THE RELEVANCE OF FINANCIAL MANAGEMENT TO BUSINESS GROWTH


THE RELEVANCE OF FINANCIAL MANAGEMENT TO BUSINESS GROWTH 

ABSTRACT:  

The prerequisite of this extended essay is to know the Relevance of Financial Management to Business Growth in Nigeria.

Financial management is relevant to business growth for a well balanced operation. As businesses in Nigeria are made up of small, medium and large scale enterprises need financial management to operate well. The ultimate aim of financial management is to plan and forecast the profit making and sourcing of fund for business growth. Money is needed in financial management and used in making plans work. It serves as a measuring device that can be used in measuring the plan in terms of naira, and outsiders, such as bankers and other lenders, will do the same.

In starting new business or expansion loan is required. The burden of proof in borrowing money is upon the borrower. You have to show the banker or other lenders how the money borrowed will be used and more important how and when you will repay back the loan.

The extended essay also look at budgeting, as organisation, whether economic, social, or political makes plans for an organisation. Without plan there is no longer an organisation but an uncoordinated assortment of individuals. Some biz-owners/managers carry plans in their head, some make rough estimates on their business and others express their plans in orderly and systematic manner.

An important feature of this extended essay is that the methods taken are in form of data collection through primary and secondary sources. The primary includes questionnaires and oral interview and secondary source include work of authors which were acknowledged.

Finally, the main findings and recommendations are based on the information on the conclusions drawn up to cap the work.

TABLE OF CONTENTS

TITLE PAGE  

APPROVAL PAGE  

CERTIFICATION PAGE  

DEDICATION  

ACKNOWLEDGEMENT  

ABSTRACT  

TABLE OF CONTENT             

CHAPTER ONE

1.1 INTRODUCTION  

1.2 OBJECTIVE OF THE STUDY     

1.3 STATEMENT OF PROBLEM  

1.4 SCOPE AND LIMITATION OF STUDY  

1.5 SIGNIFICANCE OF STUDY

1.6 DEFINITION OF TERMS  

REFERENCES  

CHAPTER TWO

2.1 SOURCES OF FINANCE

2.2 ISSUE OF FINANCING THE FIRM  

2.3 OBJECTIVE AND SIGNIFICANCE OF FINANCING  

2.4 FINANCIAL DECISION MAKING (STAGES & PROCESS)

2.5 CASH CONTROL AND MANAGEMENT OF ORGANISATION IN NIGERIA  

REFERENCES

CHAPTER THREE: RESEARCH METHODOLOGY

3.0 INTRODUCTION

3.1 POPULATION OF THE STUDY

3.2 SAMPLING 

3.3 PROCEDURE FOR COLLECTION, ANALYSIS AND TREATMENT OF DATA

3.4 VALIDITY AND RELIABILITY

CHAPTER FOUR: PRESENTATION AND ANALYSIS OF DATA

4.0 INTRODUCTION

4.1 DATA PRESENTATION 

4.2 DATA ANALYSIS

4.3 SUMMARY OF FINDING

4.4 TEST OF HYPOTHESIS

CHAPTER FIVE

5.1 SUMMARY  

5.2 CONCLUSION  

5.3 RECOMMENDATIONS  

BIBLIOGRAPHY

CHAPTER ONE

1.0 INTRODUCTION

The Financial Function has always been important in business management. Irrespective of differences in structure, ownership and size, the Financial Organisation of the enterprise ought to be capable of ensuring that the various finance functions: - Budgeting and controlling are carried out with the highest degree of efficiency. The profit ability of any business depends largely upon the manner the financial functions are performed and related to other business function.

During the developing stage, financial management involves only the obtaining of funds to finance the business. Overtime, financial function has increased in its scope to include not only the planning of finance, but incorporate the management and control of the available resources within the firm. This also involves the external generation, flow and uses of funds and, the study and evaluation of the capital market.

When talking of the capital market, its operations within the economy cannot be over emphasized. Thus, the demand for and supply of funds for business organizations, become a fundamental management function. Therefore, financial management play an important role both in increasing operational efficiency within the firm and allocating funds to productive or investable sector within and outside the organization.

These functions can only be achieved when there is proper planning and controlling, coordinating and other elements of management combined effectively with the finance function.

1.1 HISTORICAL BACKGROUND

Jomfol Investment Company Nigeria limited was incorporated in 1989. The main business of the company as contained in the memorandum and Articles of association amongst others is to carry on business as farmers, farm developers Livestock and poultry business, fisheries hatchery, producers and process or grains and all manners of crops, manufacturer of Livestock feed and concentrates etc.

The nature of the business activities includes; - manufacture, distribution and sales of poultry feeds and poultry raw materials and other related activities.

The raw materials concerns in the providing these activities includes; maize, soya beans, Soya cake, groundnut beans, and cake, wheat brain, maize brain, sorghum, palm kernel cake, spent grain, Bone meal, Fish meal, cottonseed cake, methionine, lysine, premixes, salt etc.

1.2 STATEMENT OF PROBLEM

Financial management is a feature, which govern the whole process of organizational management. Emphasis is often on planning and control used within an organisation to strengthen area of potential weakness or to capitalize on more effective opportunity for the business. The purpose of undertaking this study is to identify the important role financial management practice can help in managing an organisation to greater height.

All organisations, be it public or private need financing to attain better positions. Hence, the problems of financing all business may include: High Cost of capital. Since the acquisition of capital by small business usually attract high financial interest rates these exposes them to risk and the unsatisfactory profits is another phenomenon which hinder small business from paying back.

Deficiencies in financial management are another problem encountered by small business as managers or owners lack experience in financial management. Only posses pool of expertise in production and sales. Also is the weakness in financial planning as they are always busy directing operations and satisfying customers having no time to keep adequate data to facilitate financial projections.

Other problem includes the inability of small business to save, plough back and obtains loans due to Nigeria factors and no collateral securities.

1.3 OBJECTIVES OF THE STUDY

1. This study attempts to provide an orderly framework for “Financial Appraisal in Small Business Management”.

2. It is aimed at inquiring on how Government has contributed to the progress of business activities.

3. Inquire the possible causes of uncontrolled cash and management of resources, the techniques methods of evaluation and performance of financial policies, method being used in business organizations. 

1.4 SIGNIFICANCE OF STUDY

A very good view at the appraisal of financing to small business organization in previous times, has show that managers within an organisation were more concerned with one matter or the other, and their environmental forces at different periods.

It is significant to know that in management financial, it requires the knowledge of certain functions which include: - Financial and Management Accounting, Law, Economics, Quantitative methods (like Mathematics and Statistics and Taxation). They are not part of Financial Management but support it in that, they provide useful information or give an understanding of the constraints within which the activity of the financial management takes place.

The specific functions of financial management are to ensure that funds are: 

(a) Made available at the right time,

(b) Made available for the right length of time,

(c) Obtained at the lowest cost and

(d) Used in the most effective way.

The consequences of bad financial management can be very serious, if the above functions are not met at times.

In order to ensure that there is good financial management, we must develop sensible objectives, useful concepts, techniques for analyzing situations and principles for the guidance of action. The research will assist the management of the organization and provide a clear defined target output for each department.

Finally, this project will broaden the research knowledge of the topic and will serve as a platform for further development in these area of study.

To this end the research will be significant to management of small business for the following purpose:

⦁ Formulating the policies of the organization.

⦁ Planning the activities of the organization in long term medium and short –term planning

⦁ Controlling the activities of the organization.

⦁ Decision making.

1.5 RESEARCH QUESTION

1. What are the sources through which the organizations gets funds to finance its activities?

2. Is Bank loan on of the sources of funds? if yes, how is the interest rate?

3. What are the problems encountered by your organization in its effort to secure bank loan to finance it activities?

4. What are the problems associated with other sources of funds to the organization?

5. In the managing of it finances, do the organization use budgeting tools?

1.6 STATEMENT OF HYPOTHESIS

Ho: Effective and efficient management of a finance of a business will enhance its, profitability.

Hi: Effective and efficient management of a finance of a business will not enhance its, profitability.

1.7 SCOPE OF THE STUDY

The scope of the study is limited to Jomfol investment company Nigeria Limited. Being a private organization (i.e. small scale business) that is funded by its sales revenue and other sources of fund. Its also on how to bring about business growth in Nigeria via appropriate financial planning and control.

1.8 DEFINITION OF TERMS

Business firm: An Organization engaged in the production of goods or services.

Budget: A statement of plans and expected results expressed in financial and quantitative terms.

Capital: money used to start a business or to produce more wealth.

Credit: The ability or right to buy in return for a later payment 

Control: Correcting diverts to meet with actual plan.

Debt Capital: Borrowing or loan, capital invested in the business that must be repaid.

Depreciation: Allocation of cost of an asset which will be used over the asset service life.

Fixed Capital: Long term capital invested in the business

Forecast: An estimate of the form’s future sales or the probability of occurrence of future business.

Financial Institutions – Are business organisation that lend money.

REFERENCES

Brockington, R.B. (1987) -Financial Management. East Leigh, Hant, D.P Publications Ltd Page 1 –2.

Murphy, B (1978) Management Accounting. Bungay, Suffolk, Richard Clay Chucer press Ltd 2nd edition Page 35.

.

THE RELEVANCE OF FINANCIAL MANAGEMENT TO BUSINESS GROWTH



TYPE IN YOUR TOPIC AND CLICK SEARCH.






RESEARCHWAP.NET
Researchwap.net is an online repository for free project topics and research materials, articles and custom writing of research works. We’re an online resource centre that provides a vast database for students to access numerous research project topics and materials. Researchwap.net guides and assist Postgraduate, Undergraduate and Final Year Students with well researched and quality project topics, topic ideas, research guides and project materials. We’re reliable and trustworthy, and we really understand what is called “time factor”, that is why we’ve simplified the process so that students can get their research projects ready on time. Our platform provides more educational services, such as hiring a writer, research analysis, and software for computer science research and we also seriously adhere to a timely delivery.

TESTIMONIES FROM OUR CLIENTS


Please feel free to carefully review some written and captured responses from our satisfied clients.

  • "Exceptionally outstanding. Highly recommend for all who wish to have effective and excellent project defence. Easily Accessable, Affordable, Effective and effective."

    Debby Henry George, Massachusetts Institute of Technology (MIT), Cambridge, USA.
  • "I saw this website on facebook page and I did not even bother since I was in a hurry to complete my project. But I am totally amazed that when I visited the website and saw the topic I was looking for and I decided to give a try and now I have received it within an hour after ordering the material. Am grateful guys!"

    Hilary Yusuf, United States International University Africa, Nairobi, Kenya.
  • "Researchwap.net is a website I recommend to all student and researchers within and outside the country. The web owners are doing great job and I appreciate them for that. Once again, thank you very much "researchwap.net" and God bless you and your business! ."

    Debby Henry George, Massachusetts Institute of Technology (MIT), Cambridge, USA.
  • "Great User Experience, Nice flows and Superb functionalities.The app is indeed a great tech innovation for greasing the wheels of final year, research and other pedagogical related project works. A trial would definitely convince you."

    Lamilare Valentine, Kwame Nkrumah University, Kumasi, Ghana.
  • "I love what you guys are doing, your material guided me well through my research. Thank you for helping me achieve academic success."

    Sampson, University of Nigeria, Nsukka.
  • "researchwap.com is God-sent! I got good grades in my seminar and project with the help of your service, thank you soooooo much."

    Cynthia, Akwa Ibom State University .
  • "Sorry, it was in my spam folder all along, I should have looked it up properly first. Please keep up the good work, your team is quite commited. Am grateful...I will certainly refer my friends too."

    Elizabeth, Obafemi Awolowo University
  • "Am happy the defense went well, thanks to your articles. I may not be able to express how grateful I am for all your assistance, but on my honour, I owe you guys a good number of referrals. Thank you once again."

    Ali Olanrewaju, Lagos State University.
  • "My Dear Researchwap, initially I never believed one can actually do honest business transactions with Nigerians online until i stumbled into your website. You have broken a new legacy of record as far as am concerned. Keep up the good work!"

    Willie Ekereobong, University of Port Harcourt.
  • "WOW, SO IT'S TRUE??!! I can't believe I got this quality work for just 3k...I thought it was scam ooo. I wouldn't mind if it goes for over 5k, its worth it. Thank you!"

    Theressa, Igbinedion University.
  • "I did not see my project topic on your website so I decided to call your customer care number, the attention I got was epic! I got help from the beginning to the end of my project in just 3 days, they even taught me how to defend my project and I got a 'B' at the end. Thank you so much researchwap.com, infact, I owe my graduating well today to you guys...."

    Joseph, Abia state Polytechnic.
  • "My friend told me about ResearchWap website, I doubted her until I saw her receive her full project in less than 15 miniutes, I tried mine too and got it same, right now, am telling everyone in my school about researchwap.com, no one has to suffer any more writing their project. Thank you for making life easy for me and my fellow students... Keep up the good work"

    Christiana, Landmark University .
  • "I wish I knew you guys when I wrote my first degree project, it took so much time and effort then. Now, with just a click of a button, I got my complete project in less than 15 minutes. You guys are too amazing!."

    Musa, Federal University of Technology Minna
  • "I was scared at first when I saw your website but I decided to risk my last 3k and surprisingly I got my complete project in my email box instantly. This is so nice!!!."

    Ali Obafemi, Ibrahim Badamasi Babangida University, Niger State.
  • To contribute to our success story, send us a feedback or please kindly call 2348037664978.
    Then your comment and contact will be published here also with your consent.

    Thank you for choosing researchwap.com.