ABSTRACT The objective of this study is to
evaluate and examine the adequacy or inadequacy of working capital: its
importance and implication The study observed that A lot of financial
institutions have failed and more may still fall due to inadequacy of working
capital Because many financial institutions has quested or fallen some firms
has will draw the confidence they have
in putting more effort to progress while the liquidated ones find it different
to off set its indebtedness. In conclusion, the following recommendation more
made Firms that has excess working capital should invest their excess capital
in short term investment so that they will not be forced with the adverse
effect of excess working capital Corrective measures should be adopted to the
consequences of inadequate or excess working capital in the economy. TABLE OF CONTENTS Title page Approval
page Dedication Acknowledgement Contents CHAPTER ONE Introduction Background of
study Statement of problems Objective of study Significance of the study Scope
and limitation Definition of terms CHAPTER TWO Literature review Need for
working capital A balance approach Component items of working capital
Classification of working capital Importance of adequate working capital Excess
working capital and its effect Adequacy of working capital Implications of
inadequacy working capital CHAPTER THREESummary of funding, recommendation and
conclusion Discussion of finding Conclusion Recommendation Bibliography
CHAPTER ONE
INTRODUCTION The primary aim of establishing
or going into business is to optimize profit and as well as ensure continuity
of that business concern. When one person (sole trader) or group of person
(partnership or companies limited by shares or guarantee) intends forming a
business entity or will need a smooth take off, these fixed and current assets
in facing and current assts will be funded from both long term liabilities and
current liabilities (or capital) as the case may be. On formation, the business
as an entity will be provided with fixed assets, such as building and premises,
plant and machinery, equipments, motor van etc. but from all medication we know
and we see that these fixed assets itemized and we see that achieve the a fore
said aims of establishing the business. This is so be cause the fixed assets
were not bought for then purpose of resale as a result any project cannot be
directly accruable from its continuous stay. From the foraging, it is easily
describable from it that the business as a going concern need some
indispensable terms or factors that will determine its profitability and its
ability to with stand the rest of time in a prevalent competitive environment.
These indispensable items are operational and resoling in contrast with fixed
capital and this is what we termed as the “WORKING CAPITAL” BACKGROUND OF STUDY
The need for working capital would not have been necessary or relevant if not
it’s inherent problems. In the light or this I wish to state a maiden approach
in discussing this course or profession could easily flow and appreciate this
simplicity of this presentation. The need for cash detention or holing cannot
be overemphasized because it goes a long way in tacking problems resulting from
inflation and its like. Therefore, attempts would be made discuss the problems,
prospectus of this topic for the benefits of those who care to read or go
through the content of this piece of work.
STATEMENT OF PROBLEM . For many years they are some
historical cause of adequacy or inadequacy of working capitals. What other likely causes are and knowing the
causes and also finding remedies to them, knowing all these problem does the
government, financial institutions and private individual any role to play in
the cause and remedies. As a result of this problem firms easily find
themselves go or walk the of liquidation because they failed to make Provisions
for the rainy day. This piece of work is an attempt in providing last solutions
to these problems and ways of abating these problems forever.OBJECTIVE OF STUDY
1. The project is hopefully aimed at identifying the cause of adequacy or
inadequacy of working capitals. 2. Corrective measure\remedies that could be
adopted to the consequences of adequacy or inadequacy of working capital in the
economy.