By Andrew Neill
The most recent publication of the annual European Football Rich-List has garnered many a headline, including how Real Madrid have done it again and gone and claimed top spot for the tenth year in a row! The list is made up of publicly available information and uses Clubs’ total revenue as the measure of wealth.
However, this isn’t the only way you can measure the relative wealth of a business. Net profit, cash-flow or net assets are also great indicators. There is a well-known saying that “turnover is vanity, profit is sanity but cash is reality” and this has real relevance for many small businesses still struggling to recover from the recession.
So let’s have a look at how viewing business wealth from different angle changes how profitable they really are! We’ve looked at how the Top 10 richest European football clubs compare when using alternative measures of wealth. So let’s see how it changes things….
| Ranking | Rich List | Net Profit | Net assets |
| Real Madrid | 1 | 1 | 1 |
| Manchester United | 2 | 5 | 3 |
| Bayern Munich | 3 | 3 | 4 |
| Barcelona | 4 | 2 | 2 |
| Paris Saint Germain | 5 | 10 | 10 |
| Manchester City | 6 | 9 | 7 |
| Chelsea | 7 | 4 | 6 |
| Arsenal | 8 | 6 | 5 |
| Liverpool | 9 | 7 | 9 |
| Juventus | 10 | 8 | 8 |
So apart from Real Madrid, all the other clubs have different rankings depending on how you assess their wealth. Most striking is the shift in position for Paris Saint Germain, occupying 5th place on the rich list when measured by Revenue, slumps all the way to last place when assessed on profitability and net assets.
The table really underlines the importance of properly understanding what information matters when you’re making informed commercial decisions. Whether that’s assessing a potential business acquisition or just understanding how your business is really performing, having the most appropriate financial information available is what’s important. Here at RBL we are experts in working with SME businesses to ensure their accounting systems generate the information that is right for them, and they have clear growth business plans. So why not get in touch with Sarah-Jane Valentine at Ross Boyd Ltd on 02033 977 755 to book in for a free consultation and make sure your company is at the top of the Premier League.