Financial Information as a Tool for Management Decision Making (a Case Study of Champion Breweries)
CHAPTER ONE
Objective of the Study
- To appraise the nature of financial information
- To determine the nature of management decision making
- To determine the role of financial information in management decision making in Champions Breweries, Uyo.
CHAPTER TWO
LITERATURE REVIEW
Introduction
When describing financial information and its importance, we attribute some human features to it. Financial information is like eyes and ears of the management, it is also regarded as the language of business. Each business entity must know what is doing and where it is going financially. Financial information keeps the financial score for a business, it draws attention to the problem and the opportunities that comfort the enterprise. Where action in needed, it suggests possible solution or answers.
For the purpose of a working information, financial information is defined as the act of analyzing, evaluating and interpreting an organization’s financial activities and communicating the result to those who are interested. It can also be defined as the process of identifying, measuring and communicating the result to those who are interested. According to Walgenbach, et al (1987), in his book “Financial and introductory”, It can also be defined as the process of identifying, measuring and communication economic information to facilitate informed judgment to serve organization objectives.
From the definition above, it could be observed that financial is not restricted to the recording of transaction in monetary terms but it also provides information to its users. Shareholders who invested their money in the company want information on how well the company is doing so that if the management is not doing well, corrective measures should be taken. The end result of which financial statement are: –
- Profit and Loss Statement
- Balance sheet
- Cash flow statement
The information is prepared in general terms suitable for presentation to shareholder, creditors and general public. Creditors, would want to know whether a company is doing well before they could grant a loan to the company i.e. upon the presentation of the financial statement which would show the activities of the company whether the company is sound and that is a high probability that the loan will be rapid when due.
CHAPTER THREE
RESEARCH METHODOLOGY
Introduction
This chapter describes methods and procedures used in conducting this research work. The description of the procedure is done under the following headings:
Research Design
The surveys research method was used for this study. This was considered appropriate because survey design generally can be used to effectively investigate problems in realistic settings. The survey technique will also allow the researcher to examine several variables and use multi-variate statistics to analyze data.
Area of the Study
The study was conducted in Akwa Ibom State, Nigeria. Akwa Ibom state is a beautiful city in Nigeria. The population of Akwa Ibom State, according to the Akwa Ibom State Government is 9.5 million, a number disputed by the Nigerian Government and judged unreliable by the National Population Commission of Nigeria. The study was carried out in Champion Breweries Plc, Uyo, Akwa Ibom State.
CHAPTER FOUR
DATA PRESENTATION, ANALYSIS AND INTERPRETATION
Introduction
This chapter is devoted to the presentation, analysis and interpretation of the data gathered in the course of this study. The data are based on the number of copies of the questionnaire completed and returned by the respondents. The data are presented in tables and the analysis is done using t-Test. The chi-square test was used in the validation of the hypothesis.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATIONS
INTRODUCTION
So far this study we have seen how financial information is used as a vital tool for management decision making. Also, relevant literatures were reviewed, the methods used for data collection and how the data collected analysis and presented were all discussed in the previous chapters of the project. This chapter therefore, is exclusively meant for summary limitation of study conclusion and making reasonable recommendation pertaining to the subject matter of the research work.
SUMMARY
The management accountant provides financial information to all levels of management which helps them in their decision-making. He provides information for planning and control purpose, the management accountant knows the problem of an organization, and at the same time the ways of solving these problems. Its relationship with other department is horizontal in nature whereby he advices other departments on how to go about doing things so that set objectives of the organization would be achieved.
The financial information is of two type i.e management and financial information. Management information are those which deals with internal reporting while financial information are those information used by person outside the firm; it involves the financial assets liabilities and ownership interest as well as relevant information which helps the management in decision taking. Financial information should accurately be presented i.e. should be a realistic description of events or transaction that are disclosed in the report. The results of decision or events should not be involved in financial reports unless they can be verified with reasonable confidence. This serves as a check on processing and measurement of errors that might have occurred. The process of generating the information to use should be efficient when the benefit of the information used exceeds the cost of providing it. The financial information must be sufficiently available early. This is so that appropriate change in resources allocation can be made for its usefulness. The needs and supply of financial information in any organization is determined by the following factors.
- The information needed for individual manager reflecting their responsibilities.
- The work specification
- The organization structure of the company,
- The prevailing management styles.
The management information arrived at after pressing is presented to the management in form of reports; the report will contain certain things like reference to the problem to be solved, the investigation procedure adopted, the interpretation placed upon the information conclusions drawn on the problem, and the necessary recommendations.
CONCLUSION
The project has proved the importance of financial information in a firm as regards to decision making. The tools used by financial staff in any company will make sense only if the application of the financial principles and techniques discussed in chapter two are used in various aspects of the problem to be solved when making decision. Financial information makes a significant contribution of the decision making in an organization. The application of financial information in a business concern is capable finding solution to management problem in terms of decision making.
LIMITATIONS OF THE STUDY
The researchers experience some problems which could be attributed to the Nigerian factors, both humanly and non-human in nature. This could be summarized as below.
- Uncooperative tendency of most respondents who are skeptical of disclosing some certain information concerning the projects research semester work load of the institution is not always in favors of students carrying out research work.
- Unavailability of relevant research materials at school library greatly contributed to limitation of the study.
RECOMMENDATION
The usefulness of financial report is jointly determined by its constants and the user’s skill of interpreting it, the account department should therefore help management to understand the meaning and proper use of the information prepared and submitted to them. The researcher has examined the importance of financial information as a vital tool for management decision making and come up with the following recommendation.
BIBLIOGRAPHY
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