TABLE OF CONTENTS
Title
page i
Certification ii
Dedication iii
Acknowledgement iv-v
Table
of contents vi-viii
Proposals ix
CHAPTER ONE
1.0
General
introduction 1
1.1
Background
of the study 1
1.2
Statement
of the problem 2
1.3
Justification
of the study 4
1.4
Objective
of the study 6
1.5
Scope
of the study 8
1.6
Limitation
of the study 8
1.7
Plan
of the study 9
1.8
Definition
of terms 10
CHAPTER TWO
2.0
Literature
review 12
2.1
Working
capital management 12
2.2
Working
capital circle 17
2.3
Components
of working capital management 17
2.4
Cash
management 18
2.4.1 Important of cash/ sources of
funds 19
2.4.2 Cash versus profits 24
2.4.3 Cash planning 24
2.5
Inventory/
Stock management 24
2.6
Determine
the optimum cash balances 27
2.6.2 Optimum cash balance under
certainty 28
2.7
Inventory/
Stock management 35
2.8
Ascertainment
of cost 38
2.9
Reasons
for holding stock 42
CHAPTER THREE
3.0
Research
methodology 43
3.1
Introduction 43
3.2
Research
type 43
3.3
Research
methodology procedures 44
3.3.1 Research design 44
3.3.2 Data specification 44
3.3.3 Population of the study 45
3.3.4 Sample size 46
3.3.5 Generalization of sample size 46
3.3.6 Data collection instruments 47
CHAPTER FOUR
4.0
Finding
and analysis of data 51
4.1
Characteristics
of sample 51
4.2
Analysis
of individual statement 57
CHAPTER FIVE
5.0
Summary,
conclusion and recommendation 67
5.1
Summary 67
5.2
Conclusion 68
5.3
Recommendation 68
5.4
Limitation
of the study 70
5.5
Suggested
area of the study 71
Bibliography 72
ABSTRACT
This work of project based on the working capital
management as a tool for business survival is classify into five different
chapters. Which the chapter one based on the general introduction, background
of the study, statement of the problems justification of the study and
objective of the study, scope of the study and plan of the study.
While chapter two relies on literature review with sub-division
of working capital management working capital circle, component, cash
management important of cash management, cash planning and inventory stock
management.
Chapter three based or research, methodology with
the sub-division of research types, research methodology procedures, research
design, data specification population of the study, sample size, generalization
of sample, unique, method of union bank of Nigeria plc.
Also chapter four based on finding and analysis of
data, characteristics of sample of individual statement.
Lastly chapter five which comprised with the
summary, conclusion and recommendation, limitation of the study, suggested
areas of the study and bibliography.
CHAPTER ONE
1.0 GENERAL INTRODUCTION
1.1 BACKGROUND TO THE STUDY
The prevailing
economics situation is a resulting largely from extensive mismanagement of the
country; resources have made issues of management, one of the paramount
importance in the business world where the financial organization sector has a
pervasive influence: the management of working capital cannot be
overemphasized.
Working
capital management can be said to the life blood for the sustenance of any
organization the study of financial organization is incomplete without an
in-depth, thoroughly and critical analysis of techniques of its working capital
management.
Working
capital is concerned with:
(i)
Financial of working capital component
(ii)
Investment in asset
(iii)
Usage of working capital
It is the art of science of planning organization
directing, controlling and utilization of working capital component as well as
determines the appropriates mix of working capital management. It can also
defined as that aspect of managerial finance or management accounting, which is
concerned with the activities involved in sourcing financing and investing in
the components of working capital.
In
managing working capital, companies separate current execution into their component
units for policy formulation and execution. This is because are of different
nature, which makes it imperative that they will be considered and managed
under a unique appropriate.
1.2 STATEMENT OF THE PROBLEM
The strategic role that
working capital management plays in all organization cannot be over-looked.
This implies
that working capital management is the main pillar of the sustenance of any
financial organization.
The
study or organization financial statement in incomplete without a thoroughly
and perfect understanding of the techniques of its working capital management.
In
examine the management of working capital answers to the following questions.
i.
Does effective stock management increase
organization performance?
ii.
Does cash management enhance business
survived
iii.
Does the debtor’s management increase
business sales and profit?
iv.
Why is the need to invest incurred
assets?
v.
How many inventories are to be carried
out and how de we get funds in pay for them?
vi.
What should be the proportion of long
term and short term funds to finance current assets?
vii.
How the working capital management if
finance and organization?
viii.
How many funds to finance should be
invested in each type of current assets?
1.3 JUSTIFICATION OF THE STUDY
Working capital
management has been identified an essential area in efficient management of the
company. The failure to plan or forecast working capital level and related cost
to the basic reasons for approach. Though with an objective therefore, the
ultimate aims of working capital are:
i.
Maintenance of adequate level of working
capital allow for smooth operation.
ii.
To prevent stock – out
iii.
Maintenance of adequate cash position to
keep the firm liquid and to use cashes in a profitable ways.
iv.
Management of adequate mix of working
capital components the success of working capital management depend upon the
knowledge of cash flow position of the companies, the knowledge of cash flow
position of the companies, the various components of the working capital from
the basic of this project wish to subsequent chapters. The failure of a product
or the entire company.
Therefore the problems of founds
management have always been of great concern to the financial managers of both
private and public co-operation all over the words they is to show the merit of
the working capital as a tool for business survival, to serve as spring banned
for financial organization to produce answers for their current problem of
funds management.
1.4 OBJECTIVE OF THE STUDY
Working capital
represents a large proportion of total investment in the operation in the
operation of any financial organization the management of this aspect of firms
resources is crucial to the success and survival of any company.
A
company can be seen as a series of cash flow. In order words. These streams of
cash flow constitute the components of working capital in view of the above,
the following of the relevant objectives and purpose of the study of working
objectives and purpose of the study of working capital management especially in
financial organization, such as unions bank of Nigeria plc. This is a case
study in this project.
1.
To identify the various method or
techniques for managing the individual component of working capital in
financial organization concern in particularly how union Bank of Nigeria plc.
Manage the component of its working capital.
2.
To determine an optional working level
3.
To examine operational and financial
efficiency of union bank plc in term its ability to earn on its owners.
4.
To identify the component of working
capital the relevance of this study can be seen in terms of the importance of
working capital smooth operation of the firm and it ability to invest in
working capital, in most efficient and effective manner. This at the end of
this project, it should possible to review, assets and critically analysis the
method of managing the working capital of union Bank of Nigeria plc.
Over all additional contribution should have been to
those of the early writers on how best to manage working to ensure optimum level
of investment.
1.5 SCOPE OF THE STUDY
Working
capital management is used for business survival in many fields of business
world. However, this study of working capital management as tool for business
survival is limited to financial organization and the study bases on union Bank
plc. Ilorin
branch the study concentrated on the perception of the management, intermediate
and hour level work. In the effectiveness of this model as tool in business
survival. Where by working capital techniques are used by the management of
considered in making decision in the company.
1.6 LIMITATION OF THE STUDY
The first problem encountered
in collecting our data was inadequate of data on the study, the topic been
relatively new, text are not adequate gotten on the subject. Also the
reluctancy in the attitude of staffs,
Finance
and the constraints were another limitation to data collection problems and the
prospect of small scale business. This can stem from the fact that the
researcher had to go to the office time without number (which were in kwara
state).
This
the limitations centre on transportation cost and time because we are a student
who had to combine project work with our academic.
1.7 PLAN OF THE STUDY
This research work
examine the important of effective working capital cash, cash management
inventory management and debtor management.
Part
three of this project death with the research methodology procedure, research
design, and generalization of sample size that related to the brief historical
background of union Bank plc in Nigeria part four which dealt with data
analysis and interpretation of findings, questionnaire analysis.
1.8 DEFINITION OF TERMS
This is an act of
recording, classifying, summarizing in significant number and in terms of money
transaction and events which are in part at least of financial character and
interpreting the result thereof.
Data:
A set of fact, information collected and ready for use
Cottage
industry: Any group of people or object which are similar in
one way or more and which form the subject of the study in a particular survey.
Sample:
This is defined as of the whole
Credit
policy: This is a clear act guideline on the extension of
credit facised when customers are allowed to make immediate use or to carry
goods away and make.
Cash
Flow:
This is the movement of cash in and out of the business. It is synonymous with
the cash account.
U.B.N:
Union bank of Nigeria
C.B.N:
Central Bank of Nigeria
Business:
can be define as any activities pat in place by a man in ofter for him/her to
earn a living.
Working
capital: Can be defined as the resources available for
conducting day-to-day operations of an organization; normally. It is the excess
of current assets over current liabilities.
Management:
It can be defined as a vital sector of our society. Our economic needs and
wants are met by business and our lives are touched daily in countless. ways by
the operations of business people.
Investment:
Can be define as the commitment of a sum of money usually large into a business
or project with the aim of reaping a stream of
As
set: can be described as which belong to the income
business like building motors machinery etc.
Liabilities:
can be define as the indelitedness of the business to outsider. It is the claim
on the assets of the company.
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