Tottenham Hotspur Case

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Tottenham Hotspur Case There are many football clubs listed in the London Stock Exchange among them Tottenham Hotspur Football is a one of the leading English professionals’ club and also a member of Premier League. This club has also been listed at London Stock Exchange. Since 2001 Daniel Levy is the chairman of Tottenham Hotspur plc and is thinking of possible options and potential players to take his club to the top position of the British Premier League. In order to succeed in his objective and to establish a sound foundation for the long term financial success, he thinks two things are very important Building of new stadium, Improvement in team quality through prudent player achievements In order to achieve these two main…show more content…
Since the company has higher value of current liabilities which make £64.40M as compared to its current assets, which comprises of £48.07M. The Acid Test ration of 0.73 does highly support this evaluation. The ROCE (profitability) of 5.6% shows that the company pays more for its borrowings, which reduces shareholders’ earnings. The company’s ROCE is based on Sales Revenue to Capital Employed of 0.83 (low margin/high turnover) and the operating profit margin is 6.75%. So this evaluation shows that the company makes 6.75p (before interests and taxes) for every £ of sales. The company’s Net Debt is £16.79M which seems low on average compared to any company at the similar ranking position. Tottenham Hotspur: Team Analysis The performance chart shown in Appendix 2 shows the position of Tottenham Hotspur against other premier league football clubs. The Enterprise Value (EV) has been used here as a reference value to rank different teams. EV is used to compare companies having varying levels of debts. However the enterprise Value (EV) is not an accurate indicator of any company’s financial position because the EV can also be originated by large quote of debt. Thus, more accurate analysis is required to compare the same data during the certain period of time. In order to plot the data, different metrics have been divided in different charts. Considering the large differences in team’s performances, it is good to
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