ABSTRACT
This project examined
the management of current assets in public Limited Liability Company. It is
obvious that no company can perform well without good current asset management.
This cares for proper accountability and utilization of these assets for
day-to-day transaction of a business concern.
A well co-ordinated
current asset management will go a long way to boost productivity, availability
of funds, profit and encourage expansion. Investigation ha shown that failure
of many business concerns or why some companies perform below expectations lies
mostly in the inability of the management to manage their current asset very
well.
Current
asset is an asset on the balance sheet usually lasting less than one year or
any asset that can be converted into cash within 12 months. Current asset as an
essential tool of any business organization needs efficient and effective
management.
Current asset includes – cash, Government boned, inventors, marketable
securities, account receivables, prepaid etc and also other assets that are
capable of being converted into cash within relatively short period without
intervening with the normal operation of the business.
The
relevant data for this study were obtained through the review of related
literature and use of questionnaire oral interviews as well as direct
observation. This helps us to understand how the various companent of current
asset should be managed.
In the
aspect of cash management, cash should be reduced to a minimum, which implies
that the firms should keep sufficient cash neither more nor less, and this
could only be achieved through cash planning, managing cash inflows and out
flow of the firm, investing the cash, white the excess should be invested in
marketable securities.
In
inventory control, form is faced with problem of meeting two conflicting needs
to maintain a minimum investment in inventories, to maximize profitability and
to minimize a large size of inventory, few efficient and smooth production and
sales operation. And care must be taken to ensure that stock is ordered through
purchase requisition note by the officer responsible for it.
The
presentation of the analysis look the form of chi-square to test the three
hypotheses formulated. From the interpretation of data, the following findings
were made;
(1)
Proper current asset management has increased the growth of a company.
(2)
Effective and efficient current asset management enhances the profit of public
limited liability companies.
(3)
Proper management of current asset leads to high investment and high
production.
Equally, Improper management of current asset
reduced the growth of company. And losses of cash are caused not only by
mismanagement off current asset but also by decrease in the value of cash as a
result of socio-economic situation in the country.
The researcher therefore
tends to carry out research to investigation and know actually how their
current assets are manage in public limited ways for further improvement which
includes;
(1)
Installation of budgeting and budgetary control for efficiency
(2)
Control of overheads so as to minimize payments of cash (cash out flows).
(3)
Matching of receipts and payment to avoid financial insolvency.
The conclusion of the study is that since proper
current asset management has increased the growth of public limited liability
company e.g. The Nigerian breweries plc other companies should apply current
asset management principles to ensure effectiveness, as well both non-profit in
making organization.
TABLE OF
CONTENTS
CHAPTER ONE
1.0
INTRODUCTION
1.1
BACKGROUND INFORMATION OF CASE STUDY
1.2
STATEMENT OF THE
PROBLEM
1.3
OBJECTIVES OF THE
STUDY
1.4
RESEARCH
QUESTION
1.5
STATEMENT OF HYPOTHESIS
1.6
SIGNIFICANCEOF THE
STUDY
1.7
SCOPE, LIMITATIONS AND DELIMITATIONS
OF THE
STUDY
1.8
DEFINITIONS OF
TERMS
CAPTER
TWO
2.0
RVIEW OF RELATED
LITERATURE
2.1
INTRODUCTION
2.2
MANAGEMENT OF
CASH
2.3
THE NEED TO HOLD CASH
BALANCES
2.4
CASH PLANNING FORECASTING AND BUGETING
2.4
INVENTORY MANAGEMENT
2.5
NEED TO HOLD INVENTORY AND OBJECTIVES OF
INVENTORY MANAGEMENT
2.6
DETERMINIATION OF THE SIZE OF INVENTORY
2.7
INVENTORY DECISION MODELS
2.8
OBJECTIVES OF INVENTORY MANAGEMENT
2.9
ECONOMIC ORDER QUANTITY
2.10
MANAGEMENT OF
RECEVIABLES
2.11
GOLES OF CREDIT
MANAGEMENT
2.12
CEREDIT
ANALYSIS
2.13
MANAGEMENT OF MARKABLE
SECURITIES
2.14
CRITERIA FOR SELECTING MARKETABLE SECURITIES.
CHAPTER
THREE
3.0
RESEARCH DESIGN
3.0
INTRUDUCTION
3.1 POPULATION OF STUDY
3.2 SAMPLING TECHNIQUE
3.3 INSTRUMENT OF DATA
COLLECTION
3.4 METHOD OF DATA
COLLECTION
3.5 METHOD OF DATA ANALYSIS
3.6 DECISION RULE
CHAPTER FOUR
PRESENTATION, ANALYSIS
AND INTERPRETATION OF DATA.
4.0
INTRUDECTION
4.1
PRESENTATION OF AND ANALYSIS OF
DATA.
CHAPTER FIVE
5.0
SUMMARY OF FINDINGS
5.1 RECOMMENDATIONS
5.2
COMCLUSION
5.3
LIMITATION OF THE STUDY
REFERENCES
BIBLOGRAPHY
APPENDIX
QUESTIONNAIRE
CHAPTER
ONE
1.0 INTRUDUCTION:
Current assets as one of the management tolls of business organization
are very important in the proper function of business and achievement of
organizational goal. Current assets are those assets that are readily
without loss in value and interference in the normal process of the
business. Management on the other hand involves getting things done
through other people by planning, organizing and cordinating. It is also
a social and technical proves that utilizes resources and changes human
behaviors in the desired direction in order to elicit contribution that will
accomplish the objectives of the organization.
Current asset management includes – managerial
decisions on how the various component of current asset are to be financial as
well as planned policies on the composition level to be maintained and control
to be exercised. Current assets comprises of cash, inventories,
governments bonds, account reachable (debitos) mark able securities, prepaid
expenses and also other assets that are capable of being converted into cash
within a relatively short period without interfering with the normal operations
of the business. For an organizational goal to be achieved these components
of current assets should be efficiently managed.
But sundry debtors and cash
tie-up investment funds can also have other costly disadvantages, for this
reason, organizations should always seek to minimize or keep optimum stock and
cash level of these assets and ideally reduce them to zero. However, reducing
them to zero is rarely practical since to do so will result in cash greater of
other adverse costs increased. The determination of the optional level for such
assets is therefore the result of balancing process between the cost of holding
such assets and role associated with not holding than or of holding only small
amount.
It is obvious that any mismanagement of
these current assets will result to loss of cash, which will eventually have an
advice effects in the entire management of the company.
Therefore, any step which can be taken to
minimize levels of current assets probably yield large savings in cost.
Investigations has shown that many business concerns fail or perform below
expectations as a result of the inability to manage their current assets
adequately. The importance of a well coordinated current assets,
management cannot be over-exaggerated, it goes a long way to boast
productivity, availability of funds, profitability and encourages growth and
expansion of the company. The researcher therefore tend to
investigate and be able to come out with a profitable result on effective and
efficient management of current assets in public limited liability companies
and suggest possible ways for further improvement.
1.2 BACKGROWND INFORMATION OF THE CASE
STUDY
NIGERIAN BAREWERIES PLC
SCOPE OF OPERATION:
Nigerian breweries plc is the pioneer and largest brewing company in Nigeria,
was incorporated in 1946, and recorded a landmark when the first bottle of star
large beer rolled off the bottling lines in its Lagos brewery in June 1949.
This was followed by Aba brewery, which was commissioned in
1957.
Kaduna brewery in 1963
and Ibadan Brewery in 1982. In September 1993, the company acquired its gift
brewery in Enugu.
On April 9,2001, it
recently christened the Ama green field brewery in Enugu, the largest in
Africa. The brewery will be commissioned in October 2003. Thus from its humble
beginning in 1946, the company now has five operational breweries from which
its high quality products are distributed to all part of this great country.
EXPORT
Nigerian Breweries (NB)
plc has an increasing export business that dates back to 1986 currently, they
export to the U.K, U.S.A, Italy, Neither lands, Germany and Kenya.
RESEARCH/DEVELOPMENT
NB
Plc keeps pace with key international developments, thus ensuring that its
systems, processes and operational procedures are always in conformity with
world-class standards. It is inline with this policy that the company
established a research and development center in 1987 to enhance its research
activities on all aspects of brewing operations.
ANCILLARY
OPERATIONS/SERVICES.
As
a major brewing concern, the company encourages the establishment of ancillary
business. Many of these organizations and individuals depend largely on the
company for their means of live hood. These include manufacturers of bottles
croon corks, labels, certons, plastic crates, and such services as hotels clubs
and our key Distributors.
SOCIAL
RESPONSIBILITY:
Nigerian
Breweries Plc is a socially responsible corporate citizen with a very good
record of corporate philanthropy in the areas of education, the environment and
communications among others. The company in 1994 established an Education trust
fund of N100 million to take more action part in the funding of educational and
research facilities I higher Institutions, all in all efforts to provide and
encourage academic excellence in Nigeria. This is in addition to its
secondary and employees. The companies have its authorized share capital of
2.4billon.
1.2 STATEMENT
OF THE PROBLEM
Many companies
including private public and government owned companies have been experiencing
serious mismanagement of resources and loss of cash due to inefficient control
of current assets which result to liquidation.
On the other
hand, another problem facing public limited companies is global economic
recession in Nigeria economy, high rate of inflation and fluctuation I exchange
rate has coursed serious problem in processing stock and other current assets
items that enhance growth of the under utilization of resources and improper
inputs that resulted to the decrease in the total revenue generated by
companies.
Another difficulty
encountered in management of current asset is debt managements of current asset
is debt management. The terms of credit, sales is no more maintained by
distributors and this cases shortage of fund that would have this cause
shortage of fund that would have been available for the normal operation of the
origination. This entire problem hinders the efficient management
of current asset.
At the
conclusion of this study, the researcher will be able to come out with
the possible remedies to these problems associated with current asset
management and suggest ways for improvement.
1.3 OBJECTIVES
OF THE STUDY
The study addressed the
following objectives;
(1)
The purpose of this study is to critically appraise or value the rate at which
the management makes policies for current assets administration in public
limited labiality companies.
(2)
To as certain how funds are really being civilized and adequate management of
current assets with a view to finding solution to mismanagement.
(3)
To identify reason why public limited companies keep proper current asset
management
(4)
To determine the extent to which current assets management tools have enhance
in the proper functioning of business and achievement of organizational goal.
(5)
To assess and evaluate whether current asset management has gone a long way to
boost productivity and encourages growth and expansion of the company.
(6)
To make recommendations and to prevent further lapses and recommend appropriate
measures to be adopted in efficient utilization of resources.
1.4 RESEARCH
QUESTION
The following are the research
question of the study:
(1)
Has the current asset management tool enhances proper functioning of business
and achievement of organizational goal.
(2)
Has it increased the profitability of the public limited companies?
(3)
Has it reduced the problem of debt management?
(4)
Has contributed for proper accountability and utilization of these assets for
day-to-day transaction of a business concern.
1.5 STATEMENT
OF HYPOTHESE
The following hypotheses tested in the study:
Hi:
Alternative Hypothesis
Ho: Null
Hypothesis
Hi: An
appropriate current asset management has increased the profitability and growth
of a company.
H:
High rate of inflation and fluctuations in exchanges rate have a negative
effects on the current asset management.
Ho: high rate of
inflation and fluctuations in exchange rate have no regreative effects on the
current asset management.
Hi: Economic
trend affect current asset management.
Ho: Economic trend
dose not affect current asset management.
1.6 SICINIFINACE
OF THE STUDY
This study will
involve benefits, which will be of interest to some groups, which in the final
analysis will help and solve most of the problems encountered by public limited
liability companies, especially the Nigeria breweries Plc. This study will be
also be of great benefit to business educators, students in business study will
also benefit from this research work.
It will also
assist private and public companies in checking the event of their progress and
lapses, as to adopt the required steps in the control and management of the
current assets. Some of the beneficiaries include:
A.THE MANAGEMENT OF
PUBLIC LIABILITY COMPANIES
The management of public liability
companies like the management of Nigeria breweries has benefited from current
asset management because it has helped them in managerial decision on how the
various component of current assets are to be financed as well as plannined
policies on the composition level to be maintained and control to be exercised.
B. MANAGERS:
The managers in every organization will in no
small measure gain from how they will manage their current asset to ensure
profitability as one of the factors that contribute towards the progress of the
company is the effective and efficient management of their current asset.
C. THE
GOVERNMENT:
The government has gain immensely from current
asset management because those their bonds and securities are well utilized and
secured which ensures stability in an economy.
1.7 SCOPE
The researcher intended to restrict the study on Nigeria breweries Plc Enugu
branch among many public limited liability companies in Nigeria. Because of
some constraints time and monetary constraints.
1.8
DEFINITION OF TERMS
Current Asset: These are those assets that are recash may be held as
buffer to meat unpredictable financial needs. Cash balcne held to cover the
future contigencadly converted
Into cash usually within one year without loss
In value or interference in the normal process
of the business.
Government
bonds: This is a certificate of debt to be paid by the
Government to an individual holder and
it
Usually bearing a fixed rate of interest.
It is also an assurance or a sealed instrument
Under which the government guarantees to
Pay a stated sum of money on or before a
Specified date.
Inventories:
This is detailed offer description of list of list
Of articles given code. It could be also referred
To as that stock of the product that accompany
Is manufacturing for sale and the components
That make up the product inventories could be
Classified into various types which are as
Follows:
(i) RAW MATERIALS
(ii) WORK-IN-PROGRESS (W.I.P) ie partly finished
good and materials held during manufacturing stages.
(iii) FINISHED GOODS: ie completed products that
are ready for sale or distributed, this definition is given by Adibe (1995)
Marketable Security:
These
near money assets in which
Precautionary balance of the firm is
Investigation. They include treasing
Bills, certificate of deposit and bankers
Acceptance and repurchases agreements.
Mark able securities are held as buffer
Against cash storage and are used for
Temporary investments. The defunction
Is by Aguolu (1995) P.2.
It is a certificate of stock that is readily
Salable or buying in marketable values.
The definition is given by Leslie 1979) P3
Department | Banking and Finance |
Project ID Code | BFN0188 |
Chapters | 5 Chapters |
No of Pages | 78 pages |
Methodology | Chi Square |
Reference | YES |
Format | Microsoft Word |
Price | ₦4000, $15 |
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Contact Us On | +2349067372103 |
Contact Us On | +2349094562208 |
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