ABSTRACT
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
capital management.
TABLE OF
CONTENTS
Title Page
Approval
Page
Dedication
Acknowledgement
Table
of Content
Abstract
of Preface
Chapter
One:
1.0 Introduction
1.1 Background
of the Study
1.2 Statement of the Problem
1.3 Purpose of the Study
1.4 Significance of the Study
Chapter Two:
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
Chapter Three:
3.1 Design and Methodology
3.2 Sources of Data
3.3 Location of Data
Chapter Four:
4.0 Summary of Findings
Chapter Five:
5.0 Recommendation and Conclusion
Bibliography
CHAPTER ONE
1.0 INTRODUCTION:
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 imperative.
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 assets.
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 short-term asset.
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
organization.
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 within Anammco.
1.2 STATEMENT 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 STUDY:
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.
1.4
SIGNIFICANCE
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 improvement.
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.
1.5
SCOPE
AND LIMITATIONS OF THE STUDY:
This study is to assess the working capital of
manufacturing industries but we limited our study on Anammco Enugu and on the
major components of working capital cash, debtors, stock and creditors.
In carrying out this work, we encountered some set backs
among the principal constraints is the fear of job insecurity by staff of the
industry.
Some staff of the industry interviewed were very
reluctant to give out useful information for fear of losing their job.
Another factor that militated against this work of study
was financial constraints. This is clearly an indication of economic recession
in this study.
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