ABSTRACT

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The data for this study was collected through observation, library, research, interviews and questionnaires administered to the management staff of the course study company, using pilot survey of the management population. The data collected were analyzed using percentage approach were guard the validity and reliability of the hypothesis testing. In effect, the nature of the data analysis is significantly ad statistically computational.

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 The researcher observes that the company does not grant credit facilities to it’s customers and that inventory level to be maintained is purely subjective. The liquidity position of the company makes profits. The management of cash and accounts receivable are effective and efficient, though the structure, financing and pattern of working capital usually specified in the text book as norms for assessing soundness are not strictly adhered to in practice. It is also obvious that no firm can survive without an effective and efficient management of it’s working capital especially in this period.

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 Computationally, the working capital management has a positive influence on the corporate performance position. Thus, quality                        control and marketing units need total accounting, there is need for corporate appraisal. The rational of working capital management is on the realization that current assets holding should be increased to the point where marginal returns on increase in such assets are equal to cost of capital required to finance such additions while current liabilities should as much as possible be used instead of long-term debt whenever this reduces the average cost of capital.   

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TABLE OF CONTENT

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Title page

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Approval page

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Dedication

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Acknowledgment

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Abstract

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Table of content

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Chapter one

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1.0.      Introduction

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1.1       Statement of problem

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1.2       Purpose of the study

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1.3       Significance of the study

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1.4       Statement of hypothesis

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1.5       Scope of the study

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1.6       Limitations of the study

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1.7       Definition of terms.

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Chapter two

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2.0.      Review of related literature

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2.1.      Meaning of working capital

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2.2.      Composition of working capital

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2.3.      factors affecting the composition of working capital

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2.4.      current assets

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2.5.      current liabilities

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2.6.      management of working capital

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2.7.      types of working capital

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2.8.      characteristics of working capital

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2.9.      sources of working capital

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2.10.  uses of working capital.

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Chapter three

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3.0.      Research design and methodology

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3.1. Sources of data

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§  Primary data

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§  Secondary data

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3.2. Sample used

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3.3. Method of investigation

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Chapter four

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4.0.      Data presentation and analysis 

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4.1.      Data presentation and analysis

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4.2.      Test of hypothesis

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Chapter five

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5.0. Summary of findings, conclusion and recommendation

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5.1. Findings

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5.2 conclusions

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5.3 recommendations

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Bibliography

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Appendix   

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CHAPTER ONE

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1.0       INTRODUCTION

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Firms needs cash to pay for all their day – to – day activities. They have pay wages, pay for raw materials, pay bills and so on. The money available to them to carry out all these responsibilities is known as the firm’s working capital.

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In financial management, it is generally believed that liquidity is more important than profitability. One of the reasons for this is that most organizations makes profits, but do not posses enough or adequate liquidity assets to off set it’s current obligations. The inability of a firm to make payment as and when due may definitely have serious consequences on the organization and this situation may lead to loss of goodwill and may as well as result to technical insolvency which may lead the organization into liquidation.

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 Another reason is that uncertainty inherent in this present day’s economic business environment threatens the survival of every business, thus making sound liquidity and cash management a necessity of focal point in corporate planning. This claim, is substantiated in recent times by the fact that the importance of management of liquid assets has been gradually and systematically gained prominence and growth in most manufacturing firms. So, this incidental prominence and growth of liquidity management makes it very apparent that no organization or firm can survive without an effective and efficient management of it’s liquid resources which is the working capital.

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 The life wire of any business or organization depends on the working capital of that business or organization, i.e it is the lifeblood of any business and if you take it away, such business will surely expire. Infact, it is particularly important for the daily maintenance and running expenses involving cash. Therefore

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