How To Best Use Financial Ratios in Benchmarking and Decision Making in Clubs: Review of the Decade 2003–2012

ABSTRACT

The past decade saw the United States go through many ups and down, from the country entering into war in Iraq in Spring 2003 to a series of natural disasters from forest fires to hurricanes, to a meltdown in the economy and high unemployment. The club industry might be seen as a recession-proof industry due to its nonprofit nature, but data collected for a 10-year period, from 2003 to 2012, showed that it also fell victim to all these events. Using the basic technique of ratio analysis, club controllers, directors of finance, chief financial officers, and club managers can detect possible issues and set benchmarks and determine strategies for future performance. The results of over 20 financial ratios are included in the analysis.

KEYWORDS:

• Activity ratios
• benchmarking
• clubs
• financial ratios
• liquidity ratios
• operating ratios
• profitability ratios
• solvency ratios