ABSTRACT
This study was carried
out to find the ectolency of banking activities with the problems of working
capital management in private sector. The aim of this research work is to find
out the relationship between the working capital and management and banking
activities and the contribution of working capital to word banking activities
in economy.
The location and
limitation of the study was able to come up with the faces banking location
improves trendously with the management. It is of great import once to both the
ministries and the research.
Since it helps to find
out whether the economy that is the working capital can go far with the help of
computers. Like wise if helped to broache, the mind of the researcher on the
problems that management specialist in banking can face in the course of
working activities.
The literature review
was compiled from the existing test books on computer and lecture notes, all
from the school library and journal and newspapers.
TABLE OF CONTENTS
CHAPTER ONE
Introduction
Background of the study
Statement of the problem
Objective of the study
Significant of the study
Limitation of the study
CHAPTER TWO
Review of the related
literature
CHAPTER THREE
Research design and
methodology
CHAPTER FOUR
Findings
CHAPTER FIVE
Recommendation and
conclusion
References
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND
OF THE STUDY
The sole objectives of
any business in the private sector are to make profit but the uncertainty
inherent in today’s economic environment threatens the survival of every
business and makes sound liquidity and cash management. The local point for
financial management rather than achievement of maximum profit, for sometime
past the convention revenue accounts and balance sheet have been considered
sufficient for the effective control of a business. The deeper study and
increased analytical approach to business finance has red to an ever growing
realization of the importance of working capital and its influence on the
success or other wise of business operation.
Working capital
management is concerned with the management of the various elements of working
capital, which includes stocks, debtors, cash and creditors other components of
working capital include short term securities, bills payable, prepayments and
other current assets. However, working capital management has been variously
defined but in a nutshell. It refers directly to planning organizing, financing
and controlling of resource available to the business in order to achieve set
of objectives or a definite goal.
L.R Howard put it this
way; working capital may be regarded as the lifeblood of a business.
Its effective provision
can do much to ensure the success of a business, while its inefficient
management can lead not only to the loss of profit but also to the ultimate
down fall of what other wise might be considered as a promissory concern.
It is certain that if
skilled working capital management is not available in amount of finance
provided will transform a financially weak company with mediocre performance
into a strong and dynamic organization enjoying a scintillating regulation.
This research work is a
crucial one in the sense that current asset by their very nature are changing
daily if not hourly and management decision must be made.
1.1 STATEMENT
OF THE PROBLEM
The management of
inter-relationship existing between current assets and liabilities has been the
primary problem of working capital management. Effective working capital
management involves sourcing of fund for the management daily operations of the
companies. Every company needs to maintain a satisfactory level of working
capital or it would go into bankruptcy and finally wound up. However,
profitability, liquidity and other related risks have been a major problem facing
companies in private sector.
This is an important
characteristic of working capital management. Maintaining a large size of
positive side of the economy, but profitability would be adversely affected, as
fund remains ideal.
Conversely, if company’s
holding asset are relatively small, the overall profitability will not doubt
increase, but this will have an adverse effect on the company’s overall
performance, including its liquidity position and thus, making the company more
risky.
Working capital
management should therefore aim at striking a balance between the liquidity and
profitability positions of the company by ensuring that right combinations of
current assets and liabilities are held at cash point in time for a better
company performance.
1.2 OBJECTIVE
OF THE STUDY
As mentioned earlier,
effective working capital management plays effective role on the financial
decision making of any company, which is however the basis for success in any
viable company. As earlier observed, the objective of financial decision
making, is to maximize shareholders wealth.
This wealth or profit usually depends on the rate of turnover.
Primarily, the objective
of this study is to examine how (EBY CO NIG. LTD)
(i)
Identify and discuss the basic determination of working capital because the
individual need of companies as influenced by many factors and fluctuate over
time.
(ii)
Identify and highlight areas of short-term investment of the company, with a
view to making recommendation on how funds could be better utilized to generate
higher earrings and to offer suggestions for improving insufficient cash
balances to meet current obligations.
(iii)
Discuss the place of receivables in the liquidity of a company with a view to
providing solutions through lightening or reduction of solutions collection
policies where receivable appears excessive.
(iv)
Highlight the importance of net working capital as measure of liquidity as this
serves as important consideration for any contemplating granting of credit to
the company.
1.3 SIGNIFICANCE
OF THE STUDY
Virtually, continuous
growth and development of every business or company depends on its source and
roper application of fund generated, which act as its measure of profitability.
This topic is therefore significance as it provides a panacea to the
profitability problem of companies through product cash management.
Inadequacy of cash
receivable, which is vital form of working capital, impairs the growth of any
business. However, the present degree of uncertainty prevailing in the economy
makes it important to maintain better cash or it’s equivalent for contingency
expenditure. This is the crux of the need for effective working capital
management.
Nevertheless,
determination of the current ratio of companies has been a determinant of
credit grant to companies. The working capital ration is particularly
significant in this regard as it is indicative of the degree of shrinkage in
current asset that will not discourage the interest of the current creditors.
Therefore, working capital is significant and crucial in this context.
Department | Banking and Finance |
Project ID Code | BFN0170 |
Chapters | 5 Chapters |
No of Pages | 35 pages |
Methodology | Descriptive |
Reference | YES |
Format | Microsoft Word |
Price | ₦4000, $15 |
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Contact Us On | +2347043069458 |