ABSTRACT
The
emergence of financial management as a major contributor to the analysis of
investment and financing decisions has continues to respond to external
economic and technical developments. The improvements in the efficiency and
regulation of financial markets, has provided a better basis of the development
for financial theory and its practical application.
This research work examine the impact of financial management strategies
in the management of public enterprise with special reference to
Nigeria National Petroleum Corporation (NNPC). The research investigates how the firm maximize stakeholders wealth; how the
firm maximize profit and how the firm maximize stakeholders wealth and
management.
Existing literatures on financial management were reviewed. The study
also highlight the functions of financial manager, the links with financial
environment and the nature of public enterprise.
A sample of fifteen (15) staff was sampled out of the entire population
of NNPC for the analysis of the study. Data was garnered with the use of
questionnaires administered to selected sample. The data were illustrated on
tables and interpreted in percentage.
The study presents two hypotheses
that were formulated based on the research questions. The hypotheses were
tested with the use of Chi-Square analysis. The analysis resulted into
rejecting the two null hypotheses. Based on the decision of the analysis, it
was concluded that; Financial management plays a major role in a Public Sector
and Public enterprises maximize stakeholders’ wealth for hypothesis one and
two. Conclusion was drawn based on this judgment and recommendations were made
to both firm of study and other firms operating in Nigeria.
TABLE OF CONTENTS
CHAPTER ONE:
INTRODUCTION
1.1 Introduction
1.2 Statement of Problems
1.3 Objectives of the Study
1.4 Research
Questions
1.5 Statement of Hypothesis
1.6 Significance of Study
1.7 Scope and Limitation
1.8 Definition
of Terms
REFERENCES
CHAPTER
TWO:
LITERATURE
REVIEW
2.1 Conceptual Framework
2.2 Functions of Financial
Manager
2.3 Nature and Scope of Finance
2.4 Finance Functions
2.5 Origin of Public
Enterprise
2.6 Characteristics of Public Enterprise
2.7 Nature of Public
Enterprise
2.8 The Reasons for Public
Enterprise
2.9 Importance Of Public Enterprise
2.10 Objectives of Public Enterprise
2.11 Scope of Finance Functions
2.12 Sources of Business Financings
2.13 Relationship between Risk
and Return
References
CHAPTER THREE:
RESEARCH METHODOLOGY
3.1 Introduction
3.2 Research Design
3.3 Method of Data Collection
3.4 Sample
and Procedures
3.5 Method of Data Analysis
3.6 Technique
of Analysis
CHAPTER FOUR:
DATA PRESENTATION, ANALYSIS AND INTERPRETATION
4.0 Introduction
4.1 Procedure for the Processing and Analysing
Collected Data
4.2 Analysis
of Data According To Test of Hypothesis
CHAPTER FIVE:
SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.1 Summary of Findings
5.2 Conclusion
5.3 Recommendations
Bibliography
Appendix
CHAPTER
ONE
INTRODUCTION
1.1
INTRODUCTION
Raising
and utilizing funds efficiently and effectively has been a major source of
concern to all financial managers both in the corporate World and Public Sector
all over the world. The prime purpose of esstablishing a firm is to ensure that
returns will not only be sufficient to meet the cost of funds but also enough
to satisfy the wealth of maximization objective of the firm, thus, raising
finance for corporate bodies has become important.
Financial
management can thus, be described as the management planning and controlling of
financial resources of a business to achieve the objectives of the business. It
has long been considered as a branch of Economics but in the early 20th
century it emerged as a separate discipline. It can also be defined as the identification
of the possible strategies capable of maximizing an organization Net Present
Value, the allocation of scarce resources among the competing opportunities,
and the implementation and monitoring of the chosen strategy so as to achieve
stated objectives.
Financial
management as a subject is of growing interest to both academics and financial
manages. On its emergence, it dealt with only the instruments, institutions and
procedures in the capital market it later dealt with keeping records and
reports, establishing funds (external financing) monitoring cash position and
paying bills. It also deals with the concepts, assumptions, principle and
techniques underlying the major financial decisions of the enterprises
financial management connotes responsibility for obtaining and effectively
utilizing the funds necessary for the efficient operation of an enterprise. The
finance function Centre around the management of funds, raising and using them
effectively. It therefore covers all functions concerned in attempting to
ensure that financial resources are obtained and used in the most effective way
to secure attainment of the objectives of the organization.
It
provides the background for though understanding of the nature, theories and
critical issues relating to modern financial management. It thus serves as a
necessary background to a more advanced treatment of the investment financial
decision.
Financial
management today now includes a rigorous analysis of investment of
organization's funds in assessing and obtaining the best mix of financial and
dividend in relation to overall market valuation of a firm.
The
field is still changing with ideas and techniques. The historical background of
the company under review is thus: Nigeria National Petroleum Company (NNPC) was
established on April 1977 under the statutory instrument Decree No. 33 of the
same year by a merger of the Nigeria National Oil Corporation operational
functions and the Ministry of Mines and Power with its regulating
responsibility, this decree established NNPC, a public organization that would
on behalf of government adequately manage all government interest in the
Nigeria oil industry.
In addition to its
expiration activities, the corporation was given powers and operational
interest in refining petrochemicals and products transportation as well as
marketing. Between 1978 and 1989, NNPC constructed refineries in Warri, Kaduna and Port Harcourt
and took over 35,000 barrel shell refinery established in Port Harcourt in 1965.
In
1988, the NNPC was commercialized into 12 strategic business units covering the
entire spectrum of oil industry operations; exploration and production gas
development, refining, distribution, petrochemical engineering and commercial
investment. The subsidiary companies include:
i.
National Petroleum Investment Management
Services (NAPISMS)
ii.
Nigeria Petroleum Development Company
(NPDC)
iii.
The Nigerian Gas Company (NGC)
iv.
The Products and Pipelines Marketing
Company (PPMC)
v.
Integrated Data Services Limited (DSL)
vi.
Nigeria LNG Limited (NLNGN)
vii.
National Engineering and Technical
Company Limited (NETCO)
viii.
Hydrocarbon Services Nigeria Limited
(HYSON)
ix.
Warri Refinery and Petrochemical Co.
Limited (WRPC)
x.
Kaduna
Refinery and Petrochemical Co. Limited (KRPC)
xi.
Port-Harcourt
Refining Co. Limited (PHRC)
xii.
Eleme
Petrochemicals Co. Limited (EPCC)
In
addition to these subsidiaries, the industry is also regulated by the
Department of Petroleum Resources (DPR) a department within the Ministry of
Petroleum Resources. The DPR ensures compliance with industry regulations
processes applications for licenses, leases and permits establishes and
enforces environment regulations. The DPR and NAPIMS play a very crucial role
in the day to day activities throughout the industry.
The
NNPC is
by law a joint venture between the Nigerian
Federal Government and a number of foreign multinational corporations, which
includes Royal Dutch Shell, Exxon-Mobil, Agip, Total fina Elf, Chevron and
Texaco (though now merged with Chevron). Through collaboration with these
companies, the Nigerian government conducts petroleum exploration and
development.
According
to the Nigerian constitution, all minerals, gas and oil in the country possess
are legally the property of the Nigeria Federal Government.