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PROJECT TOPIC AND MATERIAL ON FINANCIAL MANAGEMENT AND CONTROL, A KEY TO MANAGEMENT EFFICIENCY
The Project File Details
- Name: Financial Management And Control, A Key To Management Efficiency
- Type: PDF and MS Word (DOC)
- Size: [70 KB]
- Length:  Pages
1.1 BACKGROUND OF THE STUDY
It is a fact that we are living in an era of planning and control, whether it is house wife with her household keeping allowances or an industrialist with his responsibilities to the shareholders or even the government has to plan and control its operational activities in order to achieve their goals. Planning and Control are part and parcel of our activities and it is an essential factor in business decision making.
In a competitive world where the key factors are cost, price, turnover and profit, planning and control enables every individual firm and government to have a sound appreciation of the financial implications to his plan and action, financial planning and control can be used by any size or type of organization that want to survive from a complete system covering decentralized department to organization with only a single procedure.
As a tool of management, it can increase the efficiency of the organization as a whole since all the departments are involved.
Moreso, no business prospers unless all its functions, accounting, finance, production, marketing, personnel and so forth are fully staff with competent individual. The efficiency and effectiveness of any organization therefore depends on a number of factors, which may be categorized as clarity of purpose, management planning, control and communication.
There is need to have a clear knowledge of the objectives of the organization otherwise it will not be possible to identify goals, set target for their achievement in form of planning, control and management of its finance (flow of funds)
According to Brigham and Campsey “Financial Management involves planning for acquiring and utilizing funds in a way that maximize the efficiency and value of the firms” Most specifically, finance is the evaluation and acquisition of production assets, procurement of funds and disbursement of funds. It involves four basic, which are the functions, they include:
– Raising of funds to finance projects
– Employment of these funds in valuable projects
– Management of the cash flow arising from these projects
– Returning of funds to their findings or original sources.
Financial manager’s duty is to employ the acquisition, location and management of these resources. Finance therefore spreads into all segments of firm activities thus its function must be understood by all the managers in the firm. Having known the future financial needs of a firms, the question then is how are this finances or funds be raised. These required knowledge of the financial market through the manager from which funds are drawn. It also required knowledge of how to make drawn. It is also required a knowledge of how to make sound investment decisions and to stimulate efficient operations in the organization.
These are alternative involved in financial decisions, the choices include the use of internal or external sources. According to “Harper” before looking outside a firm for funds, the possibility of providing such funds internally should be examined.
This internal sources is mostly used for the firms operations and should not be over looked when planning finance. They are generated from the operations of the business, or retained profits, depreciation provisions, tax provision and reduction in current assists. The external sources on the other hand are made up of two mainly types namely: short term and long-term funds. Short term consists of trader credit, Bank overdraft and promisory notes. Long-term finance or funds refers to funds obtainable from loans with a maturity dated several years in the future or funds the owners of the business. Eg. Debentures. The external source consists of two broad types, equity and debt funds. Equity funds represent the total interest of the owners of the business in the firm of original shares contributions plus subsequent addition either by additional investments or by ploughing back profits/reserves into the business. Debt funds on the other hand are the long-term debt obligations of the business and it usually made up of secured and unsecured debentures and bonds. The main sources of these long-term fudns are the banks and capital markets.
The need for financial planning and control therefore arises because financial resources are limited and costly and even where the resources are available the areas into which they could be applied profitably are diverse. Moreover, planning and control act as a device that enable management to anticipate changes and adopts it. No business can exist well without some form of planning and control. Success in business is proportionate to its planning and control and the skill with which it affairs is being managed by the management.
According to lenke and Edward financial planning and control can therefore be said to be “the name given to a system which is being used to increase the overall management efficient”. It is concerned with planning for the allocation of resource to assist in achieving the objectives of effectiveness and efficiency of both Long and small-scale organizations.
1.2 STATEMENT OF PROBLEMS
Some business organizations are not performing well as a result of poor financial planning and control, some are left uncompleted after committing a very huge sum of money due to inadequate financial management while other will remain in operation successfully. There has been situations where organizations after many years of establishment will collapse, many of them are even well planned; financed and managed while others will stand the test of time. The questions to ask in these situations includes:
1. Whether inefficient Financial management and control is the reasons for corporate failures;
2. Most organizations are well planned and managed, yet facing problems of illiquidity.
3. Some organizations with high capital base and others with, low capital still having the same chances of collapsing as a result inefficient management of working capital.
This research project is an attempt to address these and other problems militating against financial planning and control as key towards achieving management efficiency.
1.3 PURPOSE OF THE STUDY
Planning and Controlling are successful ingredients of management at all levels. Proper exercise of planning and control is often the key managerial efficiency and growth is view of these ; the purpose of this study are:
i. To develop a realistic picture of how financial planning and control can help to make an organization more efficient, effective, successful and ensure growth
ii. To find out the extent to which proper financial planning and control can reduce business failures.
iii. To see how financial planning and control can be adopted and improved to aid efficient and effective operation and suggest practical solution to these problems.
iv. To know the extent to which financial planning and control affected Union Bank (Plc)
1.4 RESEARCH QUESTIONS
For proper guidance and in-depth investigations of the research work, the researcher presented research questions which form major problems of the investigation:
These questions includes:
– Has financial planning and control significant relationship with management efficiency?
– Does proper management of working capital enhance Profitability?
– Is the use of financial management and control techniques essential for achievement of cooperate goals?
– Can it be said that financial management and control are part of internal control procedure?
1.5 STATEMENT OF HYPOTHESES
This research project is based on the f hypothesis:
The null hypothesis (Ho) and the alternative hypothesis (Hi)
1. Ho: Proper financial Planning and control don’t contribute to management efficiency.
H1: proper financial Planning and control do contribute to management efficiency.
2. Ho: Long-term or straight planning can not affect the company objectives.
H1 Long term or straight planning can affect the company’s objectives
3. Ho: Proper management of working capital does not enhance adequate profitability.
Hi: Proper Management of working capital does enhance adequate profitability.
1.6 SIGNIFICANCE OF THE STUDY
This research work will go a long way to helping organizational managers to plan and control source resources of meeting the objective of the organization through greater efficiency, productivity and profitability.
Moreso, how cost of product, price stability increase in turnover and adequate profit remains the overall measure of management efficiency and sign of business success.
Therefore, the important of this study will be in the development of method of using financial planning and control to help management in making relevant policy decisions which if well applied will result to increase efficiency and effectiveness of the firm. This will in turn help to create avenues for the firm to achieve their optimum profitability which will be beneficial to the shareholders, employees, creditors and government. It is also hoped that the result will be of benefit assistance to students of business and vocational studies as well as others wishing to research into relate topics.