Working capital is the ability of a business to meet its
short-term liabilities as the full due out of its short-term assets.
It is therefore necessary that an industry should always maintain
a well-articulated and consistent management of its working capital.
To facilitate the exposition of this research work for a clear
understanding by our readers, this work had been divided into three chapters.
In course of the study hypothesis were development, it was observed that
automobile industry had adequate working capital to improve efficiency of its
production we observed that automobile industry had adequate and good quality
capital position though it has no credit policy for its customers.
Based on these we concluded that, automobile industry has
effective working capital management. Also we provided some useful suggestions
that can further improve the effectiveness of the industry’s working capital
management. The suggestions include the establishment of credit policy and
embarking on marketing strategy organizing of symposium and seminars on working
1.1 Background of the Study
1.2 Statement of the Problem
1.3 Purpose of the Study
1.4 Significance of the Study
2.1 Review of Related Literature
2.2 Working Capital Management an Overview
2.3 Management of Cash
2.4 Management of Inventories
2.5 Management of Debtors
2.6 Management of Creditors
2.7 Method of Data Collected
3.1 Design and Methodology
4.0 Summary of Findings
5.0 Recommendation and Conclusion
1.1 BACKGROUND OF THE STUDY:
In the early 70’s there was an economic from in Nigeria and
manufacturing industries inspite of widespread misapplica and diversion of
resources still returned handsome profits. Companies expanded and prospered as
a result and effective management became insignificant.
However, in the early 80’s, Nigeria started witnessing an austere
economic condition due to global oil fall in price.
Business environment became so complex that most manufacturing
industries and other sectors of the economy started findings things difficult.
Hence the need for effective management of resources became
The financial resources of the manufacturing industries were one
of the major casualties. The companies liquid asset were inadequate to meet its
day to day requirement of fund and a newly established company require adequate
working capital to be able to start off operation effectively.
Good working capital management is vital to effective financial
obligation of an industry.
It is therefore imperative at this point to illustrate the
definition of working capital. It represent asset used in the day-to-day mining
of an enterprise.
In other words, working capital in the net investment in current
Working capital also indicates in a general sense, the ability of
a business to meet it short-term liabilities as they fall due out of its
However the importance of working capital cannot be over
emphasized. Explicate survey has revealed that there is growing awareness of
importance of capital and its influence on the success of a business
Based on the above general premises of our discussion, working
capital management refers to all aspect of administration of both currents
asset and liabilities working capital requires a careful and mutinous
management as its effectiveness make a gloomy business likely and prosperous.
As a result of the impact of working capital on a business, this
study is to assess the working capital management in manufacturing industries
OF THE PROBLEM:
A critical overview at the trend of business activities over some
years in Nigeria will reveal a consistent increase in cost and lowering profit.
It puzzles one why manufacturing industries in Nigeria have not
been operating efficiently, is it because of unavailability of raw materials?
Or is it lack of managerial expertise. We noted the practise of working capital
management in manufacturing industries yet the problem lingers on.
In the light of all these problem and the fact that there is the
awareness of the need for working capital management and that there is
inadequate working capital in our manufacturing industries.
1.3 PURPOSE OF
The purpose of the study include:
1. To determine the immense importance of working
capital management in manufacturing industries.
2. To critically examine the existence and evaluate
the quality of working capital of automobile industry.
3. To assess the general contribution of working
capital management in cost reduction.
4. To determine the factors hindering the working
capital management in manufacturing industries.
OF THE STUDY:
This study will determine certain problems associated with the
management of working capital in manufacturing industries.
It will highlight useful information on the possible means of
It will be of immense benefit to investors in the industry.
Finally, it will serve as a useful guide for further researcher,
who may wish to go into the subject.
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