset 63,974 4.14% 142,107 9.26% 145,460 10.02%
1,132,929 73.26% 1,135,420 74.00% 1,085,238 74.75%
Current assets
Inventories 1,416 0.09% 1,637 0.11% 926 0.06%
Derivative financial instruments 1,159 0.07% 3,218 0.21% 7,888 0.54%
Trade and other receivables 168,060 10.87% 103,732 6.76% 128,657 8.86%
Tax receivable 800 0.05% - -
Cash and cash equivalents 242,022 15.65% 290,267 18.92% 229,194 15.79%
413,457 26.74% 398,854 26.00% 366,665 25.25%
Total assets 1,546,386 100.00% 1,534,274 100.00% 1,451,903 100.00%
EQUITY AND LIABILITIES
Equity
Share capital 53 0.00% 53 0.00% 52 0.00%
Share premium 68,822 4.45% 68,822 4.49% 68,822 4.74%
Merger reserve 249,030 16.10% 249,030 16.23% 249,030 17.15%
Hedging reserve (27,738) -1.79% (31,724) -2.07% (32,989) -2.27%
Retained earnings 135,099 8.74% 191,436 12.48% 173,367 11.94%
Total equity 425,266 27.50% 477,617 31.13% 458,282 31.56%
Non-current liabilities
Derivative financial instruments - 655 0.04% 10,637 0.73%
Trade and other payables 104,271 6.74% 83,587 5.45% 41,450 2.85%
Borrowings 486,694 31.47% 497,630 32.43% 484,528 33.37%
Deferred revenue 37,085 2.40% 39,648 2.58% 38,899 2.68%
Deferred tax liabilities 28,559 1.85% 20,828 1.36% 14,364 0.99%
656,609 42.46% 642,348 41.87% 589,878 40.63%
Current liabilities
Derivative financial instruments - 1,253 0.08% 2,800 0.19%
Tax liabilities 3,874 0.25% 9,772 0.64% 6,867 0.47%
Trade and other payables 267,996 17.33% 190,315 12.40% 199,668 13.75%
Borrowings 9,074 0.59% 5,724 0.37% 5,564 0.38%
Deferred revenue 183,567 11.87% 207,245 13.51% 188,844 13.01%
464,511 30.04% 414,309 27.00% 403,743 27.81%
Total equity and liabilities 1,546,386 100.00% 1,534,274 100.00% 1,451,903 100.00%

Appendix 28: Horizontal Analysis of Income Statement of Tottenham Hotspur 2016-2017

50
 Tottenham Hotspur Limited
Horizontal Analysis Income Statement

2017 2016 Increase or Decrease

£’000 Amount Percent
Revenue 306,321 209,770 96,551 46.03%
Operating expenses (276,704) (194,228) (82,476) 42.46%
Operating profit/(loss) 29,617 15,542 14,075 90.56%
Profit on disposal of intangible
fixed assets 39,964 27,109 12,855 47.42%
Profit from operations 69,581 42,651 26,930 63.14%
Finance income 1,575 2,978 (1,403) -47.11%
Finance costs (13,270) (7,179) (6,091) 84.84%
Profit on ordinary activities before
taxation 57,886 38,450 19,436 50.55%
Tax (16,679) (5,413) (11,266) 208.13%
Profit for the year 41,207 33,037 8,170 24.73%

Appendix 29: Horizontal Analysis of Income Statement of Tottenham Hotspur 2017-2018

Tottenham Hotspur Limited
Horizontal Analysis Income Statement
Year ended 30 June
2018 2017 Increase or Decrease
£’000 Amount Percent
Revenue 380,697 306,321 74,376 24.28%
Operating expenses (296,678) (276,704) (19,974) 7.22%
Operating profit/(loss) 84,019 29,617 54,402 183.69%
Profit on disposal of intangible
fixed assets 73,058 39,964 33,094 82.81%
Profit from operations 157,077 69,581 87,496 125.75%
Finance income 2,461 1,575 886 56.25%
Finance costs (20,629) (13,270) (7,359) 55.46%
Profit on ordinary activities before
139.97%
taxation 138,909 57,886 81,023
Tax (25,956) (16,679) (9,277) 55.62%
Profit for the year 112,953 41,207 71,746 174.11%

Appendix 30: Vertical Analysis of Income Statement of Tottenham Hotspur 2016-2018

51
 Tottenham Hotspur Limited
Vertical Analysis of Income Statement
Year ended 30 June
2018 2017 2016
£’000
Revenue 380,697 100.00% 309,674 101.09% 209,770 100.00%
Operating expenses (296,678) 77.93% (276,704) 90.33% (194,228) 92.59%
Operating profit/(loss) 84,019 22.07% 32,970 10.76% 15,542 7.41%
Profit on disposal of intangible
fixed assets 73,058 19.19% 39,964 13.05% 27,109 12.92%
Profit from operations 157,077 41.26% 72,934 23.81% 42,651 20.33%
Finance income 2,461 0.65% 1,575 0.51% 2,978 1.42%
Finance costs (20,629) 5.42% (22,822) 7.45% (7,179) 3.42%
Profit on ordinary activities before
taxation 138,909 36.49% 51,687 16.87% 38,450 18.33%
Tax (25,956) 6.82% (15,502) 5.06% (5,413) 2.58%
Profit for the year 112,953 29.67% 36,185 11.81% 33,037 15.75%

Appendix 31: Horizontal Analysis of Balance Sheet of Tottenham Hotspur 2016-2017

52
 Tottenham Hotspur Balance Sheet 2016-2017
Horizontal Analysis
Increase or Decrease
6/30/2017 6/30/2016 Amount Percent
Non-current assets
Property plant and equipment 475,608 287,969 187,639 65.16%
Intangible assets 118,894 98,476 20,418 20.73%
Trade receivables due after one year 1,276 990 286 28.89%
595,778 387,435 208,343 53.77%
Current assets
Inventories 4,503 4,179 324 7.75%
Trade and other reiceivables 40,395 61,174 -20,779 -33.97%
Cash and cash equivalents 200,054 172,560 27,494 15.93%
244,952 237,913 7,039 2.96%
Totai assets 840,730 625,348 215,382 34.44%
Current liabilities
Trade and other payables (204,554) (188,909) -15,645 7.65%
Current tax liabilities (7,920) (4,085) -3,835 48.42%
Interest-bearing loans and borrowings (11,044) (1,354) -9,690 87.74%
provisions (6,557) (4,643) -1,914 29.19%
(230,075) (198,991) -31,084 13.51%
Non-current liabilities
Interest-bearing loans and borrowings (169,404) (122,526) -46,878 27.67%
Trade and other payables (187,432) (68,585) -118,847 63.41%
Deferred grant income (88) (1,852) 1,764 -2004.55%
Deferred tax liabilities (26,490) (27,344) 854 -3.22%
(383,414) (220,307) -163,107 42.54%
Total liabilities (613,489) (419,298) -194,191 31.65%
Net assets 227,241 206,050 21,191 9.33%
Equity
Share capital 10,644 10,646 -2 -0.02%
Share premium 34,788 34,788 0 0.00%
Preference shares - 20,000 -20,000 0.00%
Capital redemption reserve 644 642 2 0.31%
Retained earnings 181,165 139,974 41,191 22.74%
Total equity 227,241 206,050 21,191 9.33%
Total liabilities and equity 840,730 625,348 215,382 25.62%

Appendix 32: Horizontal Analysis of Balance Sheet of Tottenham Hotspur 2017-2018

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 Tottenham Hotspur Balance Sheet 2017-2018
Horizontal Analysis
Increase or Decrease
6/30/2018 6/30/2017 Amount Percent
Non-current assets
Property plant and equipment 974,310 475,608 498,702 104.86%
Intangible assets 151,342 118,894 32,448 27.29%
Trade receivables due after one year 4,053 1,276 2,777 217.63%
1,129,705 595,778 533,927 89.62%
Current assets
Inventories 5,358 4,503 855 18.99%
Trade and other reiceivables 63,670 40,395 23,275 57.62%
Cash and cash equivalents 100,636 200,054 -99,418 -49.70%
169,664 244,952 -75,288 -30.74%
Totai assets 1,299,369 840,730 458,639 54.55%
Current liabilities
Trade and other payables (274,106) (204,554) -69,552 25.37%
Current tax liabilities (1,410) (7,920) 6,510 -461.70%
Interest-bearing loans and borrowings (567) (11,044) 10,477 -1847.80%
provisions (6,220) (6,557) 337 -5.42%
(282,303) (230,075) -52,228 18.50%
Non-current liabilities
Interest-bearing loans and borrowings (460,116) (169,404) -290,712 63.18%
Trade and other payables (187,379) (187,432) 53 -0.03%
Deferred grant income (2,199) (88) -2,111 96.00%
Deferred tax liabilities (32,200) (26,490) -5,710 17.73%
(681,894) (383,414) -298,480 43.77%
Total liabilities (964,197) (613,489) -350,708 36.37%
Net assets 335,172 227,241 107,931 32.20%
Equity
Share capital 10,644 10,644 0 0.00%
Share premium 34,788 34,788 0 0.00%
Preference shares - - - -
Capital redemption reserve 644 644 0 0.00%
Retained earnings 289,096 181,165 107,931 37.33%
Total equity 335,172 227,241 107,931 32.20%
Total liabilities and equity 1,299,369 840,730 458,639 35.30%

Appendix 33: Vertical Analysis of Balance Sheet of Tottenham Hotspur 2016-2018

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 Tottenham Hotspur Balance Sheet 2016-2018
Vertical Analysis
6/30/2018 6/30/2017 6/30/2016
Amount Percent Amount Percent Amount Percent
Non-current assets
Property plant and equipment 974,310 74.98% 475,608 56.57% 287,969 46.05%
Intangible assets 151,342 11.65% 118,894 14.14% 98,476 15.75%
Trade receivables due after one year 4,053 0.31% 1,276 0.15% 990 0.16%
1,129,705 86.94% 595,778 70.86% 387,435 61.96%
Current assets
Inventories 5,358 0.41% 4,503 0.54% 4,179 0.67%
Trade and other reiceivables 63,670 4.90% 40,395 4.80% 61,174 9.78%
Cash and cash equivalents 100,636 7.74% 200,054 23.80% 172,560 27.59%
169,664 13.06% 244,952 29.14% 237,913 38.04%
Totai assets 1,299,369 100.00% 840,730 100.00% 625,348 100.00%
Current liabilities
Trade and other payables (274,106) 28.43% (204,554) 33.34% (188,909) 45.05%
Current tax liabilities (1,410) 0.15% (7,920) 1.29% (4,085) 0.97%
Interest-bearing loans and borrowings (567) 0.06% (11,044) 1.80% (1,354) 0.32%
provisions (6,220) 0.65% (6,557) 1.07% (4,643) 1.11%
(282,303) 29.28% (230,075) 37.50% (198,991) 47.46%
Non-current liabilities
Interest-bearing loans and borrowings (460,116) 47.72% (169,404) 27.61% (122,526) 29.22%
Trade and other payables (187,379) 19.43% (187,432) 30.55% (68,585) 16.36%
Deferred grant income (2,199) 0.23% (88) 0.01% (1,852) 0.44%
Deferred tax liabilities (32,200) 3.34% (26,490) 4.32% (27,344) 6.52%
(681,894) 70.72% (383,414) 62.50% (220,307) 52.54%
Total liabilities (964,197) 100.00% (613,489) 100.00% (419,298) 100.00%
Net assets 335,172 227,241 206,050
Equity
Share capital 10,644 3.18% 10,644 4.68% 10,646 5.17%
Share premium 34,788 10.38% 34,788 15.31% 34,788 16.88%
Preference shares — - 20,000 9.71%
Capital redemption reserve 644 0.19% 644 0.28% 642 0.31%
Retained earnings 289,096 86.25% 181,165 79.72% 139,974 67.93%
Total equity 335,172 100.00% 227,241 100.00% 206,050 100.00%
Total liabilities and equity 1,299,369 100.00% 840,730 100.00% 625,348 100.00%

References

55
Matteo Rossi, Alkis Thrassou and Demetris Vrontis (2013) Football performance and strategic
choices in Italy and beyond, International Journal of Organizational Analysis,
https://www.researchgate.net/publication/257650814_Football_performance_and_strategic_choi
ces_in_Italy_and_beyond

Arsenal Football Club, Annual Report (2016-2018). Retrieved from

https://www.arsenal.com/the-club/corporate-info/arsenal-holdings-financial-results

Manchester United Football Club, Annual Report (2016-2018). Retrieved from

https://ir.manutd.com/financial-information/annual-reports/

Tottenham Hotspur Football Club, Annual Report (2016-2018). Retrieved from

https://www.tottenhamhotspur.com/the-club/investor-relations/annual-reports/

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