Cash Management in Manufacturing Organization (a Case Study of Nigeria Breweries Ninth Mile Corner Ngwo)

Cash Management in Manufacturing Organization (a Case Study of Nigeria Breweries Ninth Mile Corner Ngwo)

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INTRODUCTION

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 (Pandey I.M).

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 position.

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.

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.

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 9^th 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 investment.

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 9^th Mile Corner Ngwo.  

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 9^th 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.

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.

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

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