1.1 BACKGROUND OF THE STUDY
Cash management is a means of protecting
cash in organization cash is the most important current asset for
operation of business. It is the basic input needed to keep the business
running on a continuous deals. It is also the altimeter output expected
to be realized by selling the service or product manufactured by the
firm. The firm should keep sufficient cash neither more nor less
shortage will disrupt the firms manufacturing operation. While excessive
idle without contributing anything towards the firms profitability
Cash management involves initially the
provision of sufficient cash to meet the organizations obligations. When
they full down and secondly the maintenance of a sufficient cash flow
to enable the organization to take the advantage of the growth and
investment opportunities by committee T. C. The aim of this project is
to explain in simple and clear language what management must do to have
effective control over its most liquidly and important asset cash. Thus a
major assignment of the financial manager is to maintain a sound cash
Effective management and control of cash
is very important to the firm because cash represent instantly
available purchasing power and nearly every transaction ultimately
involved the exchange of cash.
An integral part of cash administration
is concerned with the effective utilization of corporate fund. The
planning and control of this activities is made necessary by the fact
that business is cyclical in nature and a considerable amount of time,
during which raw material must be purchased and wages and over head paid
claps between the receipt of an order its shipment and banking of cash.
An investment in cash assets is required in order to meet the company’s
operational need, the uneven flow in the receipt and disbursement of
funds, seasonal fluctuations and so on. Moreover, the receipt and
disbursement of fund is varies on a daily bases and within the month,
with a heavy cash receipt accruing at a particular time.
Sophisticated cash management models recognize the uncertainty inherent in forecasting both cash inflows and outflows.
1.2 STATEMENT OF THE PROBLEMS
Cash constitution a substantial part of
current assets of many companies particularly in Nigeria. An effective
cash management is necessary for the overall performance of
organization, one is surprised at the complete lack of formalized cash
management system in many organization in Nigeria. While some companies
prepare cash budget at the beginning of the financial year. Without any
follow up control process, others just have cash. Management to the
monthly bank reconciliation statements, which are often prepared in
arrears, unfortunately, it is only when cash problem arises that the
management starts to look for solution.
1.3 PURPOSE OF THE STUDY
In every business organization effective
cash management plays a vital role in assisting the business attain
certain goals. Among this basic purpose of the study are;
a) To find out whether
formalized cash management system exist in manufacturing industries
particularly in Nigerian Breweries Limited 9th Mile Corner.
b) To determine the part which effective cash management plays in organizations in attaining its objectives.
c) To verify from
practicing accountants and financial executives the consequences of not
having effective cash management in manufacturing organization.
d) To relate how
effective cash management can assist business to attain their
predetermine profitability by increasing net returns on asset
e) To determine whether inefficient cash management has any impact in manufacturing investment.
f) To ascertain how a company can optimize liquidity position by adequate cash management.
g) To determine the level of efficiency in cash management of Nigeria Breweries Limited 9th Mile Corner Ngwo.
1.4 SCOPE OF THE STUDY
It is on established fact that in any
research project like this type, it is not always easy to cover all
possible grounds one would like to cover due to time constrains. This
research work through based on manufacturing industries were limited to
Nigerian Breweries Limited 9th Mile Corner Ngwo and its
environs due to time since the time required for the completion is very
short, the researcher finds it difficult to cover all the manufacturing
organization in Enugu State.
1.5 RESEARCH QUESTION
a) How has cash management assisted Breweries Industries in attaining predetermined profitability
b) Is effective cash management necessary in optimizing liquidity position?
c) What are the roles of cash management in working capital evaluation?
d) Is effective management present in manufacturing organization such as Nigerian Breweries Plc.
1.6 SIGNIFICANCE OF THE STUDY
In recent time due to changes in
business generally, greater emphasis have been placed on cash
management. The important of this study is that it will highlight the
consequences of not having and operating an efficient cash management
system in business organizations. The research work will also expose the
management of manufacturing organization to effective way to manage
cash towards the achievement of organizational goals.