Relevance of Financial Management on the Business Growth in Abeokuta
CHAPTER ONE
OBJECTIVES OF THE STUDY
The objectives of the study are;
- This study attempts to provide an orderly framework for “Financial Appraisal in Small Business Management”.
- It is aimed at inquiring on how Government has contributed to the progress of business activities.
- Inquire the possible causes of uncontrolled cash and management of resources, the techniques methods of evaluation and performance of financial policies, method being used in business organizations.
CHAPTER TWO
REVIEW OF RELATED LITERATURE
Concept of Financial Management
A careful financial management of working capital is more vital in small and medium enterprises than it is for large organizations particularly as they are not likely to have access to financial expertise like the large enterprises. The importance of efficient financial management is not new to the finance literature (Agyei –Mensah, 2012). Financial management is one of several functional areas of management, but it is central to the success of any small business. Broadly, financial management is the management of finances of a business to achieve the financial objectives of the business. Basically, financial management is based on mobilizing and using sources of funds (Abanis et al, 2013). Financial management is also concerned with raising the funds needed to finance the enterprise’s assets and activities, the allocation of theses scares funds between competing uses, and with ensuring that the funds are used effectively and efficiently in achieving the enterprise’s goal are all part of the process (Abanis et al, 2013). A company must be able to generate sufficient cash to be able to meet its immediate obligation and therefore continue trading. Inadequate financial management decisions and accounting information have been referenced consistently as causes of small and medium enterprises failure (AdjeiSarpong, 2012). The critical issue of financial management practices in the SMEs sector has long attracted the attention of researchers. Depending on different objectives, researchers emphasize different aspects of financial management practices. The concept has been summarized in Australia, the UK and the USA among others (Abanis et al, 2013). In their review on the context of financial management practices, the following areas were emphasized, namely: financial decisions, investment decisions and accounting information systems. However, these previous researchers though looked at financial management practices; they did not include paramount key areas like working capital management practices which included accounts receivable, inventory, cash management and accounts payable management (Abanis et al, 2013).
CHAPTER THREE
RESEARCH METHODOLOGY
Research design
The researcher used descriptive research survey design in building up this project work the choice of this research design was considered appropriate because of its advantages of identifying attributes of a large population from a group of individuals. The design was suitable for the study as the study sought to relevance of financial management on the business growth in Abeokuta
Sources of data collection
Data were collected from two main sources namely:
(i)Primary source and
(ii)Secondary source
Primary source:
These are materials of statistical investigation which were collected by the research for a particular purpose. They can be obtained through a survey, observation questionnaire or as experiment; the researcher has adopted the questionnaire method for this study.
Secondary source:
These are data from textbook Journal handset etc. they arise as byproducts of the same other purposes. Example administration, various other unpublished works and write ups were also used.
Population of the study
Population of a study is a group of persons or aggregate items, things the researcher is interested in getting information relevance of financial management on the business growth in Abeokuta. 200 staff of Jomfol Investment Company Nigeria limited, Abeokuta was selected randomly by the researcher as the population of the study.
Sample and sampling procedure
Sample is the set people or items which constitute part of a given population sampling. Due to large size of the target population, the researcher used the Taro Yamani formula to arrive at the sample population of the study.
CHAPTER FOUR
PRESENTATION ANALYSIS INTERPRETATION OF DATA
Introduction
Efforts will be made at this stage to present, analyze and interpret the data collected during the field survey. This presentation will be based on the responses from the completed questionnaires. The result of this exercise will be summarized in tabular forms for easy references and analysis. It will also show answers to questions relating to the research questions for this research study. The researcher employed simple percentage in the analysis.
DATA ANALYSIS
The data collected from the respondents were analyzed in tabular form with simple percentage for easy understanding.
A total of 133(one hundred and thirty three) questionnaires were distributed and 133 questionnaires were returned.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Introduction
It is important to ascertain that the objective of this study was to examine relevance of financial management on the business growth in Abeokuta. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of financial management on the business growth
Summary
The research work showed that the overall profitability in business will be enhanced if good financial structure is properly managed as measured by leverage, short term debt and equity. This therefore means that, business operating in Nigeria should place more emphasis on equity funding compared to debt finance.
Conclusion
The growth of business has considerably been seen among other stakeholders in the business industry/enterprise with respect to financial management. The purpose of the study was to assess on the Impact of Financial Management on the Growth of business. The overall study indicated that financial management practices is very critical in all business enterprises irrespective of the size and location
Recommendation
Business should also be encouraged to diversify their products and move from the traditional practice of not venturing into other products
Further, business should be advised to strengthen and put up policies regarding debtors on how to collect receivables, be able to know when to write off bad debts so as to minimize losses that accrue as a result of none payment. Similarly, efforts should be put by business owners to ensure that inventory management is improved through setting re-order levels both for minimum and maximum so that the business does not run out of stock as well as tie too much capital in stock which affects the working capital. The ministries of finance and industrialization should provide a favorable platform for business to access financing that can enable them to run their businesses at a reasonable cost of financing. This is necessary since access to bank loans was found to be difficult for business and end up using only internally generated funds. The interest rates should be favorable; similarly the requirements to accessing such funding should also be reasonable so as not to push SMEs away
References
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