Working Capital Control and Its Impact On The Financial Performance of Companies in Nigeria

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05 \rtlch\fcs1
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\f37\fs22\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\rtlch\fcs1
\af39\afs32 \ltrch\fcs0 \f39\fs70\insrsid9461805\charrsid15290088
WORKING CAPITAL CONTROL AND ITS IMPACT ON THE FINANCIAL PERFORMANCE OF COMPANIES IN
NIGERIA
\par }{\rtlch\fcs1 \af39\afs32 \ltrch\fcs0 \f39\fs32\insrsid9461805\charrsid8747286
(A Case Study of NIIT Warri)
\par }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805

\par }{\rtlch\fcs1 \af39\afs32 \ltrch\fcs0
\f39\fs32\insrsid9461805\charrsid12675759 DEPARTMENT OF ACCOUNTANCY
\par SCHOOL OF FINANCIAL STUDIES}{\rtlch\fcs1 \af39\afs32 \ltrch\fcs0
\f39\fs32\insrsid9461805

\f39\fs32\insrsid9461805\charrsid12675759 OCTOBER, 2009}{\rtlch\fcs1 \af39\afs32
\ltrch\fcs0 \f39\fs32\insrsid9461805
\par }\pard \ltrpar\qc
\li0\ri0\sl480\slmult1\widctlpar\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin
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\par
\par
\par
\par
\par
\par
\par
\par
APPROVAL PAGE
\par }\pard \ltrpar\qj
\f39\fs24\insrsid9461805\charrsid6687846
\par This is to certify that this project work on working capital control and its
impact of the performance of companies in Nigeria:}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid9461805 }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid9461805\charrsid6687846 A case study of NIIT Warri,}
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805 }{\rtlch\fcs1
Delta State, has been read through and approved as meeting the requirement in the
department of Accounting for the award of Higher National Diploma in Accounting
(HND).
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{\rtlch\fcs1
\ab\af39\afs24 \ltrch\fcs0 \b\f39\fs24\insrsid9461805\charrsid6687846
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\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805\charrsid9504957
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{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805\charrsid9504957
(Project Supervisor}{\rtlch\fcs1 \ab\af39\afs24 \ltrch\fcs0
\b\f39\fs24\insrsid9461805 )}{\rtlch\fcs1
\par
\par
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0\dpx-
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{\rtlch\fcs1
\par }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805 \tab \tab
\tab \tab \tab \tab \tab \tab \tab Date}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\par }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805 (}
Center Coordinator}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805 )}
{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid9461805\charrsid9504957
0\lin0\itap0\pararsid9461805 {\rtlch\fcs1 \ab\af39\afs28 \ltrch\fcs0
\b\f39\fs28\insrsid9461805\charrsid3614940 CERTIFICATION
\par This is to certify that this project work was carried out during the 2008/2009
Academic session by Ibrethi Ufouma Endurance in the department of Accountancy,}
\af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid9461805\charrsid6687846 Akwa Ibom Stat}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805 e Polytechnic, Ikot Osurua Ikot}
\endash
Ekpene, Akwa Ibom State, Nigeria.
The work embodies in this project has not been submitted in part or in full for any
other Diploma or for any other certificate of this or any other polytechnic.
ht\rin0\lin0\itap0\pararsid9461805 {\rtlch\fcs1 \af37 \ltrch\fcs0
\lang1024\langfe1024\noproof\insrsid15290088
0\dpx12381\dpy859\dpxsize2640\dpysize0\dplinew15\dplinecor0\dplinecog0\dplinecob0}}
}
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{\sp{\sn fFlipH}{\sv 0}}{\sp{\sn fFlipV}{\sv 0}}
0\dpx-99\dpy739\dpxsize3600\dpysize0\dplinew15\dplinecor0\dplinecog0\dplinecob0}}}}
{\rtlch\fcs1
\f39\fs24\insrsid9461805\charrsid9504957 Mr. Bassey .N. Emmanuel}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805 \tab \tab \tab \tab \tab \tab
Date}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805\charrsid9504957
\par }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805 }
(Project Supervisor}{\rtlch\fcs1 \ab\af39\afs24 \ltrch\fcs0
\b\f39\fs24\insrsid9461805 )}{\rtlch\fcs1
\par
\par
219\shptop395\shpright3381\shpbottom395\shpfhdr0\shpbxcolumn\shpbxignore\shpbypara\
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20}}{\sp{\sn fFlipH}{\sv 0}}{\sp{\sn fFlipV}{\sv 0}}
0\dpx-
219\dpy395\dpxsize3600\dpysize0\dplinew15\dplinecor0\dplinecog0\dplinecob0}}}}
{\rtlch\fcs1
\par }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805 }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805\charrsid9504957 Mrs. Ogbunaka .F.}
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805 \tab \tab \tab
\tab \tab \tab
\tab Date}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\par }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805 (}
Center Coordinator}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805 )}
\b\f39\fs28\insrsid9461805\charrsid3614940 DEDICATION
This project piece of work is dedicated to almighty and everlasting God for his
infinite mercies and wisdom, and for his divine grace and direction through out my
years of studies.
Secondly to my }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805 Late
father Mr. Amusa Ibrethi and to my }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid9461805\charrsid6687846 parents}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid9461805 / Guardian}{\rtlch\fcs1 \af39\afs24
for encouragement and for the provision of material and financial resources which
facilitated the completion of this project work, and to my lovely brother and
sisters for their understanding throughout the course of my study. }{\rtlch\fcs1
\af39\afs24
\par Finally to my beloved friends and family and to the entire staff of NIIT
Warri.
\par
\par
\b\f39\fs28\insrsid9461805\charrsid3614940 ACKNOWLEDGEMENT
\f39\fs24\insrsid9461805\charrsid6687846 I wish to exp}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid9461805 ress}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid9461805\charrsid6687846 my unfathomable gratitude to my project
supervision Mr.}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805 }
{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805\charrsid6687846 Bassey .N.
Emmanuel who patiently read-through this project work and made some corrections
where necessary which brought this project work near perfection.
My special gratitude also goes to }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid9461805 the center coordinator, Mrs. Ogbunaka .F, the registrar
Mrs. Stella Oyabugbe}{
\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805\charrsid6687846 and
all the lecturers in }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805
Warri Satellite campus, Akwa Ibom State Polytechnic, Ikot Osurua, Ikot-
Ekpene (Warri Center)}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid9461805\charrsid6687846 for the Educational assistance and
advice.
My indebtedness goes to my parent / guardian Mr. James Eboh and Mrs. Eunice Eboh,
also to my brother Mr. Antho}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
ny Ibrethi and my sisters Miss H}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid9461805\charrsid6687846 ope Ogodo, Miss Charity Ibrethi, Miss Rita
Eboh.
My profound gratitude also goes to my friends, Adize Musa Henry Ayegbeni, Faith
Aighegbese, Orioko Benedicta,}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
Mr. Kalu John (Executive Director, NIIT Onitsha), }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid9461805\charrsid6687846 for their love and Educational
advice.
\par Finally,}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805 I }
sincerely thank the entire staff of NIIT Warri and my well wishers, Mr. Robinson }
{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805 Ibrethi, Mrs. Helen Ohare, }
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805\charrsid6687846 Mr.}
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805
Ogedegbe Emmanuel (Center Head, NIIT Warri.),}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid9461805\charrsid6687846 }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid9461805 and Mr. Donald Oiga (Accountant, NIIT Benin.), }
{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805\charrsid6687846 for their advice
and support both spiritually, financially,}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid9461805 }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid9461805\charrsid6687846 and other wise. }{\rtlch\fcs1
ht\rin0\lin0\itap0\pararsid9461805 {\rtlch\fcs1 \ab\af39\afs24 \ltrch\fcs0
05 {\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805\charrsid10636471
\par
\par
\par
\par
\par
\par
\par
\par
\par
\par
ABSTRACT
This research work was basically base on working capital control an}{
\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805 d}{\rtlch\fcs1
its impact on the financial performance of companies in Nigeria. A case study,
performances of a company was generally measured using profitability as the
yardstick. Therefore firms/companies that recorded continuous incre}{\rtlch\fcs1
\af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid9461805 as}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid9461805\charrsid10636471 e in profit would be perceived a
performing better than those companies whose profit were either stagnant or on the
decrease.
\par }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805 The aim of the
project is to a}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid9461805\charrsid10636471 mongst other things examines working
capital control
and its impact on the financial performance of companies by determining the level
of working capital that is optional, know the combination of working capital th}
at will maximize the value of th}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid9461805\charrsid10636471 e company and also know how the required
working capital should be finance.
\f39\fs24\insrsid9461805\charrsid10636471 Consequently, the researcher base on the
findings of the work gave recomme}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid9461805 n}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid9461805\charrsid10636471 dations.}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805 In the opinion of th}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805\charrsid10636471 e researcher
these recomme}{
\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805 n}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805\charrsid10636471 dations if
adhered to would lead to improvement in the performances of company.
TABLE OF CONTENT
\par }\pard \ltrpar\ql
05 {\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805 PRELIMINARY PAGE
05 {\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805 Cover Page\tab
\tab \tab \tab \tab \tab \tab \tab \tab \tab i
\par Title page\tab \tab \tab \tab \tab \tab \tab \tab \tab \tab \tab ii}
\par }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805 Approval}
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805\charrsid10636471 }
\tab \tab \tab \tab \tab
\tab \tab \tab }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid9461805\charrsid10636471 ii}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid9461805 i}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
Certification\tab \tab \tab \tab \tab \tab \tab \tab \tab \tab iv}{\rtlch\fcs1
\par Dedication}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805
\tab \tab \tab \tab \tab \tab \tab \tab \tab \tab \tab v}{\rtlch\fcs1
\par Acknowledgement }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805
\tab \tab \tab \tab \tab \tab \tab \tab \tab }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid9461805\charrsid10636471 v}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid9461805 -viii}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\par Abstract }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805
\tab \tab \tab \tab \tab \tab \tab \tab \tab \tab \tab }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid9461805\charrsid10636471 v}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid9461805 iii}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\par Table of content }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid9461805 \tab \tab \tab \tab \tab \tab \tab \tab \tab ix-xii}
CHAPTER ONE
\par }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805 INTRODUCTION}
\tab \tab \tab \tab
\tab \tab }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\par 1.1\tab Background of study }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid9461805 \tab \tab \tab \tab \tab \tab \tab \tab }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805\charrsid10636471 1
\par 1.2\tab Statement of resea}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid9461805 rch problem\tab \tab \tab \tab \tab \tab }{\rtlch\fcs1
\par 1.3\tab Objectives of the Study }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid9461805 \tab \tab \tab \tab \tab \tab \tab }{\rtlch\fcs1
\par 1.4\tab Significance of study }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid9461805 \tab \tab \tab \tab \tab \tab \tab \tab 5}{\rtlch\fcs1
\par 1.5\tab Scope of study }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid9461805 \tab \tab \tab \tab \tab \tab \tab \tab \tab 5}
\par 1.6\tab Limitation of the study }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\par 1.7\tab Definitions of terms }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid9461805 \tab \tab \tab \tab \tab \tab \tab \tab 7}{\rtlch\fcs1
\par \tab \tab References}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs28\insrsid9461805\charrsid12724242 CHAPTER TWO
\par }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805 LITERATURE
REVIEW}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\par 2.1\tab Working capital }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid9461805 \tab \tab \tab \tab \tab \tab \tab \tab \tab }{\rtlch\fcs1
\par 2.2\tab Types of working capital }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\par 2.2.1\tab Working capital policy }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\par 2.2.2\tab Working capital cycle }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805\charrsid10636471 1}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid9461805 2}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\par 2.2.3\tab Components of working capital }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid9461805 \tab \tab \tab \tab \tab \tab 13}
\par 2.3\tab Control of the components of working capital }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid9461805 \tab \tab \tab }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid9461805\charrsid10636471 13
\par 2.4\tab Cash control management }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\par 2.4.1\tab Rational for holding cash }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\par 2.4.2\tab Cash management techniques }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid9461805 \tab \tab \tab \tab \tab \tab }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid9461805\charrsid10636471 1}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\par 2.5\tab Inventory (stock) management }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\ltrch\fcs0
\par 2.5.1\tab Inventory cost }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\par 2.5.2\tab Inventory control system }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\par 2.6\tab Debtors (account receivables) control }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid9461805 \tab \tab \tab \tab }{\rtlch\fcs1
\par 2.6.1\tab The accumulation of receivables }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid9461805 \tab \tab \tab \tab \tab }{\rtlch\fcs1
\par 2.6.2\tab monitoring the receivable position }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid9461805 \tab \tab \tab \tab \tab }{\rtlch\fcs1
\par 2.6.3\tab Credit policy }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\par 2.6.4\tab Default policy }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\par 2.7\tab Working capital financing }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\par 2.7.1\tab Alternative current assets financing policy }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805 \tab \tab \tab \tab }
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805\charrsid10636471 3}
\ltrch\fcs0 \f39\fs24\insrsid9461805 5}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\par 2.7.2\tab Advantage and disadvantage of short-term finance }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805 \tab \tab }{\rtlch\fcs1
\par 2.7.3\tab Sources of short - term financing }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid9461805 \tab \tab \tab \tab \tab 37}{\rtlch\fcs1
\par \tab \tab \tab References }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\par
CHAPTER THREE
\f39\fs24\insrsid9461805\charrsid10636471 RESEARCH METHODOLOGY
\par 3.1\tab Research design }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\par 3.2\tab The type and sources of data }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\ltrch\fcs0
\par 3.3\tab Instrument of data collection }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\ltrch\fcs0
\par 3.4\tab Actual field work }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\par 3.5\tab method of data presentation }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\ltrch\fcs0
\par 3.6\tab Method of data analysis }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\par
CHAPTER FOUR
\f39\fs24\insrsid9461805\charrsid10636471 DATA PRESENTATION AND ANALYSIS
\par 4.1\tab Data presentation }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\par 4.2\tab Data analysis }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\par
CHAPTER FIVE
\f39\fs24\insrsid9461805\charrsid10636471 SUMMARY}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid9461805 ,}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
CONCLUSION AND RECOMMENDATION
\par 5.1\tab Synopsis }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid9461805 \tab \tab \tab \tab \tab \tab \tab \tab \tab \tab }
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805\charrsid10636471 6}
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\par 5.2\tab Summary of findings }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805\charrsid10636471 64}
\par 5.3\tab Conclusion\tab \tab \tab \tab \tab \tab \tab \tab \tab 65}{\rtlch\fcs1
\par 5.}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805 4}
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805\charrsid10636471 \tab
Recommendation }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805
\tab \tab \tab \tab \tab
\tab \tab \tab 67
\par 5.5\tab Suggestion for further studies\tab \tab \tab \tab \tab \tab 68}
\fi720\li0\ri0\sl480\slmult1\nowidctlpar\wrapdefault\faauto\rin0\lin0\itap0\pararsi
d9461805 {\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid9461805\charrsid10636471 Bibliography}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid9461805 \tab \tab \tab \tab \tab \tab \tab \tab \tab 69
\par Appendix I\tab \tab \tab \tab \tab \tab \tab \tab \tab \tab 72
\par Appendix II\tab \tab \tab \tab \tab \tab \tab \tab \tab 73
05 {\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9461805
\par }\pard \ltrpar\ql
ht\rin0\lin0\itap0\pararsid9461805 {\rtlch\fcs1 \af0 \ltrch\fcs0
\insrsid9461805\charrsid3961598
\f39\fs28\insrsid12588051\charrsid15993430 CHAPTER ONE
INTRODUCTION}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12588051\charrsid10636471 1.1\tab BACKGROUND OF STUDY
391271 {\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12588051\charrsid10636471 The performance of companies is }
\ltrch\fcs0 \f39\fs24\insrsid8012210\charrsid10636471 usually}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12588051\charrsid10636471 viewed by the
extent to which a company or organization objectives are achieved. \tab
The major objective of the most organization is profit making and such
organizations tend to indulge in policies that lead}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid15227167 to the a}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid10904622 chievement}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12588051\charrsid10636471 of the profit objective.}
\f39\fs24\insrsid12588051\charrsid10636471 One major policy indulged in by
management of a company or organization to see to its}{\rtlch\fcs1 \af39\afs24
\f39\fs24\insrsid15149557\charrsid10636471 Objective}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid12588051\charrsid10636471 is working capital
control.}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12588051
\par The daily }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid3627378
operations of a firm\rquote s activities are}{\rtlch\fcs1 \af39\afs24
sustained by funds available for such operations. These funds are referred to as
working capital.}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12588051\charrsid10636471 (Eugene Brigham) in the book fundamental
of }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8012210\charrsid10636471 financial}
management traced the origin of worki}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid16736054 ng capital to the old Yankee }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8012210\charrsid10636471 Peddlers}{\rtlch\fcs1
who would load up his wagon with goods and then go off to his route to peddle his
waves.}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8012210 }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12588051\charrsid10636471 The }
{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8012210\charrsid10636471 merchandise}
was \tab }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8012210 s}
{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8012210\charrsid10636471 een}
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12588051\charrsid10636471 as
working capital because it was what }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
he}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12588051\charrsid10636471
actually sold or turnover to produce his profits. The wagon and horse }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8012210\charrsid10636471 w}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid16736054 ere his fixed a}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8012210\charrsid10636471 ssets}
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid16736054 . }{\rtlch\fcs1
\f39\fs24\insrsid12588051\charrsid10636471 He actually owned the horse and the
wagon so they were finance with equity capital, but h}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid16736054 e borrowed the funds to buy the }{\rtlch\fcs1
\af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8012210\charrsid10636471 Merchandize}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12588051\charrsid10636471 .
\f39\fs24\insrsid8012210\charrsid10636471 Working}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid12588051\charrsid10636471 capital }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8012210\charrsid10636471 control therefore}
refers to the }{
\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid16736054 a}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8012210\charrsid10636471 d}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid16736054 m}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid8012210\charrsid10636471 i}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid16736054 nistra}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8012210\charrsid10636471 tion}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12588051\charrsid10636471 within policy guideline of }

{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8012210\charrsid10636471 a
current}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
assets and current }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8012210\charrsid10636471 liabilities.}{\rtlch\fcs1 \af39\afs24
\f39\fs24\insrsid12588051\charrsid10636471 The more of a business finance invested
in working }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8012210\charrsid10636471 capital, the}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid12588051\charrsid10636471 less is available for investment in
long term }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8012210\charrsid10636471 assets.}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid16736054 It }{
\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12588051\charrsid10636471 is
at most times believed that the profits to be earned from investment in}
long term assets are greater than the profit to be earned}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8290003 in}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12588051\charrsid10636471 current }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid8012210\charrsid10636471 assets.}{\rtlch\fcs1 \af39\afs24
\f39\fs24\insrsid12588051\charrsid10636471 At such time therefo}{\rtlch\fcs1
\f39\fs24\insrsid8410264 re, a business would want to }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid12588051\charrsid10636471 minimize its resources on
investment }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid15073805 with
a longer life than current }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12588051\charrsid10636471 assets being financed by current
liabilities.
\f39\fs24\insrsid12588051\charrsid10636471 However,}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid12588051\charrsid10636471 in some economic condition}
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid4986468 s}{\rtlch\fcs1
\f39\fs24\insrsid12588051\charrsid10636471 the wi}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid4986468 s}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12588051\charrsid10636471 d}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid4986468 om of the day suggest that it'}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid12588051\charrsid10636471 s better for}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid4986468 a business or company }
{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12588051\charrsid10636471 to keep its
resources liquid by investing in current assets including placing any }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid5313717\charrsid10636471 surplus}
{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12588051\charrsid10636471 cash in short
term financial investment .}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
Being liquid also enables a firm to take advantage of any opportunity that may
arise.
\f39\fs24\insrsid12588051\charrsid10636471 In the firms to be analyzed, some do
not have laid-down working capital control policies. Some have in certain areas
but, it is only banks}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid5313717
}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12588051\charrsid10636471
that have a fairly established rule regarding the maintenance of a fixed proportion
of their deposit in form of cash. Attempts}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12588051\charrsid10636471 will therefore be made in demystifying
working capital }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid14758744
control }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
to be establishment of managers of these firms.
\f39\fs24\insrsid12588051\charrsid10636471 \tab
\par 1.2\tab STATEMENT OF RESEARCH PROBLEMS
\par }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid3483815 \tab }
This study will be guided by a number of question viz:
\par }\pard \ltrpar\qj \fi-
720\li720\ri0\sl480\slmult1\nowidctlpar\wrapdefault\faauto\rin0\lin720\itap0\parars
id3483815 {\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12588051\charrsid10636471 1.\tab Dose carrying of }{\rtlch\fcs1
\af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid3483815\charrsid10636471 appropriate}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12588051\charrsid10636471 working capital
affect the profit }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid3483815\charrsid10636471 level}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid12588051\charrsid10636471 ?
\par 2.\tab Should there be a limit of the working capital carried at a point in
time?
\f39\fs24\insrsid12588051\charrsid10636471 3.\tab
What is the level of current assets both in total and by specific accounts?
4.\tab How should the required level of current assets be financed?

\f39\fs24\insrsid12588051\charrsid10636471 5.\tab Is there a relationship between
wor
king capital control and the }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid4196827\charrsid10636471 financial}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid12588051\charrsid10636471 performance of a company or
firm?
\par }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid13112175 1.3\tab }
OBJECTIVES OF THE STUDY
\f39\fs24\insrsid12588051\charrsid10636471 The objective}{\rtlch\fcs1
\f39\fs24\insrsid13112175 s of this }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12588051\charrsid10636471 (study) research work will among others
include the following;
1.\tab To determine the optimal level of working capital
\f39\fs24\insrsid12588051\charrsid10636471 2.\tab To examine the working capital
control on the }{
financial}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12588051\charrsid10636471 performance of companies or firms.
To know the combination of the components of working capital that }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid13461339 will maximize the }
value of the company.

4.\tab To know how the required working capital should be financed.
\par 5.\tab To ascertain funds level of investment in working capital

To know the general effect of working capital control on a company's profits.
\f39\fs24\insrsid12588051\charrsid10636471 1.4\tab SIGNIFICANCE OF STUDY
\f39\fs24\insrsid12588051\charrsid10636471 Working capital accounts for over 3% of
a }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid2455586\charrsid10636471 company\rquote s}
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12588051\charrsid10636471 or
firms total assets and its proper management cannot be over emphasized.}
{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid2455586 }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid12588051\charrsid10636471 This }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid2455586\charrsid10636471 study}
\ltrch\fcs0 \f39\fs24\insrsid12588051\charrsid10636471 is significant in}
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12588051\charrsid10636471 the following
ways:
It highlights working capital control to a company or an organization.
\f39\fs24\insrsid12588051\charrsid10636471 2.\tab The research work will pore to be
}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid5509673\charrsid10636471 relevant}
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12588051\charrsid10636471 to
company/firm wishing to adopt new working policies.
\par 3.\tab It}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid5509673
brings to the consciousness of }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid5509673\charrsid10636471 management;}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid12588051\charrsid10636471 the impact working capital has on
general performance of the company.
\par 4.\tab Using a sample of selected firms, the research work }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid5509673\charrsid10636471 depicts}
the level of working capital control amongst Nigeria managers.
5.\tab To ensure the solvency of companies though their knowledge.
\par
\par 1.5\tab SCOPE OF THE STUDY
The research work will cover a number of selected firms and their control working
capital.
\li720\ri0\sl480\slmult1\nowidctlpar\tx720\wrapdefault\faauto\rin0\lin720\itap0\par
arsid10315864 {\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12588051\charrsid10636471 In }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid4745279\charrsid10636471 analysis}{\rtlch\fcs1 \af39\afs24

\ltrch\fcs0 \f39\fs24\insrsid12588051\charrsid10636471 of the firms, working
capital will be restricted to only three (3) component stock,}{\rtlch\fcs1
\f39\fs24\insrsid4745279 account receivable or debtors }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12588051\charrsid10636471 and cash.
\f39\fs24\insrsid12588051\charrsid10636471 Since }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid1406041\charrsid10636471 marketable}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid12588051\charrsid10636471 securities are }
scarcely}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12588051\charrsid10636471 invested upon
by }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid1406041\charrsid10636471
these}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
firms.
\par 1.6\tab LIMITATION OF THE STUDY
\f39\fs24\insrsid12588051\charrsid10636471 It is human to know that in the
course of carrying out this research work a number of }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid7634791\charrsid10636471 constraints}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12588051\charrsid10636471 will }
{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid7634791\charrsid10636471 militate}
against it.}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid7634791 The }
{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12588051\charrsid10636471 first was
uncooperative attitudes of staffs of some of the visited firms in the area of
reveal}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid7634791 ing}
\ltrch\fcs0 \f39\fs24\insrsid12588051\charrsid10636471 attitude policies as }
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid7634791 some were }
considered to }{
chisel}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12588051\charrsid10636471 to be reveal}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid7634791 e}{
\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12588051\charrsid10636471 d.
\f39\fs24\insrsid12588051\charrsid10636471 Another limitation i}{\rtlch\fcs1
\f39\fs24\insrsid1341718 s}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12588051\charrsid10636471 time available to the }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid1341718\charrsid10636471 research;}
\ltrch\fcs0 \f39\fs24\insrsid12588051\charrsid10636471 this factor will be
responsible for the number of firm's studies. The time also hindered the extensive
co}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid1341718 nsultation of
material}{
\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12588051\charrsid10636471 s }
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid1341718 as }{\rtlch\fcs1
the research would have loved to finance at the disposal of the }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid1341718 researcher was set back which also
includes inadequate finance.}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12588051\charrsid10636471 1.7\tab DEFINITION OF TERMS
\f39\fs24\insrsid12588051\charrsid10636471 (a)\tab }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\ltrch\fcs0 \f39\fs24\insrsid12588051\charrsid10636471 capital: some called gross
working capital.}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid14500304 }
{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12588051\charrsid10636471 It simply }
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid3754147 refers to current
assets and it}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12588051\charrsid10636471 is
a firm's }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid3754147 investment
in short }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12588051\charrsid10636471 term assets-cash, }{\rtlch\fcs1
\f39\fs24\insrsid3754147\charrsid10636471 inventory, and}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12588051\charrsid10636471 account
receivable.
\f39\fs24\insrsid12588051\charrsid10636471 (b)\tab }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid3754147\charrsid10636471 Short}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid12588051\charrsid10636471 term: A period of time
usually not exceeding one (year) }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\ltrch\fcs0 \f39\fs24\insrsid12588051\charrsid10636471 year.
\par (c)\tab }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid742578\charrsid10636471 Long}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid12588051\charrsid10636471 term: A period of time
usually exceeding one }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid3222575\charrsid10636471 financial}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12588051\charrsid10636471 year.
\f39\fs24\insrsid12588051\charrsid10636471 (d)\tab Networking Capital:}{\rtlch\fcs1
\f39\fs24\insrsid12588051\charrsid10636471 The difference between current assets
and current liabilities.
\f39\fs24\insrsid12588051\charrsid10636471 (e)\tab Management: Organization and
control of activities.
\f39\fs24\insrsid12588051\charrsid10636471 (f)\tab Inventory: Refers to stock of
raw }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid742578\charrsid10636471 materials}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12588051\charrsid10636471 , work in
progress, and finished good.
\f39\fs24\insrsid12588051\charrsid10636471 (g)\tab Account Receivable (Debtors):}
\f39\fs24\insrsid12588051\charrsid10636471 Debtors due within one year.
\f39\fs24\insrsid12588051\charrsid10636471 (h)\tab Marketable Securities:}
\f39\fs24\insrsid12588051\charrsid10636471 Securities that can be turnover on short
notice}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid742578 .}
\par
REFERENCES
1440\li1440\ri0\sl480\slmult1\nowidctlpar\wrapdefault\faauto\rin0\lin1440\itap0\par
arsid15161290 {\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid15161290
Brigham, E. F. Houstone }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12588051\charrsid10636471 J.F. (1990): Fundaments of }{\rtlch\fcs1
\af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid12588051\charrsid10636471 managements; Dryden value
express, }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid6583784\charrsid10636471 Florida}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid12588051\charrsid10636471 , U.S.A}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid6583784 .}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12588051\charrsid10636471 Hampton}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid6583784\charrsid10636471 , J.J}{\rtlch\fcs1
(1975), }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid6583784 F}
inancial}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
decision marking concepts}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid6583784 p}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12588051\charrsid10636471 roblems and cases, 4th edition practice
hall int. New Jersey }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid6583784 U.S.A }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid6583784\charrsid10636471 pp}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12588051\charrsid10636471 . 177-206.
\f39\fs24\insrsid12588051\charrsid10636471 MortLand, I (199}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid6583784 6}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid12588051\charrsid10636471 )}{
\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid13334339 ,}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12588051\charrsid10636471 Budgeting for
non-financing management, pitman
\tab }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid13334339\charrsid10636471 Publication}{
London.
\f39\fs24\insrsid12588051\charrsid10636471 Osazevbau, H. O. (20}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid13334339 03), P}{\rtlch\fcs1
rinciples of finance, Safmos pub,}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12588051\charrsid10636471 Anofil
\par \tab }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid13334339 \tab }
Centres Sango, Ibadan.
\f39\fs24\insrsid12588051\charrsid10636471 Van Home, J.C.}{\rtlch\fcs1
\ltrch\fcs0 \f39\fs24\insrsid12588051\charrsid10636471 (1977)}{
\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid13334339 ,}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12588051\charrsid10636471 }
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid13334339 F}{\rtlch\fcs1
\f39\fs24\insrsid13334339\charrsid10636471 inancial}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid12588051\charrsid10636471 management and policy, 4th
edition.
\tab practice Hall Int. New Jersey, U.S.A
\par }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid13334339 Weston, J.F}
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12588051\charrsid10636471 .
Copeland T.F. (1988), Management finance (2nd edition) Casel Edu L}{\rtlch\fcs1
\af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid15473013 td.}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12588051\charrsid10636471 London.
CHAPTER TWO
71 {\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8470630 LITERATURE REVIEW}
\f39\fs24\insrsid8730533\charrsid10636471 2.1\tab WORKING CAPITAL
\f39\fs24\insrsid8730533\charrsid10636471 This is a term used to summarize the
financial resources }{
available}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 for a company's/firm's day to d}
\f39\fs24\insrsid1051006 a}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 y operations. It determines the liquidity
pos}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid1051006 i}{\rtlch\fcs1
\f39\fs24\insrsid8730533\charrsid10636471 tion of a firm. }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid1051006 T}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
he short-term assets or current assets and liabilities of a company or firm
represent the working capital }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid1051006\charrsid10636471 of that}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid1051006\charrsid10636471 company or}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 firm.
For the enhancing of an excellent performance of a company, most company managers
are }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid1051006\charrsid10636471
concerned}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
about}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 maintaining an adequate but }
\f39\fs24\insrsid1051006\charrsid10636471 not excess}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 of the components of working
capital.
\par 2.2\tab TYPES OF WORKING CAPITAL
\ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 capital can be said to be of two types:
permanent working capital and temporary working capital. It is divided this way
because permanent working capital decisions
are analysed differently form decisions to make temporary adjustments in the }
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8529068 working }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 capital balances.
\par (i)\tab Permanent working capital
This is the base level of working capital. The amount required independent of
ability.
\f39\fs24\insrsid8730533\charrsid10636471 The company needs it}{\rtlch\fcs1
\f39\fs24\insrsid8730533\charrsid10636471 permanent working capital on a
continuous basis even though a firm's cash, account }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid11343666\charrsid10636471 receivables}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 , inventory, etc. turnover
more frequently than once a year, there i}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 still need to maintain a minimum, below
which they should not go. For instance, extending trade }{\rtlch\fcs1
\f39\fs24\insrsid11343666\charrsid10636471 credit}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 is a normal practice to bo}
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid11343666 o}{\rtlch\fcs1
\af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 st sales, thereby creating
account }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid402461\charrsid10636471 receivable}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 .
\f39\fs24\insrsid8730533\charrsid10636471 Some amount of inventory is also required
for both manufacturing and
mechanizing}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
. Therefore, even though permanent working capital appears to be short-term in
nature, since it }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid676379\charrsid10636471 consists}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 of short-term }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid676379\charrsid10636471 components}
, it is long-term requirement.
\par (ii)\tab }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid229268\charrsid10636471 Temporary}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 Working Capital
\f39\fs24\insrsid8730533\charrsid10636471 This is the amount above the base level,
which is the result of
variat}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid229268 ions in
business activities; it is}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 caused by three (3) simultaneous
processes viz}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid229268 :
\f39\fs24\insrsid8730533\charrsid10636471 (a) The business cycle increase or
decreases the resources needs of all companies of firms over a multi year
period. }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 (b) Most firms are seasonal having an
amount cycle of activities. (c) Daily events impact resources needs since }
\f39\fs24\insrsid229268\charrsid10636471 revenue}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 and expenses and cash
inflows and outflows really balances on a day-to-day basis. Receivables and }
\ltrch\fcs0 \f39\fs24\insrsid229268\charrsid10636471 collections}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 follow the
pattern of sales expenses and payments in }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid229268\charrsid10636471 the}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid229268 -}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 other hand are commonly tied to the day
of the month.
In contrast to permanent working capital, temporary working capital is a short-term
requirement
\par 2.2.1\tab WORKING CAPITAL POLICY
\par \tab This refers to the firm's basic policies regarding:
\par (i)\tab Target levels of each category of current assets
\par (ii)\tab How current assets will be financed.
\par 2.2.2\tab WORKING CAPITAL CYCLE
The working capital cycle of firm is the sequence of transaction and events
involving current assets and current liabilities through which the firm }
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid2191810 or business make
profit. Figure }{
1 (One) below shows how the working capital cycle begins. When suppliers allow the
company to obtain stock and don't insist on immediate payments, while they are
waiting for payments, they are called creditor. The }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid2191810\charrsid10636471 stocks obtain}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 by the firm or company is
used in product}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid2191810 ion}{
\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 held
for resale or used in providing service. While the company holds the stocks
acquired, they form}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid2191810
the inventory of the company. Any product manufactured from}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 these stock and
held for re-sale also form part of the inventory of the }{\rtlch\fcs1
\f39\fs24\insrsid2191810\charrsid10636471 company}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 or firm. The resulting
product or services are sold to customers who may pay }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid2191810\charrsid10636471 cash}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 immediately or are allowed time to
pay. }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid2191810\charrsid10636471 If}{
\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 they
are allowed time to pay they become debtors of the company. Debtors eventually pay
i}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid2191810 n}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 cash. Cash is a
general term used to cover money held in notes or coin in the company's premises or
in bank account. Finally, the cash may be used to pay suppliers who as creditors
have }{
\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid2191810 been }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 waiting patiently
for payments.
\par 2.2.3\tab COMPONENTS OF WORKING CAPITAL
\f39\fs24\insrsid8730533\charrsid10636471 The }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12414494\charrsid10636471 components of working capital consist}

{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 of
current assets and current liabilities. }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12414494 A }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12414494\charrsid10636471 Current}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid12414494\charrsid10636471 asset}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 is }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid12414494\charrsid10636471 an asset}{\rtlch\fcs1
\af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 that is non intended for use
on }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12414494\charrsid10636471
continuous}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 basis in the firm's or company's
activities. It is an }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12414494\charrsid10636471 asset}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 that has been acquired with the
intension of sale or converted into cash with a relatively short space of time not
usually exceeding 12 months (one year). The term includes cash, inventory, and
account receivables. }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\par
\f39\fs24\insrsid12414494\charrsid10636471 A current liability on the other hands
refers}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12414494 to what the
firm owns,}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 that are due for payment within on year.
\f39\fs24\insrsid8730533\charrsid10636471 The major current liabilities items
include trade credit}{
\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12414494 ors}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 or }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12414494\charrsid10636471 acc}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12414494 o}{\rtlch\fcs1 \af39\afs24

\ltrch\fcs0 \f39\fs24\insrsid12414494\charrsid10636471 unt}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 payable}{\rtlch\fcs1
\af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid12414494 s}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 that evolved as a result of suppliers
who give credit by allowing time to pay}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12414494 .}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0

\f39\fs24\insrsid8730533\charrsid10636471 2.3\tab CONTROL OF THE COMPONENTS OF
WORKING CAPITAL
\f39\fs24\insrsid8730533\charrsid10636471 This r
efers to administration within policy guidelines of the components of current
assets and current liabilities. Since about 40% of a typical firm capital is
invested in current assets efficient working capital control is vital to the firm's
or company's pro
fitability.
Working capital as stated refers to the control or management of all aspects of
current assets and current liabilities. These }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid5648177\charrsid10636471 components}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 include cash, inventory, account
receivables and account payable.
\par 2.4\tab CASH CONTROL/MANAGEMENT
\f39\fs24\insrsid8730533\charrsid10636471 Cash is defi
ned as ready money in the bank or in the firm's premises. It is usually }
referred}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 to }{
\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid1399308\charrsid10636471 as
non-earning assets}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 .}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid1399308 }{
\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 It is
needed on the business to pay suppliers expenses, acquire more fund assets etc.
Generally, the goal of the cash manager is to minimize the amou
nt of cash the company holds for}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
use in conducting its normal business activities because of the opportunity cost of
holding cash. The manager also aims to holding sufficient cash to:
\f39\fs24\insrsid8730533\charrsid10636471 i.\tab Take }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid1399308\charrsid10636471 trade discount}{\rtlch\fcs1
\par ii.\tab Maintain credit worthiness
\par iii.\tab Meet unexpected cash needs
\f39\fs24\insrsid8730533\charrsid10636471 Practicing good cash management or
control entails:
\f39\fs24\insrsid8730533\charrsid10636471 1.\tab Knowing when where and how your
cash }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid1399308\charrsid10636471 needs}
will occur.
720\li1440\ri0\sl480\slmult1\nowidctlpar\wrapdefault\faauto\rin0\lin1440\itap0\para
rsid1399308 {\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 2.\tab Know what the best sources is for
meeting }{
traditional}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 cash needs and
\par 3.\tab Been }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid1399308\charrsid10636471 prepared}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 to meet these needs when
they oc
cur by keeping good relationship with bankers and other creditors. The starting
point to avoiding cash crisis is to develop a cash flow projection. }
Business}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 managers know
how to develop both short-term (weekly/monthly) cash flow projections to help them
ma
nage daily cash and long-term annual 3-5 year cash flow projection to help them
develop the }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid1399308\charrsid10636471 necessary}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 capital strategy to meet their company
or business needs. They also prepare and use understanding about where all the
money went.
\f39\fs24\insrsid8730533\charrsid10636471 At this point, it will be meaningful to }
\ltrch\fcs0 \f39\fs24\insrsid10764264\charrsid10636471 know}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 what cash flow
is. A cash flow simply refers to the flow of cash into and }{\rtlch\fcs1
\f39\fs24\insrsid10764264\charrsid10636471 out}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
of business over a period of time, watching the inflow and outflow of cash is a
major management taste. If the inflow is more than the outflow, then there is a
positive cash flow }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid10764264\charrsid10636471 and}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 the worry is }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid10764264\charrsid10636471 what}
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 use will the excess cash be
put to maximize profit. But on the control, when outflow exceeds inflow of cash,
there is a }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid10764264\charrsid10636471 negative}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 cash flow. A negative cash
flow is caused by any of these reasons: To much o
r absolute inventory or poor collection of account receivable.
There are components of cash flow which may be internal and external sources.
\par (1)\tab Operating cash flows:
\f39\fs24\insrsid8730533\charrsid10636471 This refers }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid6758578\charrsid10636471 to}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 the flow of cash }
generated}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid6758578 f}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 r}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid6758578 o}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 m internal operation}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid6758578 s}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 . }{\rtlch\fcs1
\f39\fs24\insrsid8730533\charrsid10636471 It is the }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid7940478\charrsid10636471 cash}{\rtlch\fcs1 \af39\afs24
generated from sales of }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid7940478\charrsid10636471 products}{\rtlch\fcs1 \af39\afs24
or services of a company or firm. It is the red life blood of }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid7940478\charrsid10636471 the}
company and because it is generated internally, it is under the company's control.
\f39\fs24\insrsid8730533\charrsid10636471 (2)\tab Financing Cash Flows:
\f39\fs24\insrsid8730533\charrsid10636471 This is the cash form external sources.
Such}{\rtlch\fcs1
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 as}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12078445 lenders, }{\rtlch\fcs1
\f39\fs24\insrsid8730533\charrsid10636471 investors and shareholders. A new loan,
the repayment of a loan, issuance of stock}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12078445 ,}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 an}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid12078445 d}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
the payments of dividend are some of the activities that would be included in this
section of the cash flow statement
\f39\fs24\insrsid8730533\charrsid10636471 (3)\tab This is }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid13712967\charrsid10636471 generated}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 from non-generating
activities. The }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
component}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 would }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid13712967\charrsid10636471 include}{\rtlch\fcs1
\f39\fs24\insrsid8730533\charrsid10636471 investment in plant and equipments or
other fixed assets. }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid13712967\charrsid10636471 None}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 requiring gains }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid13712967\charrsid10636471 or losses}
or other sources and uses of cash outside normal operations.
\f39\fs24\insrsid8730533\charrsid10636471 2.4.1\tab RATIONAL FOR HOLDING CASH
\par \tab The }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid6054178\charrsid10636471 reason for holding cash includes}
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 :
\par (1)\tab Transaction motive:
Cash balances are necessary in a business operations as payment must be made in
cash and receipt deposited in cash account. Cash balanced is known as transaction
balances.
(2)\tab Precaution motive:
\f39\fs24\insrsid8730533\charrsid10636471 Cas
h inflows and outflow are somewhat unpredictable with the degree of }
accuracy}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
varying among companies an}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12400321 d}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 industries. }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid12400321\charrsid10636471 Therefore}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 , a company or firm needs to
hold cash in reserve for random unforeseen circumstances. }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid12400321\charrsid10636471 These}{\rtlch\fcs1

\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 stocks are
called precautionary balances and the less predictable. The firm's or }{\rtlch\fcs1
\af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid9860491\charrsid10636471 company\rquote s}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 cash flow, the }
larger}{
\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 such
balances should be }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12387680\charrsid10636471 however}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 , if the }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid9860491\charrsid10636471 company}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 has easy access
to }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12387680\charrsid10636471 borrow}
funds, its needs for }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
precautionary}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 balances become reduced. However, most
companies firms that need large precautionary balances usually hold highly liquid }
\f39\fs24\insrsid1205533\charrsid10636471 securities}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 instead of holding raw cash}
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid1205533 .}{\rtlch\fcs1
\af39\afs24
\f39\fs24\insrsid8730533\charrsid10636471 (3)\tab Speculative motive:
\f39\fs24\insrsid8730533\charrsid10636471 Some cash balances may be hold to }
\ltrch\fcs0 \f39\fs24\insrsid5507396\charrsid10636471 enable}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 a firm to take
advantage of bargain opportunities that might arise. These balances are called
speculative balance.

\par 2.4.2\tab CASH MANAGEMENT TECHNIQUES
Cash management or control has change significantly over the past years as a result
}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid4216727 of two factors.
First from the e}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 a}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid4216727 rly 1970s to the mid 1980s, ther}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 e was upward
trend }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid4216727\charrsid10636471 to}
interest rates which increase the opportunity cost of holding cash and therefore,
encouraged financial managers to search for more efficient ways of managing and
controlling cash. Secondly, t
echnological developments particularly electronic funds transfer mechanism has
improved cash managements }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid4216727 and }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
control.
The company and its bankers perform most cash control activities jointly. Effective
cash control encourages proper }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid4216727\charrsid10636471 cash}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 management of both the cash inflows and

cash outflows and entails:
\f39\fs24\insrsid8730533\charrsid10636471 (1)\tab Synchronizing cash flows
\par (2)\tab Using flows
\par (3)\tab Setting available funds to where they are needed.
\par (4)\tab Accelerating collections
\par (5)\tab Controlling disbursement
\f39\fs24\insrsid8730533\charrsid10636471 The commonly used techniques for
accomplishing this task include:

\par (a)\tab CASH FLOW SYNCHRON}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid10624643 I}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 ZATION
\f39\fs24\insrsid8730533\charrsid10636471 Synchronized cash flows refer to a }
\ltrch\fcs0 \f39\fs24\insrsid15079949\charrsid10636471 situation}{\rtlch\fcs1
in which cash inflows coincide with cash outflows, thereby permitting firm to hold
low transaction balances. By improving their forecast and by arranging things so
that }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid15079949\charrsid10636471 cash
receipts coincide with cash requirement, firms/companies can reduce their
transaction bal}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid15079949 a}
{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 n}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid15079949 c}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 es to a min}{\rtlch\fcs1
\af39\afs24
mum. Recognizing all this, companies arrange bills to customers and also top pay
their own bills on a regular "billing cycle", throughout the month. This improves
the }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
synchronization}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 of cash }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid12020091 flows, which in turn enables companies to
reduce their cash }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 balances, decrease their bank
loans}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12020091 ,}{\rtlch\fcs1
lower interest and expenses, and boost profit.
\par (b)\tab CHEQUE CLEARING PROCESS.
This is the process of converting cheque that has been written and mailed to cash
in the payee's account. When customer writes and mailed a cheque, this does not
mean that funds are immediately available to a company in our bank account and the
bank will
tell us that we cannot write our own cheque against this }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid4866405\charrsid10636471 deposit until}
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 the
cheque }{
clearing}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 process has been completed in practice.
It may take a long-term for}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid4866405 a firm to process in}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 coming cheques
and obtain the use of the money. Firstly a cheque is delivered and then be }
{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12602870\charrsid10636471 cleared}
through the }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12602870\charrsid10636471 banking
system before the money can be put to use. Cheques are generally cleared through
clearing house made up o}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12602870 f}{
representatives of banks in the area, or by special }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid12602870\charrsid10636471 clearing}{\rtlch\fcs1
\af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid12602870\charrsid10636471 process}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 . If the
cheques }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12602870\charrsid10636471 was}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12602870\charrsid10636471 deposited}
{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 in the bank in
which it was done, that bank merely transfers funds through book keeping }
entries}{
\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 from
one of its depositors to another. The length of time required for cheques to be }
cleared}{
\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 is
thus a function of the distance between the payers and the }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12087704\charrsid10636471 payees\rquote }
{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 banks.}
\f39\fs24\insrsid8730533\charrsid10636471 Float is defined as the difference
between the balanced shown in a company's or an individual's }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid13124946 cheque book }{
\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 and
the balance in the books records. If the }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid1593963\charrsid10636471 company\rquote s}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 own }{\rtlch\fcs1

\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid1593963\charrsid10636471 collection}
and clearing process is more efficient than}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid1593963 that}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
of the recipient of its cheques, which is generally, shown negative balance on its
books but have a positive balance on the records of }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid1593963\charrsid10636471 its}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 banks. A company or firm
must be able to }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid1593963\charrsid10636471 forecast}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 its disbursement and }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid1593963\charrsid10636471 collections}
accurately in order to make optimum use of float. It }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid1593963\charrsid10636471 is entirely}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 proper to }
{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid1593963\charrsid10636471 forecast}
that your bank will have recorded a}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid1593963 s}
your balance and the}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid1593963
n}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 }
{
\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid1593963 t}{\rtlch\fcs1
o make decision based on the estimate, even if that balance is different from the
balance you have on your own books. However, it is fraudulent to forecast as
overdrawn situation and then tell the bank you expect to have a positive balance.
Basically, the
size of flows that float is a }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid1593963\charrsid10636471 function}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid1593963 of the firm's ability to spend up}
\f39\fs24\insrsid1593963\charrsid10636471 collection}{\rtlch\fcs1 \af39\afs24
on cheques received and to show down collections on cheques drawn.
\par
\f39\fs24\insrsid8730533\charrsid10636471 (c)\tab ACCELERATION OR RECEIPTS
\f39\fs24\insrsid8730533\charrsid10636471 Financial managers have searched for ways
to collect }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid3955552\charrsid10636471 receivables}
faster since credit transaction began. Although cash collections is the financial
managers }{
responsibility}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 , the speed with }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid3955552
which }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 cheques is cleared is dependent on the
banking operations and to get funds when they are now used both to speed
collections and to get f
unds when they are needed. Among them are:
\par (i)\tab LOCK BOXES
A lock boxes plan is one of the oldest cash management tool. It is a procedure used
to speed up collection and reduce float throug}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid2893888 h the use of a post office box }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 in the }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid2893888\charrsid10636471 payers\rquote }
local are}{
\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid4588423 a}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 . In this system,
incoming cheques are sent to post office boxes rather than to corporate }
{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid2893888\charrsid10636471 headquarters}
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 ,
several times a }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid1777388\charrsid10636471 day;}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 a local bank will collect all the }
content}{
\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 of
the lock box and deposit the cheques into the company's local account. The bank
would then provid
e the firm with a daily record of the receipts collected usually vise or electronic
data transmission in a format that }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid1777388 permits on-line up}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 dating the }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid1777388\charrsid10636471 firms\rquote }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 receivables.
All lock box system reduce the time enquired for a firm or company to receive
incoming cheques to deposit them and to get, then cleared through the banking
system so that it often increase the }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid4071392\charrsid10636471 availability}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 of funds by two for five
days over the }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
regular}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 system.
\par (ii)\tab PAYMENT BY WIRE
Companies now demand payments of larger bills by wise or even automatic electronic
debits. This increase the speed of the collection process and the computer
technology is making such a process more feasible.
\par 2.5\tab INVENTORY (STOCK) MANAGEMENT
\par \tab Inventory may by }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12654000\charrsid10636471 classify}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 as:
\f39\fs24\insrsid8730533\charrsid10636471 a.\tab Raw materials
\par b.\tab work in progress
\par c.\tab Finished goods.
\f39\fs24\insrsid8730533\charrsid10636471 These are essential part of virtually all
business operation, }{
especially}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 manufacturing firms or companies.
\f39\fs24\insrsid8730533\charrsid10636471 Since financial management }
\f39\fs24\insrsid13859514\charrsid10636471 is}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 responsible for both the
raising of needed c
apital to carry inventory for the overall profitability of the firm, we will look
at the financial aspect of inventory management or control.
\f39\fs24\insrsid8730533\charrsid10636471 Proper inventory management requires
close co-ordinator between }{
\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid13188799\charrsid10636471 the}
sales, purchasing, reduction and finance departments. The sales/marketing is
usually }{
\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid13188799\charrsid10636471 the}
first to spot changes in demand. These changes must them be worked into the
company's }{
purchasing}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
, and manufacturing schedules and the financial management arrange any financing
that will be needed to support the inventory building up lack of co-ordination
among departments, poor, poor sales }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid13188799\charrsid10636471 forecast}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 or both can lead to
disaster.
\par
\f39\fs24\insrsid8730533\charrsid10636471 2.5.1\tab INVENTORY COST
\f39\fs24\insrsid8730533\charrsid10636471 The goal of inventory control or
management is to ensure that the i
nventory needed to sustain operations are available, while at the same time holding
the cost of ordering and }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid13258125\charrsid10636471 carrying}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 inventory to the lowest }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid13258125\charrsid10636471 possible}
level. The cost of inventory is divided into three (3) categories; Carrying cost,
Ordering cost, and Recurring cost and the cost incurred if the company or firm runs
shot of inventory.
d13258125 {\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid13258125
Inventory is costly to store, therefore there is always pressure to reduce
inventory as part of a company's overall cost containment strategies. However,
there }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
is opportunity cost}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
associated with building to little inventory and these cost can be severe.
Generally, if a firm carries small inventory, it most re-order frequently. This
increase ordering }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid5329757
cost for more important, firms }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 can}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid5329757 face }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 larger costs (for example an immediate
loss of sales and goods with which can leaf to lower sales in future) if they do
not have the inventory on hand to meet the customer's demands.
\par 2.5.2\tab INVENTORY CONTROL SYSTEM
\f39\fs24\insrsid8730533\charrsid10636471 Inventory management also involves the
establishment of an }{
inventory}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 control system. Inventory control system
range from simple to}{\rtlch\fcs1 \af39\afs24
\f39\fs24\insrsid8730533\charrsid10636471 extremely complex depending on the size
of the firm and the nature of }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid335859\charrsid10636471 inventory}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 . }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid335859\charrsid10636471 For}
\f39\fs24\insrsid335859\charrsid10636471 example, one}{\rtlch\fcs1 \af39\afs24
simple control procedure is the red line }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid335859\charrsid10636471 method, where}{\rtlch\fcs1 \af39\afs24
inventory items are stocked in a bin, a red line is drawn around the inside of the
bin at the level of the recorder point and inventory clerk places orders when the
red }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid6042714\charrsid10636471
line shows}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0

\par 2.6 }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid4526321 \tab }
DEBTORS (}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
ACCOUNT RECEIVABLES) CONTROL
\f39\fs24\insrsid8730533\charrsid10636471 Account receivables refer to a
balance due from a customer companies would in general rather sell for cash than }
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid2965205 on }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8978856\charrsid10636471 credit. The}
{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 dec}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid2965205 i}{\rtlch\fcs1 \af39\afs24
sion to sell for cash or on credit is balancing profitability and liquidity. Credit
terms are sales attraction and so}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 the longer the time a firm or }
companies allow}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
its customers to pay}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid4334717
,}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471
the greater the sales and the possible profits. }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid4334717\charrsid10636471 However}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 , the longer the credit terms
the greater the amount of debtors (account }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 ) and the greater the
possible strain on the company's liquidity (Osazevbaru 2003)}{\rtlch\fcs1
\f39\fs24\insrsid14102832 C}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 arrying receivables has both direct an}
\f39\fs24\insrsid3831367 d}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 indirect }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid3831367\charrsid10636471 cost, but}{\rtlch\fcs1
\f39\fs24\insrsid8730533\charrsid10636471 it also has an important benefit,
granting credit will increase sales.}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 Receivable management or control begins
with the decision of whether or not to create credit. A proper monitoring system }
\f39\fs24\insrsid15932945 is important because without it,}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 receivables will build up to
excessive levels. Cash flows will decline and bad }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid15932945\charrsid10636471 debts}{\rtlch\fcs1
will off set profits and sales, corrective actions is often needed and the only
way to know whether the situation is getting out of hand is to set up and then
follow a good receivable control system.
\par 2.6.1 THE ACCUMULATION OF RECEIVABLES

The total amount of account receivables outstanding depends at any given time on
two factors}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8938160 }
(a)The volume of credit sales}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 (b)}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8938160 }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 the average
length between sales and collection time. }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 Also, any receivables increase must be
financed in some manner but the entire amount of receivables does not have to}
\f39\fs24\insrsid8730533\charrsid10636471 be financed because the profit portion
does not represent a cash flow.
2.6.2\tab MONITORING THE RECEIVABLE POSITION
Inventor should pay close attention to account receivable management, as can be
misled by reported financial statement and later suffer serious financial losses on
an investment. When a credit sale is made, the following }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid5854020\charrsid10636471 event occurs}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 :
\f39\fs24\insrsid8730533\charrsid10636471 1.\tab Account }{\rtlch\fcs1
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 are increase by the sales
price.
\par 2.\tab The different is profit, which is added to retain earnings.
\par 3.\tab Inventories are reduced by the cost of goods sold.
1560543 {\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid815127 I}{\rtlch\fcs1
f the sales are for cash, }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid10103430 t}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 hen the cash from the sales has actually
been received by the firm, but i
f sales is on credit, the firm will n}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid10103430 o}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 t receive }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid10103430\charrsid10636471 the}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid10103430\charrsid10636471 cash}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 from the sales unless and until the
account is colleted. Firms have been known to }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid10103430\charrsid10636471 encourage}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 sales to very weak customers in order to
report a hi}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid6424909 gh
profit. This will boost the }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
firm stock price at least until credit sales begin to lower earning at which time
the stock price will fall. The following analysis will detect any questionable
practice, as well as any unconscious deterioration in quality of account receivable
such early
detection could help investors avoid losses.
1.\tab DAYS SALES OUTSTANDING (DSO)
The average length of time required to collect credit sales is what is referred to
by day sales outstanding. The DSO can be calculated as follows:
\f39\fs24\insrsid8730533\charrsid10636471 DSP}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid7043756\charrsid10636471 : =}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\ul\insrsid8730533\charrsid10636471 Receivables
}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid3019460 \tab }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 Sales per day
The DSP IS then compared to the firm's or company' own credit terms to ensures it
complie}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid14431619 s}
{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid13192666\charrsid10636471 with}
management laid down policies.
\par 2.\tab AGING SCHEDULES
\f39\fs24\insrsid8730533\charrsid10636471 An aging schedule is a }{\rtlch\fcs1
\f39\fs24\insrsid6977265\charrsid10636471 report}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 showing how long accounts }
receivables}{
\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 have
been }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid6977265\charrsid10636471 outstanding}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 . It breaks down a firm/company
receivable by age of account.
\f39\fs24\insrsid8730533\charrsid10636471 Ag}{\rtlch\fcs1 \af39\afs24
ing schedule can be developed f}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 r}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 m the company' account receivable ledger
n}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid925062 o}{\rtlch\fcs1
t form the summary data contained in }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\ltrch\fcs0 \f39\fs24\insrsid925062 statement. However, W}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 ellrun}{\rtlch\fcs1 \af39\afs24
companies have computerized their account receivable records, so it is easy to
determine the aging of each invoice, to sort electronically by age categories, as
this to generate an aging schedule.
\f39\fs24\insrsid8730533\charrsid10636471 Management should }{\rtlch\fcs1
\f39\fs24\insrsid3357143\charrsid10636471 constantly}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 monitor both DSO and he
aging schedule to detect trends, to see how collections experience compare with its
}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid3357143\charrsid10636471 credit}
terms, and to see }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid3357143\charrsid10636471 how}
effectively the credit department is operational in comparison with other firms or
companies in the industry. If the DSO starts to lengthen, or if }{\rtlch\fcs1
\af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid15890891\charrsid10636471 the}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 aging }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid15890891\charrsid10636471 schedule}
{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 begins to show
an increasing percentage of past due account then, the companies credit policy many
need to be tightened. Therefore, a change in either the DSO or the aging schedule
i}{
\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid15803418 s}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 an indication to
investigate further. The day sales ou
tstanding and the aging schedule are important and useful tools fo}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid5060505 r}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 receiving the c}{\rtlch\fcs1
\af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid5060505 red}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 i}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid4526321\charrsid10636471 apartment\rquote s}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 performance.
\par 2.6.3\tab CREDIT POLICY
This refers to a set of decision of a company that answers several questions such
as:
\f39\fs24\insrsid8730533\charrsid10636471 i.\tab To whom should credit be extended?
\f39\fs24\insrsid8730533\charrsid10636471 ii.\tab
How much credit should be allowed at an individual level and in total?
\par iii.\tab How long should the credit be and what is to be done about }
defaulting}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 debtors.
\f39\fs24\insrsid8730533\charrsid10636471 The objectives of a company or firm is
assured to the credit
policy that is taken in }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid10040272\charrsid10636471 conjunction}{\rtlch\fcs1 \af39\afs24
with other polices decision maximizes the expected profit of }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid10040272\charrsid10636471 the}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 company o}
{\rtlch\fcs1
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 firm.
A company has at least four factors under its control that can influence the number
}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid6758723\charrsid10636471 of
its}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471
deb}
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid30823 t}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 o}{\rtlch\fcs1
\ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 s and the level of debts. They are:
\f39\fs24\insrsid8730533\charrsid10636471 1.\tab Customers to sell
\par 2.\tab The term of credit/sales
\par 3.\tab Cash discounts offered for prompt payments
\par 4.\tab Follow up procedure on show payments
\f39\fs24\insrsid8730533\charrsid10636471 1.\tab CUSTOMERS TO SELL
The choice of which customers to sell is really a question of the level of }
risk}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471
of non-payment that is considered }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0

\f39\fs24\insrsid3280337\charrsid10636471 acceptable}{\rtlch\fcs1 \af39\afs24
with every credit sales, there is some risk that the customer will be unable to
pay at as when due. But for large }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid10576325\charrsid10636471 companies\rquote }{\rtlch\fcs1
\f39\fs24\insrsid10576325 (}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 customer), the risk is so small that some
}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid10576325\charrsid10636471 times}
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 it
is not even considered. With small liquid companies or
firms, the risk of non-questions of even selling them. At some point in between
these two extremes, }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid10576325
t}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471
he company is faced with difficult choice whether or not to sell.
\par 2.\tab TERMS OF CREDIT/SALES
\f39\fs24\insrsid8730533\charrsid10636471 When decided to sell to a customer the
firm or company has t
o decide on the terms of sales. The terms of }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid5733119\charrsid10636471 sales}{\rtlch\fcs1
comprises of credit terms that will be offered and the level of cash discounts.
Credit term is the length of time the buyer is given to pay. }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid5733119\charrsid10636471 E.g.}{\rtlch\fcs1
\af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 a term "net 30 days" (means
that 30 days after delivery or invoice the account should be paid).
\par 3.\tab CASH DISCOUNTS
Traditionally, cash discounts are offered by sellers to buyers to encourage early
payments (Osazevbaru 2003). Cash discounts are cost to the selling company but are
of value to the buyer. Whether the
buyers decide to pay early and take advantage of the cash discount being offered or
to wait until the end of the }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid15937091\charrsid10636471 credit}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 period before paying depends on some
extent on the size of the discount.
\par }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid2760020 4.\tab }
FOLLOW UP PROCEDURE ON SLOW PAYMENT
Once the sales have been made and the terms offered, the firm must ensure that }
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid403874\charrsid10636471 the}
cash is received as quickly as possible. This means sending reminders to
customers, since }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid403874\charrsid10636471 choosing}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 bad and doubtful debts can be an
expensive process, }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid403874
the }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471
firm or company must ensure that }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0

\f39\fs24\insrsid8730533\charrsid10636471 he selling price is adequate }
\f39\fs24\insrsid403874\charrsid10636471 to}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 cover all expenses and }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid403874\charrsid10636471 credit}
{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 losses. With
records provided by the aging schedule, steps would then be taken to collect, the
account that considered to have been }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid1659610\charrsid10636471 outstanding}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 for longer than on
acceptable length of time.
\li0\ri0\sl480\slmult1\nowidctlpar\tx720\wrapdefault\faauto\rin0\lin0\itap0\pararsi
\f39\fs24\insrsid8730533\charrsid10636471 2.6.4\tab }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid14169625 D}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 EFAULT POLICY
4169625 {\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid1472720 A }
default}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 policy is a }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid7226309\charrsid10636471 means}{\rtlch\fcs1
\f39\fs24\insrsid8730533\charrsid10636471 of deciding how long a defaulting debtor
should be pursued and how much should be spend on this pursuit }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid1472720\charrsid10636471 ideally}
{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 ; a default
policy and a credit policy should be decided simultaneously.
\par 2.7\tab WORKING CAPITAL FINANCING
Most companies usually take step to improve their working capital control. They may
reduce their cash, receivable and inventories to lower their operation cost and
raise profit. But then they still hold or have a substantial amount of
current assets and the funds invented have to be gotten from}{\rtlch\fcs1
\ltrch\fcs0 \f39\fs24\insrsid9585537\charrsid10636471 some}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid9585537\charrsid10636471 source}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid9585537 . Thi}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 s involves working capital financing
policy.
\par 2.7.1\tab ALTERNATIVE CURRENT ASSET FINANCING POLICY
Most business firms experience seasons/cyclical fluctuations example, }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid11614610\charrsid10636471 retailer\rquote
s}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471
peak around }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid11614610\charrsid10636471 Christmas}{\rtlch\fcs1 \af39\afs24
, construction firms peak mostly during the dry-season. Similarly, virtually all
firms/ companies build up current assets when }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid10178348\charrsid10636471 the}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 economy is strong, but they then sell of

inventories and reduce receivables when the economy slack off. Still current assets
rarely drop to zero. That is }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid10178348\charrsid10636471 why}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 we talk of permanent current assets,
which are the current on hand at low point of the cycle. Then as sales increase
during }{
\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid10178348 t}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 he upswing,
current assets most likely increase and those }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid7340704\charrsid10636471 additional}{\rtlch\fcs1 \af39\afs24

\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 current }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid7340704\charrsid10636471 assets}
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 are defined as temporary
current assets. The manner in which }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid7340704\charrsid10636471 permanent}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 and temporary current assets is finance
is called the firms current assets financing policy.
\par }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid15998372 2.7.2\tab }
ADVANTAGE AND DISADVANTAGES OF SHORT-TERM FINANCING
The three possible financing policies are (a) Maturity matching approach (b)
Aggressive approach (c) Conservative approach. The aggressive policy called for the
greatest use of short-term debt, while the conservation policy called for the
least. Maturity
matching falls in between. Although using short-term financing is generally }
riskier}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
than term credit in comparison, short-term }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid15410137\charrsid10636471 credit}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 still has some
significant advantages.
\par 2.7.3\tab SOURCES OF SHORT-TERM FINANCING
\f39\fs24\insrsid8730533\charrsid10636471 Analysis about the }{\rtlch\fcs1
\f39\fs24\insrsid10496413\charrsid10636471 risk}{\rtlch\fcs1 \af39\afs24
\f39\fs24\insrsid10496413\charrsid10636471 est}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 of short-term versus long-term debts

depends on the }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid10496413\charrsid10636471 type}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid10496413 s}{
\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 of
short-term credit that is }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid10496413\charrsid10636471 actually}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 used. They are numerous sources of
short-term funds. These include the following four major type}{\rtlch\fcs1
\ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 :
\f39\fs24\insrsid8730533\charrsid10636471 (i)\tab Acc}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid12781052 rual (ii) Account payable (trade}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 credit) (iii) Bank loans }
overdraft}{
\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid6754700 (iv) C}
ommercial papers.
(i)\tab ACCRUALS
These are continually recurring short term liabilities especially accrued wages and
accrued taxes. }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid1342530\charrsid10636471 Companies}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 or firms }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid11298035\charrsid10636471 generally}{\rtlch\fcs1
, pay employees in a weekly, by weekly or monthly basis, so the balance sheet will
typically }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid1342530\charrsid10636471 show}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 some accrued wages. Similarly, the firms

own estimated income taxes, the social security and inco}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid6645469 me taxes withheld f}
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 r}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid6645469 o}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 m employee payrolls and }{\rtlch\fcs1
\af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid6645469\charrsid10636471 the}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 sales taxes
collected are generally paid on a yearly monthly or }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid5652412\charrsid10636471 quarterly}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 basis, hence the balances
sheet will typically show some accrued taxes along with accrued wages}
\ltrch\fcs0 \f39\fs24\insrsid11416129 .}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
(ii)\tab ACCOUNT PAYABLE (TRADE CREDITORS)
\f39\fs24\insrsid8730533\charrsid10636471 Trade }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid13458674\charrsid10636471 credits are}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 debts arising from purchases
and recorded as an account }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid13458674\charrsid10636471 payable}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 by }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid13458674\charrsid10636471 the}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid13458674 firm or company.}{\rtlch\fcs1 \af39\afs24

\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 Account payable or grade }
credit}{
\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid13458674 s are}{\rtlch\fcs1
the largest simple category of short-term debt representing about 40% of the
current liabilities of an average non financial corporation. The percentage is some
what large for small companies often or companies because small companies often do
not qualif
y for financing from other sources}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
3458674 {\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8278462 Trade credit
i}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 s a spontaneous }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8278462\charrsid10636471 source}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 of financing
in }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8278462\charrsid10636471 the}
sense that it arises ordinary business transactions.
\par }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid6318674 (iii)}
.\tab SHORT-TERM BANK LOANS/OVERDRAFT
Commercial banks, whose loans generally appear on a firm's balance sheet as notes
payable are second in importance to trade-credit as source of short term financing.
As a company or firms financing }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid6953700\charrsid10636471 needs}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 increase}{\rtlch\fcs1
\ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 , it request addition}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid6953700 al}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 funds from its bank }
\ltrch\fcs0 \f39\fs24\insrsid6953700 the key features of bank }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 loan are discount
bellows.
\f39\fs24\insrsid8730533\charrsid10636471 (A)\tab MATURITY:
\li1440\ri0\sl480\slmult1\nowidctlpar\wrapdefault\faauto\rin0\lin1440\itap0\pararsi
\f39\fs24\insrsid8730533\charrsid10636471 Al
though banks do not make long-term loans, the bulk of their lending is short-term
basis. About two third of all banks loan mature in a year or less. Banks loans to
businesses are usually written as (90) ninety days or renewed.
\f39\fs24\insrsid8730533\charrsid10636471 (B)\tab PROMISSORY NOTE: When a b
ank loan is approved, the agreement is executed by signing a promissory note, which
specifies
\f39\fs24\insrsid8730533\charrsid10636471 1.\tab The amount borrowed
\par 2.\tab The percentage }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid853164\charrsid10636471 interest}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 rate
The repayment schedule which call for either a lump sum, is a series of
installment.
\f39\fs24\insrsid8730533\charrsid10636471 4.\tab Any other term and conditions to }
{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid13707780\charrsid10636471 which}
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 the
bank might agree.
\par 5.\tab Any collateral that might have to be put up as security for the loan.
\f39\fs24\insrsid8730533\charrsid10636471 When the not}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid4282278 e}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 is signed the bank credits the borrow}
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid4282278 er}{\rtlch\fcs1
\f39\fs24\insrsid8730533\charrsid10636471 s account with the loaned amount.
71 {\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid11732518 (iv)}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 .
\tab COMMERCIAL PAPERS
Commercial paper is a type of unsecured promissory note issued by large, strong
companies, to pension funds, insurance companies, to money market}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8344435 ,}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 Mutual funds, and to the bank}
\f39\fs24\insrsid3089340 T}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 hough the amount of commercial paper
outstanding is smaller than bank outstanding. This form of financing has grown
rapidly in recent years.
\f39\fs24\insrsid8730533\charrsid10636471 MATURITY AND COST
\f39\fs24\insrsid932305\charrsid10636471 Maturity}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 of commercial paper generally varies
form one to nine months. The interest rate on commercial papers }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid7559629\charrsid10636471 fluctuate}
{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 with supply and
demand conditions, if is determined in the market place, varying daily as
conditions changes.
\f39\fs24\insrsid8730533\charrsid10636471 USE OF COMMERCIAL PAPERS
The use of commercial papers is restricted to a comparatively small number of very
large concer}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid6643239 n}
s that are exceptionally good credit risk. Teachers prefer to handle }
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid7877678 t}{\rtlch\fcs1
he papers of companies whose network is very high (May be }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\striked1\insrsid7877678\charrsid7877678 N}{\rtlch\fcs1
100 million or more) are whose annual borrowing expenses }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\striked1\insrsid7877678\charrsid7877678 N}
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 100
million.
\f39\fs24\insrsid8730533\charrsid10636471 One potential problem with commercial
paper is that a debtor who is in temporary financial difficulty may receive }
\f39\fs24\insrsid4876381\charrsid10636471 little}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 help because commercial
paper dealings are generally less personal than bank}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid4876381 relationships, thus banks are generally more able and
willing to help a }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
good customer whether a temporary form than is a commercial paper dealer on the
other hand, using a wide range of credit sources, including financial institution.
\par
\par
\par
\par
\par
\par
\par
REFERENCES
\f39\fs24\insrsid8730533\charrsid10636471 Brigham E.F. Joel, E.H. (1996)}
\f39\fs24\insrsid8730533\charrsid10636471 Fundamentals of financial management.
Dryden value press, Florida, U.S.A}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0

\f39\fs24\insrsid15672881\charrsid10636471 George}{\rtlch\fcs1 \af39\afs24
, E.P. (1996), Essential of financial management, Harper Collins. Collins Pub. New
York U.S.A}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533
\f39\fs24\insrsid8730533\charrsid10636471 Omuya, J.O. (1983)}{\rtlch\fcs1
Frankwood's Business Accounting West Africa Edition Longman Group London.}
Osazerbaru, }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 H.O. (2003)}{\rtlch\fcs1 \af39\afs24
Principles of finance, safnos pub. Amofil Centres Sango, Ib}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid11432721 a}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 dan.}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 Pandey I.M. (1993)}{\rtlch\fcs1
\f39\fs24\insrsid8730533\charrsid10636471 Financial management. }{\rtlch\fcs1
\ltrch\fcs0
\f39\fs24\super\insrsid3482941\charrsid3482941 th}{\rtlch\fcs1 \af39\afs24
\f39\fs24\insrsid8730533\charrsid10636471 edition. Vikas }{\rtlch\fcs1
\f39\fs24\insrsid3482941 Publishing house Pvi ltd. New Delhi-I}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 ndia}{\rtlch\fcs1
\f39\fs24\insrsid8730533\charrsid10636471 Richard, A.R., Steward, C.M. (1996)}
{\rtlch\fcs1
\ltrch\fcs0 \f39\fs24\insrsid8730533\charrsid10636471 Principles of Corporate
finance, McGraw Hill Companies Inc. New York, U.S.A}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid8730533\charrsid10636471 Van Home J.C. (1977)}{\rtlch\fcs1
Financial management and policy, 4h edition practice Hall Int. New jersey, U.S.A
\par
\par
CHAPTER THREE
\par RESEARCH METHODOLOY
\par
\par 3.1\tab RESEARCH DESIGN
In the process of carrying out study, the impact of working capital control on the}
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid16397921 financial
performance of }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
companies}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid16397921 ,}
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12199516\charrsid10636471 an
example explanatory survey design was used.
The population of the study here is made up of 50 respondents directly involved in
components of working \tab capital such as work staff involved in }{\rtlch\fcs1
{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12199516\charrsid10636471 control.
\f39\fs24\insrsid12199516\charrsid10636471 A probability sampling method know as
simple random }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid16397921\charrsid10636471 sampling was}
used on}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid16397921 }
{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12199516\charrsid10636471 selecting the
sampling size and in administering questionnaire since it give every number of the
study population an equal }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid16397921\charrsid10636471 opportunity}{\rtlch\fcs1 \af39\afs24
\f39\fs24\insrsid12199516\charrsid10636471 of being in the sample.
\f39\fs24\insrsid12199516\charrsid10636471 3.2\tab THE TYPE AND SOURCES OF DATA
\f39\fs24\insrsid12199516\charrsid10636471 In }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
this study }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12199516\charrsid10636471 a combination of both prim}
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9532977 ary and secondary
data was used.
\par
\par P}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12199516\charrsid10636471 rimary data, which are the field}
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9532977 data, }
\f39\fs24\insrsid12199516\charrsid10636471 was generated through }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9456434\charrsid10636471 administered}
questionnaires and in some instances, personal interviews.
\f39\fs24\insrsid12199516\charrsid10636471 Secondary data was gotten from }
\ltrch\fcs0 \f39\fs24\insrsid9456434\charrsid10636471 relevant}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12199516\charrsid10636471 text books,
internet sources and journals.
\par 3.3\tab INSTRUMENT OF DATA COLLECTION
\f39\fs24\insrsid12199516\charrsid10636471 Questionnaires constituted the major
instr}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid7691955 ument for data collection in thi}
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12199516\charrsid10636471 s
research work. }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid7691955\charrsid10636471 Combinations for both open ended and
closed ended questioned were}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12199516\charrsid10636471 asked in two section}{\rtlch\fcs1
\f39\fs24\insrsid12199516\charrsid10636471 A and B.
Section A is made up of nine questions that are demographic in nature and are aimed
at obtaining information concerning the respondent's personal data.}{\rtlch\fcs1
\ltrch\fcs0
\f39\fs24\insrsid12199516\charrsid10636471 While B comprise of twelve (12)
questions aimed at }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid7691955\charrsid10636471 generating}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid12199516\charrsid10636471 information in relation to the study,
the \tab use of SA ,A ,UD,D,SD, as appropriate against each of the statement where:
\f39\fs24\insrsid12199516\charrsid10636471 \tab }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid7691955\charrsid10636471 SA =}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12199516\charrsid10636471 strongly agreed
\par \tab A }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid7691955\charrsid10636471 = agreed}{\rtlch\fcs1 \af39\afs24
\par \tab UD }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid7691955\charrsid10636471 = undecided}{\rtlch\fcs1 \af39\afs24
\par \tab D = disagreed
\par \tab SD }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid7691955\charrsid10636471 = strongly}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid12199516\charrsid10636471 disagreed
\par
\f39\fs24\insrsid12199516\charrsid10636471 All nine questions in se}{\rtlch\fcs1
\f39\fs24\insrsid8004944 le}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12199516\charrsid10636471 ction }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8004944 B }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12199516\charrsid10636471 are closed ended questions. The
remaining three questions were asked.
\f39\fs24\insrsid8004944\charrsid10636471 copy of}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid12199516\charrsid10636471 the questionnaire is shown
in appendix.
\par
\par 3.4\tab ACTUAL FIELD WORK
\f39\fs24\insrsid12199516\charrsid10636471 In this study, face - to -face interview
was adopted}{\rtlch\fcs1
\ltrch\fcs0 \f39\fs24\insrsid12199516\charrsid10636471 a small scale to complement
the questionnaires}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid2973903 }
{
were}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid2973903 }
administered}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12199516\charrsid10636471 myself by the
help of research assi}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid2973903
s}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12199516\charrsid10636471
tants directly to respondents and collection was done \tab directly from
respondents a couple of days later.
The use of personal interview along-side the questionnaires enable me to get a
better and clear understanding in matters and areas in which such clarity was
required. The questionnaires were therefore advantageous in this aspect as they
could be comple}{
\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid2973903 ted at the
conveniences of the }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12199516\charrsid10636471 respondents any time}{\rtlch\fcs1
\f39\fs24\insrsid12199516\charrsid10636471 before the date of collection.
\par
\par 3.5\tab METHOD OF DATA PRESENTATION
To aid analysis of data and promote understanding, simple tables will be used in
the presentation of data. A verbal summary will also be done.
\par 3.6\tab METHOD OF DATA ANALYSIS
\f39\fs24\insrsid12199516\charrsid10636471 The data collect}{\rtlch\fcs1
\f39\fs24\insrsid9503335 ed}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12199516\charrsid10636471 are to be processed manually.}
\f39\fs24\insrsid12199516\charrsid10636471 Simple percentages will be used in
analyzing \tab distributions}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
f respondents and questionnaires administered.
\f39\fs24\insrsid12199516\charrsid10636471 Here, the number of positive, }
\ltrch\fcs0 \f39\fs24\insrsid9503335\charrsid10636471 negative}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12199516\charrsid10636471 and neutral
responses over fit number of }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid9503335\charrsid10636471 respond}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid9503335 ent}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid9503335\charrsid10636471 s}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid9503335 is multiplied }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12199516\charrsid10636471 by one hundred. }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9503335\charrsid10636471 i.e.}{\rtlch\fcs1
\af39\afs24
\par \tab }{\field\flddirty{\*\fldinst {\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12199516\charrsid10636471 EQ \\F(NUMBER OF RESPONSES,TOTAL NUMBER
OF RESPONDENTS) }}{\fldrslt }}\sectd \ltrsect
\pgnrestart\linex0\sectdefaultcl\sectrsid8679729\sftnbj {\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid12199516\charrsid10636471 \tab \tab X\tab }
{\field\flddirty{\*\fldinst {\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12199516\charrsid10636471 EQ \\F(100,1) }}{\fldrslt }}\sectd
\ltrsect\pgnrestart\linex0\sectdefaultcl\sectrsid8679729\sftnbj {\rtlch\fcs1
\par
\f39\fs24\insrsid12199516\charrsid10636471 This method of analysis is favoured }
\ltrch\fcs0 \f39\fs24\insrsid3307546\charrsid10636471 because}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12199516\charrsid10636471 computation }
carried}{
\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12199516\charrsid10636471 out
are }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid3307546 easier }
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12199516\charrsid10636471 and
i
t is easy to understand the analysis done using this method.
\par
\par
\par
\par
\par
CHAPTER FOUR
\par DATA }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid10964724\charrsid10636471 PRESENTATION AND}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid5574228\charrsid10636471 ANALYSIS
\par
\par 4.1\tab DATA PRESENTATION
This chapter is based on the response obtained from questionnaires administered.}
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid5574228\charrsid10636471 The outcome}
{\rtlch\fcs1
\ltrch\fcs0 \f39\fs24\insrsid5574228\charrsid10636471 or }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid24737\charrsid10636471 result}{\rtlch\fcs1
\af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid24737 s were}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid5574228\charrsid10636471 presented in the form of tables and
analysis was done in them, a total of 50 (fifty) }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid10964724\charrsid10636471 questionnaires}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid10964724 were given out and 45 (fo}
rty-five) questionnaires received }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid24737\charrsid10636471 from respondents}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid5574228\charrsid10636471 were used in the
analysis.
\f39\fs24\insrsid5574228\charrsid10636471 The presentation and analysis was done on
a questio
n basis as follow:
\par \tab QUESTIONS
\par \tab Do you know what working capital control entail?
\par

\f39\fs24\insrsid5574228\charrsid10636471 Table }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid8735300 4.}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid5574228\charrsid10636471 .1
\par \ltrrow}\trowd
\irow0\irowband0\ltrrow\ts11\trgaph108\trrh287\trleft753\trbrdrt\brdrs\brdrw10\brdr
cf1 \trbrdrl\brdrs\brdrw10\brdrcf1 \trbrdrb\brdrs\brdrw10\brdrcf1
\trbrdrr\brdrs\brdrw10\brdrcf1 \trbrdrh\brdrs\brdrw10\brdrcf1 \trbrdrv
\trftsWidth1\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\t
rpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllkhdrcols\tblind861\tblindtype3
\clvertalt\clbrdrt\brdrs\brdrw10\brdrcf1 \clbrdrl\brdrs\brdrw10\brdrcf1
\clbrdrb\brdrs\brdrw10\brdrcf1 \clbrdrr\brdrs\brdrw10\brdrcf1
\cltxlrtb\clftsWidth3\clwWidth2655\clshdrawnil
\cellx3408\clvertalt\clbrdrt\brdrs\brdrw10\brdrcf1
\clbrdrl\brdrs\brdrw10\brdrcf1 \clbrdrb\brdrs\brdrw10\brdrcf1
\clbrdrr\brdrs\brdrw10\brdrcf1
\clbrdrr\brdrs\brdrw10\brdrcf1 \cltxlrtb\clftsWidth3\clwWidth2229\clshdrawnil
\cellx7560
\pard \ltrpar\qj
\li0\ri0\sl480\slmult1\nowidctlpar\intbl\wrapdefault\faauto\rin0\lin0\pararsid83912
Options\cell Respondents\cell Percentage %\cell }\pard \ltrpar
\ql
\li0\ri0\sa200\sl276\slmult1\widctlpar\intbl\wrapdefault\aspalpha\aspnum\faauto\adj
ustright\rin0\lin0 {\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid5574228\charrsid10636471 \trowd
\irow0\irowband0\ltrrow\ts11\trgaph108\trrh287\trleft753
\trbrdrt\brdrs\brdrw10\brdrcf1 \trbrdrl\brdrs\brdrw10\brdrcf1
\trbrdrh\brdrs\brdrw10\brdrcf1 \trbrdrv\brdrs\brdrw10\brdrcf1
\
trftsWidth1\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\tr
paddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllkhdrcols\tblind861\tblindtype3
\clvertalt\clbrdrt\brdrs\brdrw10\brdrcf1 \clbrdrl\brdrs\brdrw10\brdrcf1 \clbrdrb
\brdrs\brdrw10\brdrcf1 \clbrdrr\brdrs\brdrw10\brdrcf1
\cellx7560\row
\ltrrow}\trowd
\cellx7560
\pard \ltrpar\qj
Yes\cell 8\cell 17.8\cell }\pard \ltrpar\ql \li0\ri0\sa200\sl276\slmult1
\widctlpar\intbl\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0
\trowd
cf1 \trbrdrl
\brdrs\brdrw10\brdrcf1 \trbrdrb\brdrs\brdrw10\brdrcf1
\trbrdrr\brdrs\brdrw10\brdrcf1 \trbrdrh\brdrs\brdrw10\brdrcf1
\trbrdrv\brdrs\brdrw10\brdrcf1
\
\cellx7560\row
\ltrrow}\trowd
\cellx7560
\pard \ltrpar\qj
No\cell 37\cell 82.2\cell }\pard \ltrpar\ql \li0\ri0\sa200\sl276\slmult1
\widctlpar\intbl\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0
\trowd
cf1 \trbrdrl
\brdrs\brdrw10\brdrcf1 \trbrdrb\brdrs\brdrw10\brdrcf1
\
\cellx7560\row
\ltrrow}\trowd \irow3\irowband3\lastrow
\ltrrow\ts11\trgaph108\trrh281\trleft753\trbrdrt\brdrs\brdrw10\brdrcf1
\trbrdrl\brdrs\brdrw10\brdrcf1 \trbrdrb\brdrs\brdrw10\brdrcf1
\cellx7560
\pard \ltrpar\qj
Total\cell 45\cell 100\cell }\pard \ltrpar
\ql
\f39\fs24\insrsid5574228\charrsid10636471 \trowd \irow3\irowband3\lastrow \ltrrow
\ts11\trgaph108\trrh281\trleft753\trbrdrt\brdrs\brdrw10\brdrcf1
\
\cellx7560\row
}\pard \ltrpar\qj
\f39\fs24\insrsid5574228\charrsid10636471 \tab QUESTIONS A (SECTION A)
Do you have a formal training on working capital control in your company?

71 {\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid7226494 \tab }{\rtlch\fcs1
d4288023 {\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid16075792 Table }
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8735300 4.}{
\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid16075792 1}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid7226494 .}{\rtlch\fcs1 \af39\afs24
\par \ltrrow}\trowd \irow0\irowband0\ltrrow\ts11\trgaph108\trrh500\trleft-
108\trbrdrt\brdrs\brdrw10\brdrcf1 \trbrdrl\brdrs\brdrw10\brdrcf1
\tpvpg\tphpg\tposx2289\tposy8944\tdfrmtxtLeft180\tdfrmtxtRight180\trftsWidth1\trfts
WidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3
\trpaddfr3\tbllkhdrrows\tbllkhdrcols\tblind0\tblindtype3
\cellx2743\clvertalt\clbrdrt\brdrs\brdrw10\brdrcf1 \clbrdrl
\brdrs\brdrw10\brdrcf1 \clbrdrb\brdrs\brdrw10\brdrcf1
\clbrdrl\brdrs\brdrw10\brdrcf1 \clbrdrb\brdrs\brdrw10\brdrcf1 \clbrdrr
\brdrs\brdrw10\brdrcf1 \cltxlrtb\clftsWidth3\clwWidth1808\clshdrawnil
\cellx6474\pard \ltrpar\qj
\li0\ri0\sl480\slmult1\nowidctlpar\intbl\pvpg\phpg\posx2289\posy8944\dxfrtext180\df
rmtxtx180\dfrmtxty0\wraparound\faauto\rin0\lin0\pararsid11039682 {
Options\cell Respondents\cell Percentage\cell }\pard \ltrpar\ql
ustright\rin0\lin0 {
\trowd \irow0\irowband0\ltrrow\ts11\trgaph108\trrh500\trleft-
\trbrdrb\brdrs\brdrw10\brdrcf1 \trbrdrr
\brdrs\brdrw10\brdrcf1 \trbrdrh\brdrs\brdrw10\brdrcf1
\
tpvpg\tphpg\tposx2289\tposy8944\tdfrmtxtLeft180\tdfrmtxtRight180\trftsWidth1\trftsW
idthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\
trpaddfr3\tbllkhdrrows\tbllkhdrcols\tblind0\tblindtype3 \clvertalt\clbrdrt
\brdrs\brdrw10\brdrcf1 \clbrdrl\brdrs\brdrw10\brdrcf1
\clbrdrl\brdrs\brdrw10\brdrcf1 \clbrdrb
\cltxlrtb\clftsWidth3\clwWidth1808\clshdrawnil \cellx6474\row \ltrrow}\pard
\ltrpar\qj
rmtxtx180\dfrmtxty0\wraparound\faauto\rin0\lin0\pararsid11039682 {\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid11039682\charrsid10636471 Yes\cell 3\cell
6.7\cell }\pard \ltrpar\ql
\irow1\irowband1\ltrrow\ts11\trgaph108\trrh500\trleft-
\trbrdrb\brdrs\brdrw10\brdrcf1 \trbrdrr\brdrs\brdrw10\brdrcf1 \trbrdrh
\brdrs\brdrw10\brdrcf1 \trbrdrv\brdrs\brdrw10\brdrcf1
\
\cltxlrtb\clftsWidth3\clwWidth1808\clshdrawnil \cellx6474\row \ltrrow}\trowd
\
\cltxlrtb\clftsWidth3\clwWidth1808\clshdrawnil \cellx6474\pard \ltrpar\qj
\af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid11039682\charrsid10636471 No\cell 42\cell
\
\ltrpar\qj
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid11039682\charrsid10636471 Total\cell
45\cell 100\cell }\pard \ltrpar\ql
\f39\fs24\insrsid11039682\charrsid10636471 \trowd \irow3\irowband3\lastrow
\ltrrow\ts11\trgaph108\trrh549\trleft-108\trbrdrt\brdrs\brdrw10\brdrcf1
\trbrdrr\brdrs\brdrw10\brdrcf1 \trbrdrh
\
\cltxlrtb\clftsWidth3\clwWidth1808\clshdrawnil \cellx6474\row }\pard \ltrpar\qj
\par
\par
\par
\par }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid11039682 QUESTION }
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid5574228\charrsid10636471 1
(SECTION B)
\f39\fs24\insrsid5574228\charrsid10636471 \tab Th}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid11039682 ere}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid5574228\charrsid10636471 is general lack of awareness of working
capital control.
\tpvpara\tphpg\tposx2241\tposy228\tdfrmtxtLeft180\tdfrmtxtRight180\trftsWidth3\trwW
idth7578\trftsWidthB3\trftsWidthA3\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpadd
fb3\trpaddfr3\tbllkhdrrows\tbllkhdrcols\tblind0\tblindtype3
\cellx2880\clvertalt\clbrdrt\brdrs\brdrw10\brdrcf1 \clbrdrl
\brdrs\brdrw10\brdrcf1 \clbrdrb\brdrs\brdrw10\brdrcf1
\clbrdrl\brdrs\brdrw10\brdrcf1 \clbrdrb\brdrs\brdrw10\brdrcf1 \clbrdrr
\brdrs\brdrw10\brdrcf1 \cltxlrtb\clftsWidth3\clwWidth2430\clshdrawnil
\cellx7470\pard \ltrpar\qj
\li0\ri0\sl480\slmult1\nowidctlpar\intbl\pvpara\phpg\posx2241\posy228\dxfrtext180\d
frmtxtx180\dfrmtxty0\wraparound\faauto\rin0\lin0\pararsid11039682 {
Options\cell Respondents\cell Percentage\cell }\pard \ltrpar\ql
ustright\rin0\lin0 {
\trowd \irow0\irowband0\ltrrow\ts11\trgaph108\trrh383\trleft-
\
tpvpara\tphpg\tposx2241\tposy228\tdfrmtxtLeft180\tdfrmtxtRight180\trftsWidth3\trwWi
dth7578\trftsWidthB3\trftsWidthA3\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddf
b3\trpaddfr3\tbllkhdrrows\tbllkhdrcols\tblind0\tblindtype3 \clvertalt\clbrdrt
\
frmtxtx180\dfrmtxty0\wraparound\faauto\rin0\lin0\pararsid11039682 {\rtlch\fcs1
\af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid11039682\charrsid10636471 Strongly Agreed\cell 8\cell
\
\
\af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid11039682\charrsid10636471 Agreed\cell 30\cell
\
\
\af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid11039682\charrsid10636471 Undecided\cell 1\cell
\
\
\af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid11039682\charrsid10636471 Disagreed\cell 4\cell
\
\
\af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid11039682\charrsid10636471 Strongly disagreed\cell
2\cell 4.4\cell }\pard \ltrpar\ql
\
\ltrpar\qj
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid11039682\charrsid10636471 Total\cell
\
\cltxlrtb\clftsWidth3\clwWidth2430\clshdrawnil \cellx7470\row }\pard \ltrpar\qj
\par
\par
\par
\par
\par
\par
\par
\par
\f39\fs24\insrsid5574228\charrsid10636471 \tab QUESTION 2 (SECTION B)
Efficient working capital ensures the availability of funds for investment.
\par
\par
\par
\par
\par }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid16075792 Table }
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8735300 4.}{\rtlch\fcs1
\ltrch\fcs0
\tpvpara\tphmrg\tposxc\tposy293\tdfrmtxtLeft180\tdfrmtxtRight180\trftsWidth1\trftsW
trpaddfr3\tbllkhdrrows\tbllkhdrcols\tblind0\tblindtype3 \clvertalt
\clbrdrt\brdrs\brdrw10\brdrcf1 \clbrdrl\brdrs\brdrw10\brdrcf1
\cellx3546\clvertalt\clbrdrt\brdrs\brdrw10\brdrcf1 \clbrdrl\brdrs\brdrw10\brdrcf1
\li0\ri0\sl480\slmult1\nowidctlpar\intbl\pvpara\phmrg\posxc\posy293\dxfrtext180\dfr
mtxtx180\dfrmtxty0\wraparound\faauto\rin0\lin0\pararsid7226494 {\rtlch\fcs1
\af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid7226494\charrsid10636471 Options\cell Respondents\cell
Percentage\cell }\pard \ltrpar\ql
ustright\rin0\lin0 {\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid7226494\charrsid10636471 \trowd
trpaddfr3\tbllkhdrrows\tbllkhdrcols
\tblind0\tblindtype3 \clvertalt\clbrdrt\brdrs\brdrw10\brdrcf1
\cellx7816\row \ltrrow}\pard \ltrpar\qj \li0\ri0\sl480\slmult1
\
nowidctlpar\intbl\pvpara\phmrg\posxc\posy293\dxfrtext180\dfrmtxtx180\dfrmtxty0\wrap
around\faauto\rin0\lin0\pararsid7226494 {\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid7226494\charrsid10636471 Strongly agreed\cell 14\cell 31.1\cell
}\pard \ltrpar\ql
\f39\fs24\insrsid7226494\charrsid10636471 \trowd \irow1\irowband1\ltrrow
\ts11\trgaph108\trrh369\trleft-108\trbrdrt\brdrs\brdrw10\brdrcf1
\
tpvpara\tphmrg\tposxc\tposy293\tdfrmtxtLeft180\tdfrmtxtRight180\trftsWidth1\trftsWi
dthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\t
rpaddfr3\tbllkhdrrows\tbllkhdrcols\tblind0\tblindtype3 \clvertalt\clbrdrt
\
\af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid7226494\charrsid10636471 Agreed\cell 31\cell 68.9\cell
}\pard \ltrpar\ql
\
\f39\fs24\insrsid7226494\charrsid10636471 Undecided\cell -\cell -\cell }\pard
\ltrpar
\ql
\irow3\irowband3\ltrrow\ts11\trgaph108\trrh399\trleft-108
\
\ltrpar\qj
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid7226494\charrsid10636471 Disagreed\cell
-\cell -\cell }\pard \ltrpar\ql
\
\f39\fs24\insrsid7226494\charrsid10636471 Strongly disagreed\cell -\cell
-\cell }\pard \ltrpar
\ql
\irow5\irowband5\ltrrow\ts11\trgaph108\trrh399\trleft-108
\
\ltrpar\qj
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid7226494\charrsid10636471 Total \cell
\cellx7816\row }\pard \ltrpar\qj
\par
\par
\par
\par
\par
\par
\par
\par
\f39\fs24\insrsid5574228\charrsid10636471 \tab QUESTION 3 (SECTION B)
\li720\ri0\sl480\slmult1\nowidctlpar\tx630\tx810\wrapdefault\faauto\rin0\lin720\ita
p0\pararsid14449553 {\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid5574228\charrsid10636471 Working capital control has }{\rtlch\fcs1
\af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid13391574\charrsid10636471 an impact}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid5574228\charrsid10636471 on the financial
performance of \tab companies.
\ltrch\fcs0
\f39\fs24\insrsid5574228\charrsid10636471 .5
\par \ltrrow}\trowd
\cellx8949
\pard \ltrpar\qj
\ql
\
\cellx8949\row
\ltrrow}\pard \ltrpar\qj
Strongly agreed\cell 17\cell 37.8\cell }\pard \ltrpar
\ql
\
\cellx8949\row
Agreed\cell 27\cell 60.0\cell }\pard \ltrpar
\ql
\
\cellx8949\row
Undecided\cell 1\cell 2.2\cell }\pard \ltrpar
\ql
\
\cellx8949\row
\ltrrow}\trowd
\cellx8949
\pard \ltrpar\qj
Disagreed\cell -\cell -\cell }\pard \ltrpar
\ql
\
\cellx8949\row
\ltrrow}\trowd
\cellx8949
\pard \ltrpar\qj
Strongly disagreed\cell -\cell -\cell }\pard \ltrpar
\ql
\
\cellx8949\row
\ql
\
\cellx8949\row
}\pard \ltrpar\qj
\par \tab QUESTION 4 (SECTION B)
There is an optimal level of working capital that should be carried out any time.
\ltrch\fcs0
\f39\fs24\insrsid5574228\charrsid10636471 6
\par \ltrrow}\trowd
\cellx9057
\pard \ltrpar\qj
\ql
\
\cellx9057\row
Strongly agree\cell 8\cell 17.8\cell }\pard \ltrpar
\ql
\
\cellx9057\row
Agree\cell 37\cell 82.2\cell }\pard \ltrpar
\ql
\
\cellx9057\row
\ltrrow}\trowd
\cellx9057
\pard \ltrpar\qj
Undecided\cell -\cell -\cell }\pard \ltrpar
\ql
\
\cellx9057\row
\ltrrow}\trowd
\cellx9057
\pard \ltrpar\qj
Disagree\cell -\cell -\cell }\pard \ltrpar
\ql
\
\cellx9057\row
\ltrrow}\trowd
\cellx9057
\pard \ltrpar\qj
Strongly disagree\cell -\cell -\cell }\pard \ltrpar
\ql
\
\cellx9057\row
\ql
\
\cellx9057\row
}\pard \ltrpar\qj
The optimal level of working capital increases the profit of the companies.
\ltrch\fcs0
\par \ltrrow}\trowd \irow0\irowband0\ltrrow\ts11\trqc\trgaph108\trrh350\trleft-
\cellx7870
\pard \ltrpar\qj
\ql
\irow0\irowband0\ltrrow\ts11\trqc\trgaph108\trrh350\trleft-108
\
\cellx7870\row
\ql
\
\cellx7870\row
\ql
\
\cellx7870\row
\ltrrow}\trowd \irow3\irowband3\ltrrow\ts11\trqc\trgaph108\trrh384\trleft-
\cellx7870
\pard \ltrpar\qj
\ql
\
\cellx7870\row
\cellx7870
\pard \ltrpar\qj
\ql
\
\cellx7870\row
\cellx7870
\pard \ltrpar\qj
\ql
\
\cellx7870\row
\ql
\ts11\trqc\trgaph108\trrh384\trleft-108\trbrdrt\brdrs\brdrw10\brdrcf1
\
\cellx7870\row
}\pard \ltrpar\qj
\par \tab QUESTION 6(SECTION B)
The amount of working capital to carry should be the minimum consistent}
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid13391574 with the
organization without }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
interruption.
\cellx7870
\pard \ltrpar\qj
\ql
\
\cellx7870\row
\ql
\
\cellx7870\row
\ql
\
\cellx7870\row
\cellx7870
\pard \ltrpar\qj
\ql
\
\cellx7870\row
\cellx7870
\pard \ltrpar\qj
Disagree\cell 8\cell 17.8\cell }\pard \ltrpar
\ql
\
\cellx7870\row
\cellx7870
\pard \ltrpar\qj
Strongly disagree\cell 3\cell 6.7\cell }\pard \ltrpar
\ql
\
\cellx7870\row
\ql
\
\cellx7870\row
}\pard \ltrpar\qj
The method of financing working capital has an effect on the company's profits.
\cellx7870
\pard \ltrpar\qj
\ql
\
\cellx7870\row
\ql
\
\cellx7870\row
\ql
\
\cellx7870\row
\cellx7870
\pard \ltrpar\qj
Undecided\cell 9\cell 20\cell }\pard \ltrpar
\ql
\
\cellx7870\row
\cellx7870
\pard \ltrpar\qj
\ql
\
\cellx7870\row
\cellx7870
\pard \ltrpar\qj
\ql
\
\cellx7870\row
\ql
\
\cellx7870\row
}\pard \ltrpar\qj
\par \tab QUESTION 8 (}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid2649713\charrsid10636471 SECTION B}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid5574228\charrsid10636471 )
\f39\fs24\insrsid5574228\charrsid10636471 Working capital should be financed using
only short-term financing.

\par \tab Table }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8735300 4.}
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid16075792 1}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid5574228\charrsid10636471 .}{\rtlch\fcs1
\af39\afs24
\cellx7870
\pard \ltrpar\qj
\ql
\
\cellx7870\row
\ql
\
\cellx7870\row
\ql
\
\cellx7870\row
\cellx7870
\pard \ltrpar\qj
\ql
\
\cellx7870\row
\cellx7870
\pard \ltrpar\qj
Disagree\cell 4\cell 8.9\cell }\pard \ltrpar
\ql
\
\cellx7870\row
\cellx7870
\pard \ltrpar\qj
\ql
\
\cellx7870\row
\ql
\
\cellx7870\row
}\pard \ltrpar\qj
Enlightenment should be provided on the methods of working capital control.
\par }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid16075792 \tab Table }
\ltrch\fcs0
\f39\fs24\insrsid5574228\charrsid10636471 .1}{\rtlch\fcs1 \af39\afs24
\cellx7841
\pard \ltrpar\qj
\ql
\
\cellx7841\row
Strongly agree\cell 45\cell 100\cell }\pard \ltrpar
\ql
\
\cellx7841\row
Agree\cell -\cell -\cell }\pard \ltrpar
\ql
\
\cellx7841\row
\cellx7841
\pard \ltrpar\qj
\ql
\
\cellx7841\row
\cellx7841
\pard \ltrpar\qj
\ql
\
\cellx7841\row
\cellx7841
\pard \ltrpar\qj
\ql
\
\cellx7841\row
\ql
\
\cellx7841\row
}\pard \ltrpar\qj
\par \tab }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid6901086
\f39\fs24\insrsid5574228\charrsid10636471 No options were provided for the question
below;

\f39\fs24\insrsid5574228\charrsid10636471 QUESTION 10
\f39\fs24\insrsid5574228\charrsid10636471 What impact dose }{\rtlch\fcs1
\f39\fs24\insrsid10818502\charrsid10636471 increased in working capitals}
have on profitability? }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\par
All 45 respondents opinionated that an increase in working capital above the
optimal level would have a }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\ltrch\fcs0
\f39\fs24\insrsid5574228\charrsid10636471 effect on profitability. But on the
occasion that working capital was lower than the optimal }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid876910\charrsid10636471 level;}
\ltrch\fcs0 \f39\fs24\insrsid9650145 an increase will boost profit t}
remendously}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\par \tab }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid876910 QUEST}
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid1062240 ION }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid5574228\charrsid10636471 11.
\f39\fs24\insrsid5574228\charrsid10636471 What impact dose the }{\rtlch\fcs1
\f39\fs24\insrsid5274890\charrsid10636471 methods}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid5574228\charrsid10636471 of working capita financing
have on}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid5274890
profitability? 35 respondents r}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid5574228\charrsid10636471 epresenting 77 .8% stated that the method
of working capital financi}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
ng should have a positive or a n}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid5843074\charrsid10636471 egative}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid5574228\charrsid10636471 on profitability depending
on the following:
\f39\fs24\insrsid5574228\charrsid10636471 \tab (a) Relative stability of the cost
of borrowing.
\par \tab (b) The use of the funds needed.
\par
10 respondents representing 22.8% was not contain if the method of financing
working capital have any impact on profitability.
\par \tab Question 12
\par \tab What are suggested ways for improving working capital }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid13193636\charrsid10636471 control?}
\f39\fs24\insrsid5574228\charrsid10636471 All 45 }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid13193636\charrsid10636471 respondents}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid5574228\charrsid10636471 suggest various ways for
improving working capital control. }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid13193636\charrsid10636471 Some}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid5574228\charrsid10636471 of these are;
rsid13193636 {\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid13193636 (a)\tab
Ther}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid5574228\charrsid10636471 e should be a formal training on
working }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid13193636 capital }
control
for staff involved in }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid13193636 department where }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
activities relating to working capital or its components are dealt with.
rsid3146901 {\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid3146901 (b)\tab }
\f39\fs24\insrsid5574228\charrsid10636471 An optimal level of working capital to be
carried of any point in time should be determined for any firm or company.
rsid16200753 {\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid3146901
(c)\tab }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid3146901\charrsid10636471 Financial}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid5574228\charrsid10636471 control/
management strategies should be formulated which is in agreement with the overall
objective of working capital control.
\li0\ri0\sl480\slmult1\nowidctlpar\tx720\tx810\wrapdefault\faauto\rin0\lin0\itap0\p
ararsid666925 {\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid666925
4.2\tab }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid5574228\charrsid10636471 DATA ANALYSIS
987600 {\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid16075792 Table }
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid5574228\charrsid10636471 .1 shows that 8
responde}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid4678530
nts to representing 17.8% said }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid7623421 that they }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid5574228\charrsid10636471 know}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
what}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid5574228\charrsid10636471 working capital control}{\rtlch\fcs1
entails, while 37 respondents represent 82.2% said they do not know what working
capital entails.}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
2276077 {\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid16075792 Table }
2 shows that 3 respondents representing 6.7% said they had formal in/service
training up working capital control in their company while 92 respondents
representing 93.3% said they had no training.
\f39\fs24\insrsid5574228\charrsid10636471 Table}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid5987600 4.}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid16075792 1.3}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
shows that 8 respondents}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12415878 representing }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid5574228\charrsid10636471 17 .8% of the total}{\rtlch\fcs1
\f39\fs24\insrsid14696811 population strongly agreed 30 }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid5574228\charrsid10636471 respondents
representing 66.7%. Agreed I respondent representing 2.2% was }{\rtlch\fcs1
\f39\fs24\insrsid14696811 \'93}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid5574228\charrsid10636471 undecided}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid14696811 \'94}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid5574228\charrsid10636471 4 respondents representing 8.9%
"Disagree", while 2 respondent representing 4.4% "strongly disagree" that there is
general lack of awareness}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
of the working capital control.}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid5574228\charrsid10636471 This }{\rtlch\fcs1 \af39\afs24
Table 4.1.}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid5987600\charrsid10636471 4}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid5574228\charrsid10636471 shows}{\rtlch\fcs1
\ltrch\fcs0 \f39\fs24\insrsid5574228\charrsid10636471 14 respondent representing
31.1% of the total }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid6058017
populations
\'93strongly}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid6058017\charrsid10636471 agree}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid6058017 \'94}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid5574228\charrsid10636471 while 37
\tab respondents representing 68.9% "Agree" that efficient working capital control
ensures the availability of funds for investment.
\tab Table 4.1.}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
shows 17 respondents representing 37.8% of the total population "strongly agree" 27
respondents representing 60% of the population "Agree" while I respondent was not
decided whether working capital control as an impact on the }{\rtlch\fcs1
\af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid161706\charrsid10636471 financial}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid7808067\charrsid10636471 performance}
{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid5574228\charrsid10636471 of companies.
Table }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid1658594 4.}
\f39\fs24\insrsid5574228\charrsid10636471 shows 8 respondents representing 17.8%
"strongly agree". While 37 respondents representing }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid15023221 82.2% }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid5574228\charrsid10636471 "Agree" }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid1334310 t}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid5574228\charrsid10636471 hat there is an optimal level of working
capital that should be carried at the time.
71 {\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid16075792 \tab }

\f39\fs24\insrsid5574228\charrsid10636471 shows 13 }{
\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid10242772 respondents
representing 28.9% \'93}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid5574228\charrsid10636471 Strongly agree}{\rtlch\fcs1
\'94}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid10242772\charrsid10636471 while}{\rtlch\fcs1 \af39\afs24
\f39\fs24\insrsid4743094 }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid10242772\charrsid10636471 respondents}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid5574228\charrsid10636471 representing
71.1% "Agree" that the optimal level of working capital increases the profit of
companies}{
\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid10242772 .}{\rtlch\fcs1
\tab
shows that 5 respondents representing 11.1% "Strongly agree" 2}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid292972 9 respondents representing 6.7% }
"Strongly agree" that the amount}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid5574228\charrsid10636471 of working capital to carr}
\f39\fs24\insrsid292972 y}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid5574228\charrsid10636471 should be the }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid292972 minimum }{\rtlch\fcs1
\f39\fs24\insrsid5574228\charrsid10636471 consistent with \tab running the
organization/company without interruption.

\f39\fs24\insrsid6054678\charrsid10636471 9 }{\rtlch\fcs1 \af39\afs24
shows 15 respondents representing 33.3% "Strongly Agree"}{\rtlch\fcs1
\ltrch\fcs0 \f39\fs24\insrsid5574228\charrsid10636471 21 respondent representing }
\ltrch\fcs0 \f39\fs24\insrsid7553988 46.7% \'93Agree\'94}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8333328 while 9 respondent representing }
20% were undecided if the method of financing working }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid8333328\charrsid10636471 capital}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8333328 has an ef}{\rtlch\fcs1
\f39\fs24\insrsid5574228\charrsid10636471 fect on the organization/company's
profit.
\f39\fs24\insrsid16075792 \tab }{
Table 4.1.1}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
shows 20 respondents representing 44.4% "Strongly agree" 21 respondent representing
46.7% "Agree" }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid6765142\charrsid10636471 while}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid5574228\charrsid10636471 4 respondent representing 8.9%
"Disagree" that working capital should be financed using only short-term financing.

\f39\fs24\insrsid5574228\charrsid10636471 45 respondent}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid2888605 in Table 4.1.}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid5574228\charrsid10636471 representing 100% "Strongly agree}
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid10187212 \'94}{\rtlch\fcs1
that enlightenment should be provided in the method}{\rtlch\fcs1 \af39\afs24
\f39\fs24\insrsid5574228\charrsid10636471 of}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid5574228\charrsid10636471 working capital}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid10187212 control}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\par
\par
\par
\par
\par
CHAPTER FIVE
\f39\fs24\insrsid13456942\charrsid10636471 SUMMARY}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid16075792 , }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid13456942\charrsid10636471 CONCLUTION AND RECOMMENDATION
\f39\fs24\insrsid13456942\charrsid10636471 5.1\tab SYNOPSIS
The work aimed at studying working capital and its impact on the financi}
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8526422 al}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid13456942\charrsid10636471 performance of
companies in Nigeria}
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8526422 , using NIIT Warri as
a case study.}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
Chapter one of this study is gives an insight of the topic in regards to what the
study is about, purpose of carrying out the study, the objectives of the study, the
problems the}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid13456942\charrsid10636471 research work hopes to solve etc under
the following heading's background }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid2912099\charrsid10636471 of the}
study}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid2912099 ,}
statement of research problems,}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid13456942\charrsid10636471 aims/objective of the study}{\rtlch\fcs1
\f39\fs24\insrsid13456942\charrsid10636471 significance of the study, scope of the
study, definitions of terms.
3515895 {\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid2912099 Chapter two
of the }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid13456942\charrsid10636471 research work covers the reviews of the
literature.}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid2912099 }
\tab
This reviews covers working capital, types,}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
policy, cycle components of working capital and its control, cash inventory (stock)
debtors (account receivables) working capital financing accrued, account payables
(trade creditors ) short term bank loans/overdraft and }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid13515895\charrsid10636471 commercial}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid13456942\charrsid10636471 papers}
\f39\fs24\insrsid13456942\charrsid10636471 Chapter three deals with the methodology
adopt}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid16461515 ed}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid13456942\charrsid10636471 in carr}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid16461515 y}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid13456942\charrsid10636471 ing out the study.}{\rtlch\fcs1
\ltrch\fcs0 \f39\fs24\insrsid13456942\charrsid10636471 It includes research design
adopted,}{
\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid16461515 }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid13456942\charrsid10636471 the type and
\tab
\f39\fs24\insrsid16461515\charrsid10636471 Source}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid13456942\charrsid10636471 of data, instruments of data
collection, actual fieldwork,}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
method of data presentation and methods of data analysis.}{\rtlch\fcs1
\par Chapter four shows the analysis of data collected or obtained for the purpose
of the work. From the data analysis, it was discovered that many benefits are
obtained through}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid160783
encouragement and }{
\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12466663 improv}
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid160783 ement}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12466663 of working capital control }
\f39\fs24\insrsid13456942\charrsid10636471 Chapter five gives a summary of
findings}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid9197618 , conclusion}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid13456942\charrsid10636471 and recommendations}
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9197618 with suggestions for
further studies}{
\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid13456942\charrsid10636471 .
\f39\fs24\insrsid13456942\charrsid10636471 5.2\tab SUMMARY OF FINDINGS
It can therefore be said from the research work that working capital control plays
and important role in the }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\ltrch\fcs0
\f39\fs24\insrsid13456942\charrsid10636471 performance of companies.
\f39\fs24\insrsid13456942\charrsid10636471 Since profitability is usually the }
\ltrch\fcs0 \f39\fs24\insrsid8718375\charrsid10636471 yardstick}{\rtlch\fcs1
for measuring companies performance. It is therefore important for the proper
control and management of all such thing that has }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid6488974\charrsid10636471 an impact}{\rtlch\fcs1
\af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid13456942\charrsid10636471 on the profitability. It
would be worth while for all managers of \tab any of the companies of working
capital to determine and optimal level of such component that shift his }
{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid15012649\charrsid10636471 company (}
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid13456942\charrsid10636471 i}
\af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid13456942\charrsid10636471 e.}{\rtlch\fcs1
\ltrch\fcs0 \f39\fs24\insrsid13456942\charrsid10636471 the level that is just
enough}{\rtlch\fcs1
\ltrch\fcs0 \f39\fs24\insrsid13456942\charrsid10636471 to minimize profits without
tying down investable funds }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid15012649\charrsid10636471 in working}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid13456942\charrsid10636471 capital components.
\f39\fs24\insrsid13456942\charrsid10636471 The}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid6309594 y
will be looking up funds that would have been profitability invested in excess
working capital thereby having a }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\ltrch\fcs0 \f39\fs24\insrsid13456942\charrsid10636471 impact on }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid6309594\charrsid10636471 profitability}
{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid13456942\charrsid10636471 . On the other
hand, if }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid6309594 a}
level below the optimal level is carried, this wil}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid6309594 l}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid13456942\charrsid10636471 also have a }{\rtlch\fcs1
effect on the profitability because they will not be able to produce to a level to
meet customers demand make enough sales to ensure to profitability.
Most firms or companies do not employ working capital control techniques.}
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid13456942\charrsid10636471 A}
\ltrch\fcs0 \f39\fs24\insrsid5592995 l}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid13456942\charrsid10636471 though, some }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid5592995\charrsid10636471 unconsciously}
\ltrch\fcs0 \f39\fs24\insrsid13456942\charrsid10636471 engage in the control of
the components.}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid1145854 They
do so by r}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid13456942\charrsid10636471 ule of }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid1145854\charrsid10636471 thumb:}{\rtlch\fcs1
this making it a common practice to increase or reduce their holdings of working
capital arbitrarily.
\f39\fs24\insrsid13456942\charrsid10636471 If they do employ or could employ }
\ltrch\fcs0 \f39\fs24\insrsid6382514\charrsid10636471 standard}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid13456942\charrsid10636471 working capital
control techniques, they will }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
be }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid13456942\charrsid10636471
able to achieve a level of raw materials, }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid6382514\charrsid10636471 finished}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid13456942\charrsid10636471 goods, }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid6382514 cash, and}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid13456942\charrsid10636471 debtors that will adequately support,
ensure and }
enhance}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid13456942\charrsid10636471 profitability.
\par {\listtext\pard\plain\ltrpar \rtlch\fcs1 \af0 \ltrch\fcs0 \f39\insrsid10759687
\hich\af39\dbch\af0\loch\f39 5.3\tab}}\pard \ltrpar\qj \fi-
720\li720\ri0\sl480\slmult1\nowidctlpar
\jclisttab\tx720\wrapdefault\faauto\ls4\ilvl1\rin0\lin720\itap0\pararsid10759687
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid10759687 CONCLUSION
Based on this research carried out the researcher have carefully collected data
from management of the companies, the workers and customers who are made up of
professionals and students to enable him draw conclusion.}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\par These data made up of questionnaires were presented and analyzed from where
useful information based on the fact that the data were collected. It is therefore
pertinent to say:
\par
\par That working capital has a positive, role to play in the financial performance
of companies in Nigeria.
\par
\par }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid15996275 That working
capital has a very strong impact on the financial performance of companies in
Nigeria.
\par
\par That working capital increases the profit of companies in Nigeria}{\rtlch\fcs1
\par
\par That if working capital can be used to finance a company in all level, it will
in no doubt lead to improvement and allow companies to participate in most of the
dealings as carried out by the commercial banks. }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\par }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid1795967 5.4}
\tab RECOMMENDATION
\par \tab It is therefore recommended that
\f39\fs24\insrsid13456942\charrsid10636471 1.\tab A formal trainin}{\rtlch\fcs1
\af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid15678004 g should be given to staffs invol}
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid15678004\charrsid10636471 v}
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid15678004 ed}{\rtlch\fcs1
\af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid13456942\charrsid10636471 in departments where
activities }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid15678004\charrsid10636471 relating}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid13456942\charrsid10636471 to working capital components are deal}
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid4143056 t with to abreast }
them to the working capital control and its impact on }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid4143056 the }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\ltrch\fcs0
\f39\fs24\insrsid13456942\charrsid10636471 }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid4143056\charrsid10636471 performance}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid13456942\charrsid10636471 of companies.
An optional level of working capital to be carried at any point in time should be
determined for any firm }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid6170599\charrsid10636471 or}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid13456942\charrsid10636471 company.
A consistent method of financing working capital should be adhered to since the
methods would have taken into consideration }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid3371309\charrsid10636471 stability}{\rtlch\fcs1
\f39\fs24\insrsid13456942\charrsid10636471 in cost of borrowing}{\rtlch\fcs1
\ltrch\fcs0 \f39\fs24\insrsid13456942\charrsid10636471 the use of the funds }
{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid3371309\charrsid10636471 needed}
over time.
\par {\listtext\pard\plain\ltrpar \rtlch\fcs1 \af0 \ltrch\fcs0
\f39\insrsid13456942\charrsid10636471 \hich\af39\dbch\af0\loch\f39 4.\tab}}\pard
\ltrpar\qj \fi-360\li720\ri0\sl480\slmult1\nowidctlpar
\jclisttab\tx720\wrapdefault\faauto\ls5\rin0\lin720\itap0\pararsid11092016
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid13456942\charrsid10636471 All
components of working capital should be managed simultaneously to a level that is
optima}{
\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid11092016 l as determined by
managers. }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid11866312
\li0\ri0\sl480\slmult1\nowidctlpar\tx720\tx810\wrapdefault\faauto\rin0\lin0\itap0\p
ararsid11866312 {\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid11866312 5.5
}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8406780
SUGGESTION FOR FURTHER STUDIES}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
The fact that the researcher have carried out a comprehensive study, on working
capital control and its impact on the financial performance of companies in Nigeria
in NIIT Warri is not an indication that further studies cannot be conducted on the
topic or
related areas.
864925 {\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8406780 However, the }
researcher wishes}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8406780 to
make the following suggestion of further studies by interested persons.
\par {\listtext\pard\plain\ltrpar \rtlch\fcs1 \af0 \ltrch\fcs0
\f39\insrsid8406780 \hich\af39\dbch\af0\loch\f39 1.\tab}}\pard \ltrpar\qj \fi-
720\li720\ri0\sl480\slmult1\nowidctlpar\jclisttab\tx720\wrapdefault\faauto\ls3\rin0
\lin720\itap0\pararsid1864925 {
\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8406780 A comprehensive study
on th}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid1864925 e same study in
any other local }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid8406780
government area.
\hich\af39\dbch\af0\loch\f39 2.\tab}}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12077232 Ways}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
of improving working capital }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12077232 on the financial performance of companies in the public
sector.
\hich\af39\dbch\af0\loch\f39 3.\tab}}\pard \ltrpar\qj \fi-
720\li720\ri0\sl480\slmult1\nowidctlpar\tx630\tx720\wrapdefault\faauto\ls3\rin0\lin
720\itap0\pararsid1864925 {
\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12077232 }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid14499769 Factor militating against }
working capital improvement in the Nigeria economy today.}{\rtlch\fcs1
\par
BIBLIOGRAHY
\f39\fs24\insrsid10754700\charrsid10636471 Brigham, E.}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid10754700\charrsid10636471 F., and Joel E.H. (1996)}
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid14043502 ,}{\rtlch\fcs1
\ltrch\fcs0 \f39\fs24\insrsid14043502\charrsid10636471 Fundamentals}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid10754700\charrsid10636471 of }
\ltrch\fcs0 \f39\fs24\insrsid14043502\charrsid10636471 Financial}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid10754700\charrsid10636471 Management,
Dryden }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
Value Press}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid10754700\charrsid10636471 Florida, U.S.A.

George, }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid10754700\charrsid10636471 E.P. (1996)}{\rtlch\fcs1 \af39\afs24
\f39\fs24\insrsid14043502\charrsid10636471 Essentials}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid10754700\charrsid10636471 of }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid14043502\charrsid10636471 Financial}
\ltrch\fcs0 \f39\fs24\insrsid10754700\charrsid10636471 Management, Harper Collins
College Publishers, New York U.S.A.

\f39\fs24\insrsid10754700\charrsid10636471 Hampton, J.J. (1975)}{\rtlch\fcs1
\af39\afs24
\f39\fs24\insrsid10754700\charrsid10636471 Decision Marking Concepts, Problems and
Cses}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid16327896\charrsid10636471 , 4th}{\rtlch\fcs1 \af39\afs24
edition practice hall Int. New Jersey, U.S.A.

\f39\fs24\insrsid10754700\charrsid10636471 Morland, I. (1996) Budgeting for non }
{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9727567\charrsid10636471 Financial}
Manager, Pitman Publication London.

\f39\fs24\insrsid10754700\charrsid10636471 N.G.C. Nigeria German Chemical plc
(2005)}{\rtlch\fcs1
\ltrch\fcs0 \f39\fs24\insrsid10754700\charrsid10636471 }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9727567\charrsid10636471 Background of}
\ltrch\fcs0 \f39\fs24\insrsid10754700\charrsid10636471 NGC plc
(http:www.ngcplc.com/ns }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid9727567\charrsid10636471 about}{\rtlch\fcs1 \af39\afs24
hfm background) April. 2005\tab \tab
\tab
\f39\fs24\insrsid10754700\charrsid10636471 Omuya J.O (1983)}{\rtlch\fcs1
\f39\fs24\insrsid10754700\charrsid10636471 Frankwood's Business Accounting, West
Africa Edition Longman Group, London.

\f39\fs24\insrsid10754700\charrsid10636471 Osazerbaru, H.O}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid4604160\charrsid10636471 . (}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid10754700\charrsid10636471 2003): Principle of Finance
Statmos Publishers, Anofil Centre, Sango Ibadan

\f39\fs24\insrsid10754700\charrsid10636471 Padey, I.M. (1993)}{\rtlch\fcs1
\f39\fs24\insrsid10754700\charrsid10636471 Management 6th edition Vikas publishing
House port Ltd. New Delhi- India

\f39\fs24\insrsid10754700\charrsid10636471 Richard, A.R. }{\rtlch\fcs1
\f39\fs24\insrsid13401238\charrsid10636471 Steward C.M}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid10754700\charrsid10636471 . (1996)}{\rtlch\fcs1
\ltrch\fcs0
\f39\fs24\insrsid10754700\charrsid10636471 Principle of }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid13401238\charrsid10636471 Corporate}
Finance McGrew Hill Company }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid13401238\charrsid10636471 Line, New}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid10754700\charrsid10636471 York, U.S.A.

arsid10495244 {\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid10495244 Rose
S.A. et}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid10754700\charrsid10636471 al}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid10495244\charrsid10636471 . (}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid10754700\charrsid10636471 2002)}{\rtlch\fcs1
\ltrch\fcs0 \f39\fs24\insrsid10495244\charrsid10636471 Corporate}{\rtlch\fcs1
\f39\fs24\insrsid10754700\charrsid10636471 Finance 6th Edition McGraw Hill Irrin
New York.

\f39\fs24\insrsid10754700\charrsid10636471 Van Horne J.C. (1977) }{\rtlch\fcs1
\af39\afs24
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid10754700\charrsid10636471 Management and
policy, 4th edition Practice Hall Mc New Jersey, U.S.A.

Weston J.F. Copoeland, T.E (1988) Managerail Finance 2nd edittion Cassel .Ed Ltd.
London.
\f39\fs24\insrsid10754700\charrsid10636471 Women Economic Self }{\rtlch\fcs1
\af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid3545267\charrsid10636471 Sufficient}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid10754700\charrsid10636471 Team (2004) How
does one practice good cash management (http:www.englightenmentor) \tab
\tab }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid3545267
\tab }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid10754700\charrsid10636471 Finance.
\par
\par
\par
\par
\par
\par
\par
\par
\par
\par
\par
\par
\li0\ri0\nowidctlpar\wrapdefault\faauto\rin0\lin0\itap0\pararsid9857428
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid7552366 APPENDIX I
\par
\fi720\li4320\ri0\nowidctlpar\wrapdefault\faauto\rin0\lin4320\itap0\pararsid9857428
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid7552366 Accountancy,
\par School of }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9857428
Financial Studies}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid7552366 ,
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid7552366 Akwa Ibom State
Polytechnic,
\fi720\li4320\ri0\nowidctlpar\wrapdefault\faauto\rin0\lin4320\itap0\pararsid9857428
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid12129275 Ikot Osurua, Ikot-
Ekpene.}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid7552366
\par Akwa Ibom State.
\par 6}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\super\insrsid7552366\charrsid7552366 th}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid7552366 October, 2009.
\par Dear Respondent,
\par
QUESTIONNAIRE ADMINISTRATION
\par }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9857428 I the student
of the above named institution, as a requirement for the award of Higher National
Diploma in Accounting wish to solicit for your
assistant in answering the following questions which will help me in my research
work.}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid7552366
\par In line with the above, I humbly request you to corporate with me my providing
the required information to the questions asked.
\par
\par All information supplied will be treated in strict confidence and used purely
to academic exercise.
\par
\par Thanks.
\par
\par Yours Faithfully,
\par
\par
\par
Ibrethi Ufuoma Endurance
\par }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9857428 Researcher.
\par
\par
89 {\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid1123489 APPENDIX II}
QUESTIONNAIRES
25 {\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid6424125 SECTION A}
Please tick or fill the appropriate.
\par 1.\tab
Name-------------------------------------------------------------------------------
-------------------
{\shp{\*\shpinst\shpleft4280\shptop90\shpright4581\shpbottom346\shpfhdr0\shpbxcolum
n\shpbxignore\shpbypara\shpbyignore\shpwr3\shpwrk0\shpfblwtxt0\shpz1\shplid1036
{\sp{\sn shapeType}{\sv 2}}{\sp{\sn fFlipH}{\sv 0}}{\sp{\sn fFlipV}{\sv 0}}{\sp{\sn
adjustValue}{\sv 0}}{\sp{\sn dhgt}{\sv 251627008}}{\sp{\sn fLayoutInCell}{\sv 1}}
{\shprslt{\*\do\dobxcolumn\dobypara\dodhgt8193\dppolygon\dppolycount8\dpptx0\dppty0
\dpptx0\dppty0\dpptx0\dppty256\dpptx0\dppty256\dpptx354\dppty256\dpptx354\dppty256\
dpptx354\dppty0
\
dpptx354\dppty0\dpx4280\dpy90\dpxsize301\dpysize256\dpfillfgcr255\dpfillfgcg255\dpf
illfgcb255\dpfillbgcr255\dpfillbgcg255\dpfillbgcb255\dpfillpat1\dplinew15\dplinecor
0\dplinecog0\dplinecob0}}}
n\shpbxignore\shpbypara\shpbyignore\shpwr3\shpwrk0\shpfblwtxt0\shpz0\shplid1037{\sp
{\sn shapeType}{\sv 2}}{\sp{\sn fFlipH}{\sv 0}}{\sp{\sn fFlipV}{\sv 0}}
{\sp{\sn adjustValue}{\sv 0}}{\sp{\sn dhgt}{\sv 251625984}}{\sp{\sn fLayoutInCell}
{\sv 1}}{\sp{\sn fPseudoInline}{\sv 0}}{\sp{\sn fLayoutInCell}{\sv 1}}}
\dpptx0\dppty0
\
dpptx0\dppty256\dpptx0\dppty256\dpptx354\dppty256\dpptx354\dppty256\dpptx354\dppty0
\dpptx354\dppty0\dpx2120\dpy90\dpxsize301\dpysize256
\
dpfillfgcr255\dpfillfgcg255\dpfillfgcb255\dpfillbgcr255\dpfillbgcg255\dpfillbgcb255
\dpfillpat1\dplinew15\dplinecor0\dplinecog0\dplinecob0}}}}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid16075792\charrsid10636471 2.\tab Sex: Male
\tab Female
\tab
dpptx354\dppty0
\
\dpptx0\dppty0
\
\
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid16075792\charrsid10636471 3.\tab
Age: 30 years and below Above 30 years
dpptx354\dppty0
\
\dpptx0\dppty0
\
\
Marital Status: Single Married
id16075792 {\rtlch\fcs1 \af37 \ltrch\fcs0
{\shp{\*\shpinst\shpleft5998\shptop760\shpright6299\shpbottom1016\shpfhdr0\shpbxcol
umn\shpbxignore\shpbypara\shpbyignore\shpwr3\shpwrk0\shpfblwtxt0\shpz10\shplid1042{
\sp{\sn shapeType}{\sv 2}}{\sp{\sn fFlipH}{\sv 0}}{\sp{\sn fFlipV}{\sv 0}}
\dpptx0\dppty0
\
\
\dpfillpat1\dplinew15\dplinecor0\dplinecog0\dplinecob0}}}
\dpptx0\dppty0
\
\
\dpptx0\dppty0
\
\
\dpptx0\dppty0
\
\
{\shp{\*\shpinst\shpleft9463\shptop7\shpright9764\shpbottom263\shpfhdr0\shpbxcolumn
\shpbxignore\shpbypara\shpbyignore\shpwr3\shpwrk0\shpfblwtxt0\shpz7\shplid1046{\sp{
\sn shapeType}{\sv 2}}{\sp{\sn fFlipH}{\sv 0}}{\sp{\sn fFlipV}{\sv 0}}
\dpptx0\dppty0
\
\
Academic qualification: GCE, O.}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid16075792\charrsid10636471 Level and }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid3805747\charrsid10636471 equivale}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid3805747 nt}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid6424125 OND, and its equivalent}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid16075792\charrsid10636471 , B.Sc or HND}{\rtlch\fcs1
\ltrch\fcs0 \f39\fs24\insrsid16075792\charrsid10636471 M,Sc. }{\rtlch\fcs1
\f39\fs24\insrsid3805747\charrsid10636471 P}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\cf1\insrsid3805747\charrsid10636471 hD}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\cf1\insrsid16075792\charrsid10636471 }{\rtlch\fcs1
6.\tab How long hav}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid1121888 e you being working in the firm}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid16075792\charrsid10636471 : years and
below.
dpptx354\dppty0
\
\dpptx0\dppty0
\
\
n\shpbxignore\shpbypara\shpbyignore\shpwr3\shpwrk0\shpfblwtxt0\shpz11\shplid1049{\s
p{\sn shapeType}{\sv 2}}{\sp{\sn fFlipH}{\sv 0}}{\sp{\sn fFlipV}{\sv 0}}
\dpptx0\dppty0
\
\
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid1121888 \tab 3-5 years }
\ltrch\fcs0 \f39\fs24\insrsid16075792\charrsid10636471 6-15 years}{\rtlch\fcs1
\f39\fs24\insrsid1121888\charrsid10636471 above}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid16075792\charrsid10636471 15 years
\par 7.\tab Job/Department}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid13982507\charrsid10636471 : _}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
_______________________________________________
dpptx354\dppty0
\
\dpptx0\dppty0
\
\
Do you know what working capital entails? Yes No
\dpptx0\dppty0
\
\
\dpptx0\dppty0
\
\
Do you have a firms / in service training on working capital control in your
company? Yes No
\par
\par
\par }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid2184789 SECTION B}
Please complete the following by ticking as appropriate against each of the

following statements.
\par \tab SA = }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid16524464\charrsid10636471 strongly}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid16075792\charrsid10636471 agree
\f39\fs24\insrsid16524464\charrsid10636471 = Agree}{\rtlch\fcs1 \af39\afs24
\par \tab UD Undecided
\par \tab D = Disagree
\par \tab }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid16524464\charrsid10636471 SD =}{\rtlch\fcs1 \af39\afs24
strongly}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid16075792\charrsid10636471 disagree
\par }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid16524464 1.\tab }
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid16075792\charrsid10636471 The
is general lacks of awareness of the working }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid16524464\charrsid10636471 capital}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid16075792\charrsid10636471 :
dpptx354\dppty0
\
\dpptx0\dppty0
\
\
\dpptx0\dppty0
\
\
\dpptx0\dppty0
\
\
\dpptx0\dppty0
\
\
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid16075792\charrsid10636471 \tab SA }
{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid5061156\charrsid10636471 A,}
\ltrch\fcs0 \f39\fs24\insrsid16075792\charrsid10636471 UD , D , SD.
dpptx354\dppty0
\
\dpptx0\dppty0
\
\
\dpptx0\dppty0
\
\
\dpptx0\dppty0
\
\
Efficient working capital control: SA , A, UD, SD.
\dpptx0\dppty0
\
\
\dpptx0\dppty0
\
\
\dpptx0\dppty0
\
\
\dpptx0\dppty0
\
\
\dpptx0\dppty0
\
\
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid16075792\charrsid10636471 3.\tab }
\ltrch\fcs0 \f39\fs24\insrsid14704882\charrsid10636471 Working}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid16075792\charrsid10636471 capital control
has an in impact of the financial performance of }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid5061156\charrsid10636471 companies SA}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid16075792\charrsid10636471 , A , UD , D
, }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid3701004 }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid3701004\charrsid10636471 SD}
{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid16075792\charrsid10636471 .
dpptx354\dppty0
\
dpptx354\dppty0\dpx4164\dpy708\dpxsize301\dpysize256\dpfillfgcr255\dpfillfgcg255\dp
fillfgcb255\dpfillbgcr255\dpfillbgcg255\dpfillbgcb255\dpfillpat1\dplinew15\dplineco
r0\dplinecog0\dplinecob0}}}
\dpptx0\dppty0
\
\
\dpptx0\dppty0
\
\
\dpptx0\dppty0
\
\
\dpptx0\dppty0
\
\
\dpptx0\dppty0
\
\
There is an optimal control level of working }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid741317\charrsid10636471 capital}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid16075792\charrsid10636471 that should
be }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid3701004\charrsid10636471 carried at}{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid16075792\charrsid10636471 any time SA
}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid3701004 A }
{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid16075792\charrsid10636471 UD, , UD
, D , SD.
dpptx354\dppty0
\
dpptx354\dppty0\dpx6449\dpy734\dpxsize301\dpysize256\dpfillfgcr255\dpfillfgcg255\dp
fillfgcb255\dpfillbgcr255\dpfillbgcg255\dpfillbgcb255\dpfillpat1\dplinew15\dplineco
r0\dplinecog0\dplinecob0}}}
\dpptx0\dppty0
\
\
\dpptx0\dppty0
\
\
\dpptx0\dppty0
\
\
\dpptx0\dppty0
\
\
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid16075792\charrsid10636471 5.\tab The}
{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid14438989 re}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid16075792\charrsid10636471 is an optimal level of
working capital carried increased the profit of the }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
\f39\fs24\insrsid14438989\charrsid10636471 company}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid5865155 SA, A , UD }{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid16075792\charrsid10636471 D , SD.
\par 6.\tab The amount of working capital to carry should be the minimum consistent
with running the company without }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid14438989\charrsid10636471 interruption}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0
6075792 {\rtlch\fcs1 \af37 \ltrch\fcs0 \lang1024\langfe1024\noproof\insrsid15290088
\dpptx0\dppty0
\
\
\shpbxignore\shpbypara\shpbyignore\shpwr3\shpwrk0\shpfblwtxt0\shpz45\shplid1080{\sp
\dpptx0\dppty0
\
\
\dpptx0\dppty0
\
\
\dpptx0\dppty0
\
\
\dpptx0\dppty0
\
\
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid11500372 SA }{\rtlch\fcs1
\f39\fs24\insrsid16075792\charrsid10636471 A, UD }{\rtlch\fcs1 \af39\afs24
\f39\fs24\insrsid16075792\charrsid10636471 D }{\rtlch\fcs1 \af39\afs24
\f39\fs24\insrsid16075792\charrsid10636471 , SD.
\dpptx0\dppty0
\
\
\dpptx0\dppty0
\
\
\dpptx0\dppty0
\
\
\dpptx0\dppty0
\
\
\dpptx0\dppty0
\
\
The method of financing working capital has an effect on the company's profit, SA
, A , UD , \tab D }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid16075792\charrsid10636471 SD.
\par 8.\tab Working capital should be financed using only short term financing.
\dpptx0\dppty0
\
\
\dpptx0\dppty0
\
\
\dpptx0\dppty0
\
\
\dpptx0\dppty0
\
\
\dpptx0\dppty0
\
\
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid3879676 SA , A , UD }
{\rtlch\fcs1
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid16075792\charrsid10636471 D ,}
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid16075792\charrsid10636471 SD\tab
\dpptx0\dppty0
\
\
\dpptx0\dppty0
\
\
Enlightenment should be provided on the method of working capital control.
\dpptx0\dppty0
\
\
\dpptx0\dppty0
\
\
\dpptx0\dppty0
\
\
\af39\afs24 \ltrch\fcs0 \f39\fs24\insrsid9712772 SA }{\rtlch\fcs1
\f39\fs24\insrsid16075792\charrsid10636471 A }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid9712772 UD A }{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid16075792\charrsid10636471 SD.
\f39\fs24\insrsid16075792\charrsid10636471 10.\tab What impact dose }
\ltrch\fcs0 \f39\fs24\insrsid12994371\charrsid10636471 an increase in working
capital level has}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid16075792\charrsid10636471 on profitability _____________________}
\f39\fs24\insrsid12994371\charrsid10636471 _}{\rtlch\fcs1 \af39\afs24
\ltrch\fcs0 \f39\fs24\insrsid12994371 __________________________________}
\par 11.\tab What impact dose the }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12994371\charrsid10636471 method of working capital financing has}
on profitability ___________________}{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0
\f39\fs24\insrsid12994371 _____________________________________}{\rtlch\fcs1
\par 12.\tab What are suggest ways for improving working capital control.__}
___________________________________________________________}{\rtlch\fcs1
\par }{\*\themedata
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Working Capital Control and Its Impact On The Financial Performance of Companies in Nigeria

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Working Capital Control and Its Impact On The Financial Performance of Companies in Nigeria

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\par 5.\tab To ascertain funds level of investment in working capital

\f39\fs24\insrsid4745279\charrsid10636471 analysis}{\rtlch\fcs1 \af39\afs24

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\par 2.6.1 THE ACCUMULATION OF RECEIVABLES

of non-payment that is considered }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0

firm or company must ensure that }{\rtlch\fcs1 \af39\afs24 \ltrch\fcs0

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Do you have a formal training on working capital control in your company?

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