An Appraisal Of Working Capital As A Determinant Of Profitability Of Organizations In Nigeria (A Case Study Of Allstream Energy Solution Limited Kaduna State)

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An Appraisal Of Working Capital As A Determinant Of Profitability Of Organizations In Nigeria (A Case Study Of Allstream Energy Solution Limited Kaduna State)

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PROJECT TOPIC AND MATERIAL ON AN APPRAISAL OF WORKING CAPITAL AS A DETERMINANT OF PROFITABILITY OF ORGANIZATIONS IN NIGERIA (A CASE STUDY OF ALLSTREAM ENERGY SOLUTION LIMITED KADUNA STATE)

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  • Name: An Appraisal Of Working Capital As A Determinant Of Profitability Of Organizations In Nigeria (A Case Study Of Allstream Energy Solution Limited Kaduna State)
  • Type: PDF and MS Word (DOC)
  • Size: [70 KB]
  • Length: [56] Pages

 

 

CHAPTER ONE

1.0     Introduction

1.1     Background to the Study

According to Retriof (1982), a firm should always maintain a sound working capital position for it to have enough working capital to run its business activities. But excessive as well as inadequate working capital positions are dangerous from firms view point.

Excessive working capital means ideal fund which earns no profit for the firm, while inadequate working capital on the other hand, renders the firm unable to avail, attractive credit opportunities, drastic reduction in the rate of return on total investment. Firm losses its reputation and the capital base could be eroded, thereby, affecting the organization credit worthiness. Working capital cuts across all departments and functions of an organization to the extent that all organizational activities would ground to a halt, if the working capital were not properly managed.

Therefore, the need for a sound and realistic working capital policy for a manufacturing firm like Allstream Energy Solution Ltd Nigeria Plc, becomes imperative, more so, when the structural adjustment programme (SAP) and other stringent economic policies that aimed towards achieving self-reliance has created a more or less suffocating business environment. In this case, survival of the fittest is the watch-word and will not be an exaggeration to say that this survival can only come about through prudent and effective and efficient working capital management.

1.2     Statement of the Problem    

The present world economic hazard coupled with economic policies being operated in this country has led to a situation where many business organizations have had to fold up. Others barely survive by thriving on a very lead financial and material resources. This is due to the fact that procurement of capital to finance their daily operation is increasingly becoming difficult. However, the efficient management and control of working capital can generate a considerable amount of internal financing.

Therefore, the project topic seeks to analyze the Allstream Energy Solution Ltd’s working capital and its segments. This study uses ratio analysis as a measure of efficiency of working capital management. The study will also determine the extent to which the profitability of the company’s dependent on the level of its working capital management using the percentage ratio measurement.

Working capital management as a tool for cost reduction and profit maximization (a case study of Allstream Energy Solution Limited Kaduna state)

1.3     Objectives of the Study   

The aim and objective of any study undertaken is to contribute to the development and growth of its case study. The objectives of this study are as follows:

  1. To examine the contribution made by working capital management on the activities of a manufacturing firm with particular references to Allstream Energy Solution Limited Kaduna.
  2. To recommend where necessary and appropriately alternative working capital management techniques, practical procedures to the officials of Allstream Energy Solution Limited Kaduna.
  3. To test the effectiveness, adequacy and relevance of those controls and to determine the extent these have contributed to the performance of the above mentioned manufacturing firm.
  4. To carry out an indebt analysis of Allstream Energy Solution Limited Kaduna and how these are effectively managed and controlled.

1.4     Research Hypothesis

In order to determine the contribution, efficient working capital management had made towards the performance and growth of the company, it is essential to test the following hypothesis.

Ho:    The profitability of a company is not dependent on the level of the           company’s working capital management.

Hi:     The profitability of a company is depended on the level of the        company’s working capital management.

Ho:    Working capital is not a tool for management control in business   concern.

Hi:     Working capital is a tool for management control in a business       concern.

Ho:    Ineffective working capital management has no effect on        production.

Hi:     Ineffective working capital management has effect on production.

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