[GUEST ACCESS MODE: Data is scrambled or limited to provide examples. Make requests using your API key to unlock full data. Check https://lunarcrush.ai/auth for authentication information.]  The Swedish Rumble 🔰 [@SwedishRumble](/creator/twitter/SwedishRumble) on x 34.9K followers Created: 2025-07-18 17:55:33 UTC Not at all! Think of it like this. You got a balance sheet, imagine it as two bars on each side of a line. If the asset side is bigger than debt and equity (equity is what is owed to the owners) — the difference is the profit, or vice versa, a loss. Hence the left side and the right side — will — always be the same size. PSR measures profit (or loss). If the company illustrates in the balance sheet below by a product for £5 and sell it for £10 the result is the following — you first take £5 from Cash and insert £5 in the Other assets bar when the product is bought, meaning that it’s a wash, but in the second step when the product is sold you take £5 from assets and insert £10 into cash. Since the left side and right side must be the same size and this makes the left side grow with £5 — it means that the right side also must grow with £5. Debt won’t grow, equity won’t grow — so it’s the profit square that is getting bigger. Now imagine that we buy Mbuemo for £65m. X. Naturally asset bar on the left side grows with £65m since we got an asset that was worth that much. If nothing else was done, getting Mbuemo, this would mean that we would make a £65m profit since the right side and the profit square would also need to grow with £65m. X. (A) If we pay £65m for him in cash however — you just add an asset worth £65m on the left side and remove cash of £65m from the right side — so it becomes a wash. At this point buying a player has zero impact on PSR. (B) If we agree to pay £65m in cash to Brentford after X years — the left side will have increased with £65m and not decreased with anything. Does this mean that the profit square must increase? No, the right side must increase with £65m, but it won’t be the profit square that increases — it will instead be the “debt” square that increases with £65m. So in summary — regardless if we sign Mbuemo and pays 65m in cash up front for him or if we sign him and agree to pay £65m for him in X years — it neither increases or decreases our PROFIT or LOSS. X. Paying installments also does not impact PSR — since the left side and the right side will decrease to the same extent. If United decreases the cash square with 16.25m while also decreasing the debt square with 16.25m — it’s also a wash, the relation between the left and right side won’t change. So taking up a loan or paying off debt never impacts the profit or loss. X. But wait — when a club buys a player, the club can get problems with PSR — how is this possible if buying a player doesn’t impact our profit or loss day 1? If United instead of buying Mbuemo bought gold bars for £65m — it would never be a cost since gold has eternal value (albeit the price per oz can go up or down). But Mbuemo does not have eternal value. Assets that doesn’t have eternal value must be depreciated, or in case of registration rights for footballers, be “amortized”. This means that you write of the players value on the left side with 1/5 per season. This is a cost — which will result in the profit decreasing.  XXXXXX engagements  **Related Topics** [debt](/topic/debt) [balance sheet](/topic/balance-sheet) [Post Link](https://x.com/SwedishRumble/status/1946267612645609636)
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The Swedish Rumble đź”° @SwedishRumble on x 34.9K followers
Created: 2025-07-18 17:55:33 UTC
Not at all!
Think of it like this. You got a balance sheet, imagine it as two bars on each side of a line. If the asset side is bigger than debt and equity (equity is what is owed to the owners) — the difference is the profit, or vice versa, a loss. Hence the left side and the right side — will — always be the same size.
PSR measures profit (or loss).
If the company illustrates in the balance sheet below by a product for £5 and sell it for £10 the result is the following — you first take £5 from Cash and insert £5 in the Other assets bar when the product is bought, meaning that it’s a wash, but in the second step when the product is sold you take £5 from assets and insert £10 into cash. Since the left side and right side must be the same size and this makes the left side grow with £5 — it means that the right side also must grow with £5. Debt won’t grow, equity won’t grow — so it’s the profit square that is getting bigger.
Now imagine that we buy Mbuemo for ÂŁ65m.
X. Naturally asset bar on the left side grows with ÂŁ65m since we got an asset that was worth that much. If nothing else was done, getting Mbuemo, this would mean that we would make a ÂŁ65m profit since the right side and the profit square would also need to grow with ÂŁ65m.
X. (A) If we pay £65m for him in cash however — you just add an asset worth £65m on the left side and remove cash of £65m from the right side — so it becomes a wash. At this point buying a player has zero impact on PSR.
(B) If we agree to pay £65m in cash to Brentford after X years — the left side will have increased with £65m and not decreased with anything. Does this mean that the profit square must increase? No, the right side must increase with £65m, but it won’t be the profit square that increases — it will instead be the “debt” square that increases with £65m.
So in summary — regardless if we sign Mbuemo and pays 65m in cash up front for him or if we sign him and agree to pay £65m for him in X years — it neither increases or decreases our PROFIT or LOSS.
X. Paying installments also does not impact PSR — since the left side and the right side will decrease to the same extent. If United decreases the cash square with 16.25m while also decreasing the debt square with 16.25m — it’s also a wash, the relation between the left and right side won’t change. So taking up a loan or paying off debt never impacts the profit or loss.
X. But wait — when a club buys a player, the club can get problems with PSR — how is this possible if buying a player doesn’t impact our profit or loss day 1?
If United instead of buying Mbuemo bought gold bars for £65m — it would never be a cost since gold has eternal value (albeit the price per oz can go up or down). But Mbuemo does not have eternal value.
Assets that doesn’t have eternal value must be depreciated, or in case of registration rights for footballers, be “amortized”. This means that you write of the players value on the left side with 1/5 per season. This is a cost — which will result in the profit decreasing.
XXXXXX engagements
Related Topics debt balance sheet