CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE
STUDY
Nigeria limited, an economic parastatals was incorporated in
may 1962 under ordinary company law as a partnership between the form Nigeria
government and said machine. The supplied plant to the company and managed the
affair until the war broke out in 1967 is only indigenous gas producing company
in Nigeria.
After the
war in 1970, the company was reactivated and started production on 1stApril
1975. between 1983 and 1984 there was cram shaft broke down which resulted in
the stoppage of production. The company received #733.000 from the state
government which was later converted into their share and also as loan.
1.2
STATEMENT OF THE PROBLEM AND PURPOSE OF THE STUDY
The statement of the problem is to carryout an investigation
into the field of financial management practice in government owned companies,
with particular reference to Nigeria limited and also highlight the financial
problem facing these companies in this problem the main purpose of this study
is to:To identify and examine some factors that militate against successful
financial management of government owned companies To find out why those
problem have been difficult to solve and make recommendation and suggestion on
how they should be solved. Explore other areas which in the writers opinion are
relevant for effective management of funds. To recommend generally and
specifically the study of financial management.
1.3
RATIONALE OF THE STUDY
Financial management vary necessary according to the nature
of the enterprise concerned, once the corporation objective have been defined,
the examination of the whole business structure and the related financial need
as follows:
The goal
and objective of financial management is to maximize the shareholder wealth by
this view they should formulating the firms objective in terms of the share
holder interesting the main base of financial market is implemented. That mean
the firms with better performance will have higher stock price and additional
funds can be commonly pressure the aims of financial management is the
maximization of the firms value (i.e. profit maximization relative to
investment).
To obtain these, some unprofitable short run may be required
Financial management objective of the company is to maximize
its value to their share holders.
1.4
SIGNIFICANCE OF THE STUDY
Financial management is very important for the achievement
of the firms goal and objective. Because it help the financial manager to carry
out their effective project financial management in government owned companies
help to see how the field of financial management will contribute to a better
improvement of the study of finance, there by minimizing the result of our
investment and divided decision by companies.
It helping the finance manger for decision
making by planning for futuristic event that may occur for day to day business
activities.
1.5
DEFINITION OF THE TERMS
Financial management may be defined as the function and
areas of responsibilities of financial manager such as.The raising of funds to
finance project. The employment of funds to raised in viable project The
management of the cash flow arising from these project The return of funds to
the funding sources. This fund are raised from financial market and allocated
among different uses the flow of fund involved in the operation of the
enterprise are managed. The financial management in the provision of fund of
time it is required any person responsible for finance in any form, is confronted
with the prospects of inflow and outflow at receipts and payment and they
arise.