UNIVERSITY OF REGINA CLUB: FINANCIAL STATEMENT ANALYSIS

Group 1

HERMENIA B. ENSOY
RENRICH C. TAYPA
DIXIE PADILLA

FINANCIAL MANAGEMENT
Master of Management Major in Criminal Justice

Background of the Study

The University Club of Regina is a non-profit organization founded in 1965 in the University

of Regina, located in the region of Saskatchewan, Canada. The club is based on membership and

managed by the University of Regina. The objectives of this club were to promote communication

and create links between those involved in or working in the University; and to offer quality food

services, events and other activities for the members of the club. The club was appreciated by those

working in the University since it was the only facility on campus. However, for those outside the

campus, it was hard to find the location, and the location was ageing with old furniture and

equipment that needed to be replaced. Looking at the figures, the University Club has been in

financial distress for many years because it kept losing money through the last decade. The club used

to be subsidized by the University itself who wrote off its account payable to them, to avoid a bigger

financial disaster. Nevertheless, due to economic circumstances in the region of Saskatchewan, the

University was no longer able to financially help the club. The income statement of the club kept

showing negative results for 7 years even with having positive gross income, increasing from

$500,000$ to $700,000. Despite this positive trend in gross income, it appears that the financial

statements should be analyzed to understand what are the main issues and what type of decision to

make. Facing this situation, the club’s board members decided that a choice must be made. However,

no decision will be made before making a detailed analysis of the financial statements. For the

moment, three courses of action are considered: increasing the membership fee, increasing the

number of members, or closing the club. These options show pros and cons that have to be studied.
With the right ratio analysis and understanding of the numbers, we could put out a better and more

suitable solution for the club.

The university club organized the events and events related stuff. Basically, due to not getting

subsidiaries from the university authority, the club has to go on its own and the club committee has

to consider a few options to decide what to do. Moreover, through the analysis of ratio, if the club

didn't find any possible outcome where the money goes much and need to control it, then the club

has to choose one option among three courses of action which are given by the university club

board.

Statement of the Problem

The specific problem areas may include:

1. Financial Performance: Assessing the club's financial performance by analyzing key financial ratios,

such as profitability, liquidity, solvency, and efficiency ratios. Identifying areas of improvement or

concern based on these ratios.

2. Revenue Generation: Evaluating the club's sources of revenue and determining their effectiveness

in generating income. Identifying any potential opportunities for increasing revenue streams.

3. Expense Management: Analyzing the club's expenses and identifying areas where cost reduction

or optimization can be implemented. Assessing the efficiency of expense allocation and identifying

any potential cost-saving measures.

4. Budgeting and Planning: Assessing the club's budgeting and planning processes to determine their

effectiveness in achieving financial goals. Identifying any gaps or areas for improvement in the

budgeting process.

5. Financial Sustainability: Evaluating the club's long-term financial sustainability by analyzing its

financial statements and identifying any potential risks or challenges that could impact its financial

stability.
The overall objective of the financial statement analysis is to provide insights into the club's financial

health, identify areas for improvement, and make recommendations for enhancing financial

performance and sustainability.

Alternative Courses of Action to Adress the Problem

Here are some alternative courses of action to address the problems identified in the case study of

the University of Regina Club: Financial Statement Analysis:

1. Improve Revenue Generation:

a. Increase Membership: Implement targeted marketing campaigns to attract more members to join

the club, offering special incentives or discounts.

b. Diversify Revenue Streams: Explore new sources of revenue, such as hosting events, renting out

club facilities, or partnering with local businesses for sponsorship opportunities.

c. Fundraising Initiatives: Organize fundraising events or initiatives to generate additional funds, such

as charity drives, auctions, or crowdfunding campaigns.

2. Expense Management:

a. Cost Reduction Strategies: Conduct a thorough review of expenses and identify areas where costs

can be reduced without compromising the quality of services or facilities.

b. Negotiate Supplier Contracts: Negotiate with suppliers to secure better deals or discounts on

essential items or services.

c. Energy Efficiency Measures: Implement energy-saving initiatives to reduce utility costs, such as

installing energy-efficient lighting or optimizing heating and cooling systems.

3. Budgeting and Planning:

a. Improve Budgeting Process: Enhance the accuracy and effectiveness of the budgeting process by

involving key stakeholders, conducting regular reviews, and utilizing budgeting software or tools.

b. Long-Term Financial Planning: Develop a comprehensive long-term financial plan that aligns with

the club's goals and objectives, taking into account potential risks and contingencies.
c. Performance Monitoring: Implement a system to track and monitor financial performance

regularly, comparing actual results against budgeted targets to identify any variances and take

corrective actions.

4. Financial Sustainability:

a. Establish Reserves: Create a reserve fund to ensure financial stability during unforeseen

circumstances or economic downturns.

b. Seek Grants and Sponsorships: Explore opportunities for securing grants or sponsorships from

external organizations or government entities to support the club's financial sustainability.

c. Collaborate with University: Establish partnerships or collaborations with the university or other

student organizations to share resources and reduce costs.

5. Professional Financial Management:

a. Hire Financial Expertise: Consider hiring a professional financial manager or consultant to provide

expert advice and guidance on financial matters.

b. Financial Training and Education: Provide financial training and education to club members and

staff to enhance their understanding of financial management principles and practices.

c. Regular Financial Audits: Conduct regular financial audits to ensure transparency, accuracy, and

compliance with financial regulations and policies.

These alternative courses of action aim to address the identified problems and improve the financial

performance and sustainability of the University of Regina Club.

Recommendation

These are the recommendations to address the identified problems and improve the

financial performance of the club:

1. Conduct a Comprehensive Financial Analysis: Perform a detailed analysis of the club's financial

statements, including profitability, liquidity, solvency, and efficiency ratios, to gain a clear

understanding of its financial health.

2. Develop a Strategic Financial Plan: Create a long-term financial plan that aligns with the club's

goals and objectives. This plan should include revenue targets, expense management strategies, and

contingency plans for potential risks.

3. Enhance Revenue Generation:

a. Membership Growth: Implement targeted marketing campaigns to attract new members and

retain existing ones.

b. Diversify Revenue Streams: Explore additional revenue sources, such as hosting events, renting

out club facilities, or partnering with local businesses for sponsorship opportunities.

c. Fundraising Initiatives: Organize fundraising events or initiatives to generate additional funds.

4. Optimize Expense Management:

a. Cost Reduction Strategies: Conduct a thorough review of expenses and identify areas where costs

can be reduced without compromising the quality of services or facilities.

b. Negotiate Supplier Contracts: Negotiate with suppliers to secure better deals or discounts on

essential items or services.

c. Energy Efficiency Measures: Implement energy-saving initiatives to reduce utility costs.

5. Improve Budgeting and Planning:

a. Strengthen Budgeting Process: Enhance the accuracy and effectiveness of the budgeting process

by involving key stakeholders, conducting regular reviews, and utilizing budgeting software or tools.

b. Long-Term Financial Planning: Develop a comprehensive long-term financial plan that considers

potential risks and contingencies.

c. Performance Monitoring: Implement a system to track and monitor financial performance

regularly, comparing actual results against budgeted targets to identify any variances.

6. Enhance Financial Reporting and Transparency: Improve the clarity and transparency of financial

reporting to provide club members and stakeholders with a clear understanding of the club's

financial position.

7. Establish Financial Controls and Policies: Implement robust financial controls and policies to

ensure proper governance and prevent financial mismanagement or fraud.

8. Seek External Funding Opportunities: Explore opportunities for securing grants or sponsorships

from external organizations or government entities to support the club's financial sustainability.

9. Professional Financial Management:

a. Financial Expertise: Consider hiring a professional financial manager or consultant to provide

expert advice and guidance on financial matters.

b. Financial Training and Education: Provide financial training and education to club members and

staff to enhance their understanding of financial management principles and practices.

10. Regular Financial Audits: Conduct regular financial audits to ensure transparency, accuracy, and

compliance with financial regulations and policies.

These recommendations aim to address the identified problems and improve the financial

performance and sustainability of the University of Regina Club. It is important to tailor these

recommendations to the specific needs and circumstances of the club.

Key Takeaways in the study that can be applied in my career

The case study titled "University of Regina Club: Financial Statement Analysis" provides several key

takeaways that can be applied in my career, regardless of the industry or field. Here are some key

takeaways from the study:

1. Importance of Financial Analysis: The case study highlights the significance of conducting a

thorough financial analysis to understand the financial health of an organization. This takeaway

emphasizes the need to analyze financial statements, assess key ratios, and identify areas for

improvement or concern.

2. Revenue Generation Strategies: The study emphasizes the importance of diversifying revenue

streams and implementing effective strategies to generate income. This takeaway encourages

exploring new sources of revenue, such as partnerships, events, or fundraising initiatives, to enhance

financial performance.

3. Expense Management and Cost Reduction: The case study underscores the significance of

efficient expense management and cost reduction strategies. This takeaway highlights the need to
review expenses, negotiate contracts, and implement energy-saving initiatives to optimize resource

allocation and reduce costs.

4. Budgeting and Planning: The study emphasizes the importance of effective budgeting and long-

term financial planning. This takeaway highlights the need to involve key stakeholders, regularly

review budgets, and monitor financial performance to ensure alignment with organizational goals

and objectives.

5. Financial Reporting and Transparency: The case study underscores the importance of clear and

transparent financial reporting. This takeaway emphasizes the need to enhance financial reporting

practices to provide stakeholders with accurate and understandable financial information.

6. Financial Controls and Policies: The study highlights the significance of implementing robust

financial controls and policies to ensure proper governance and prevent financial mismanagement or

fraud. This takeaway emphasizes the need for organizations to establish and adhere to financial

control mechanisms.

7. Professional Financial Management: The case study suggests the value of seeking professional

financial expertise and training. This takeaway encourages individuals to consider hiring financial

managers or consultants and investing in financial training to enhance their financial management

skills.

8. Regular Financial Audits: The study emphasizes the importance of conducting regular financial

audits to ensure transparency, accuracy, and compliance with financial regulations and policies. This

takeaway highlights the need for organizations to prioritize regular audits to maintain financial

integrity.

By applying these key takeaways in your career, you can enhance your financial management skills,

improve decision-making processes, and contribute to the financial success of your organization.