The Role Of Financial Management In A Co-Operative
Organization (A Case Of Study Of Union Bank (Plc)
Enugu)
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TABLE OF CONTENT
Title page
Approval page
Dedication
Acknowledgement
Abstract
Table of content
CHAPTER ONE:
1.1 INTRODUCTION
1.2 STATEMENT OF THE PROBLEM
1.3 OBJECTIVE OF STUDY
1.4 SIGNIFICANCE OF STUDY
1.5 STATEMENT OF THE HYPOTHESIS
1.6 SCOPE OF THE STUDY
1.7 SCOPE OF THE STUDY
1.8 DEFINITIONS OF TERMS
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CHAPTER TWO:
2.1 REVIEW OF THE RELATED LITERATURE
2.2 GENERAL REVIEW
2.3 FICNAIL RATIOS AND PROFIT PLANNING
2.4 BUGETING AND INVESTMENT ANALYSIS
2.5 MANAGIN THE FINANCIAL STRUCTURE
2.6 REFRENCE
CHAPTER THREE
3.1 RESEARCH DESIGN AND METHODOLOGY
3.2 SOURCE OF DATA
3.3 PRIMARY
3.4 SECONDARY DATA
3.5 SAMPLE USED
3.6 METHOD OF INVESTIGATION
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CHAPTER FOUR
4.1 DATA ANALYSIS AND INTERPRETATION
4.2 DATA PRESENTATION AND ANALYSIS
4.3 TEST OF HYPOTHESIS
CHAPTER FIVE
SUMMARY, FINDINGS, CONCLUSION AND RECOMMENDATION
5.1 SUMMARY OF THE FINDINGS
5.2 CONCLUSION
5.3 RECOMMENDATION
BIBLIOGRAPHY
APPENDIX / QUESTIONNAIRE
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CHAPTER ONE
INTRODUCTION
Financial management involves all the activity of the financial managers
concern with the rising of capital lining cash and credit requirement including
the effective control of financial resources
The activity could be suggested as follows;
1. Converting forecast into planned and budget
2. Planning the appropriate capital structure
3. Raising cash flow outside the business
4. Forecasting the future
5. Investing surplus fund
6. Controlling the cash balance and flow in accordance with plans and with
changing circumstance.
7. With the emergency of finance as a separate field emphasis was more or
less on legal matters such as mergers
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FORMATION OF NEW COMPANY DISPOSAL AND
CONSOLIDATION
With the most vital problem of the firm was identification of the means
for raising capital for possible expansion due to the increasing wave in
industrialization. The mobility of fund from the
Areas of surplus to the areas of scarcity posed a lot of problem. Because of the
radical changes which ochre during the depression of 1930 which culminated
into the failure of many business finance which re-directed to bankruptcy,
reorganization and liquidity for profitability under the imperfect perfect
competition continues to be the motivation to maximize the profit and wealth
of the owner. To ague to maximize profit has led to he study of financial
management of which attribute factor can be socialized as follows;
(a)
Saving
(b)
Business growth
(c)
Inflation
(d)
Competitive
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Base on the above background, some through was giving a financial
management to provide skillful planning control and execution of financial
management activity.
The practicing managers are interested in this study because among the
most crucial decision of the firm are of those which relates to the financial
matters and so are giving better treatments for better understanding of financial
management which provide them with conceptual and annalistically insight on
the capital fund and using the capital fund are called financial function of any
firm
GOALS AND OBJECTIVE OF THE FINANCIAL MANAGERS
Financial which is the life wire of any business and as developed in 1900
since it concerns the actual flow of money as well as any claim against money.
The financial mangers subsequent decision is made in such more co-ordinate
manner responsible for the control system. The financial managers are concern
with;
(a)
Financial planning with the bank
(b)
Raising of fund
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(c)
Allocation of fund
(d)
Financial controlling of fund
(e)
Interpretation
FINANCIAL PLANNING
The involve he estimating and planning of the future flow of cash
receipt and disbursement raising of fund involve organizing the raising of fund
which involve the funding necessary for planning. The second is the
acquisition of the fund. There are a wide variety if the fund. It has certain
characteristic as cost maturity, availability. The encumbrance of asset and other
terms exposed by the capital.
On the bases of this function, the financial managers of a bank must
determine the best mix of finance for the banking industry. Therefore the
financial managers have to take the issue of formulation of policies. In the
interest of such policy is to plane, co-ordinate, motivate and control activities
of the firm, which are responsible of the efficient financial management of the
resources. An efficient financial management thus is the same as a valuable aid
to the process of decision-making and a major contributing to the pale and a
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major contribution to the pale of economic. The principal responsibility of
financial managers involves a theory evaluation of investment financial and
dividend decision with the sole aim of maximizing wealth. The financial
managers studies the annalistically techniques and the environment where
financial decision are made.
The financial manager keeps accurate account and records of, preparing the
cost, providing the means for payment of bills, procuring additional in case of
cash needed. Investing fund in asset and procuring the bets means of financing
in relation to the overall development of the organization. The task of the
financial manager is invisibly faced with problem with those of profitability,
liquidity and risk factor, which influence both internal and external
environment.
Only sound financial decision based on the analysis, planning and
control of activity therefore can help optimized the values of operational
optimization of the profit and shareholders wealth in one of those guiding.
Objective of business enterprise, which its allocation of resource and the
financial decision for the financial manager. The financial manager must be
aware of sources of finding the business and be guided by time, selection and
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combination of those available. That is the financial manager dilemma and the
principle of sustainability. The financial managers dilemma is that of
profitability and liquidity while sustainability is the principle of time balancing
with asset and liability that is using short time term liability to financial short
term asset and long term liability to finance the long term asset.
ALLOCATION OF FUND
Wise use of fund is allocating such fund in such project or such venture
that will yield optimal return ensuring efficient use of fund. The financial
managers ensure the efficient allocation of fund among the various uses. The
allocation must be in accordance with the underlying objective of the firm to
maximize the profit in the customer’s wealth. The role of financial manager
has expanded of the management of the working capital to long-term asset and
liabilities. He is concern with ways of efficient managing this current asset in
order to maximize efficient profitability relative to the amount of fund tied up
in the asset
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FINANCIAL CONTROLLING
Financial monitor financial operation to ensure the cash flow are
proceeding according to the plane
INTERPRETATION
The bank is part of financial community. It financial management can be
fully interpreted only with the contest by he working of the financial institution
and the markets
ORGANIZATIONAL GOALS
Since this project is concern with the role of financial managers in a
cooperate organization, therefore, it is important to note the goal of any
financial.
Maximization of profit. This is the frequency encountered goals of any
business impact all business believed that as long as they are earning as much
as possible while holding down cost, they are archiving the goal of profit
maximization appears performance.
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b. Maximization of wealth the main objective of financial management is the
maximization is accomplished by maximizing the sum of the present value of
the stream of dividends received and the present value of the increased in the
market values of the shares of stocks held by the shareholders. Thus, the
apparent wealth maximization is the best economic objective shareholders as
the owns and for the bank whose primary interest is to customers own. The
environmental scope of financial manager in executing their job, Financial
managers do not have absolute authority in carrying out their responsibilities
their actions are constrained by certain factors beyond their control.
THESE FACTORS ARE DIVIDED INTO TWO
a. Internal environment factor the principal factor in this case is the
unavailability or the lack of human resources and the organizational self
imposed standard.
b. B.
The external environment factor such as the political legal
framework cultural and social values, the economic climate,
technological trends and custom attitude .It is therefore imperative that
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financial manager should take cognizance of environmental factors that
affect their decision.
STATEMENT OF PROBLEM
There has been unprecedented increase in the quest for the answer of the
following questions posed in order to clarify the duties of financial manager,
which is the prospective rank of a student studying finance. Financial managers
do not have authority in carrying out their responsibilities their responsibilities
their actions are constrained by certain factors beyond their control. These
factors can be dividrdinto two Internal environment factor .The principal factor
in this case. The [rinc9ipal factor in the case is the unavailability of human
resource and the organization self imposed standard. The external environment
factor such as the political legal firm work. Culture and social value. The
economic climate technological trends and the customers’ attitude. It is
therefore imperative that financial managers take cognizance of the
environmental factors that effect their decisions.
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There has been unprecedented increase in the quest for the increase for answer
for the following questions posed in order to clarify the duties of a financial
manager, which is the prospective rant of studying finance.
What is managerial finance? How importance is the financial functions
for the company. Are the financial mangers responsible for the performance of
certain task? Dose this means that his action are design to accomplices specific
goals. How and when did the financial archive the firm objective, which is the
finical managers definition of the fare price, and how is it related to his firm
return and investment capital. One may logically ask, why are we interested in
this cash flow if they do not affect the profit. Why cannot the profit effect not
be taking directly not the account in the analysis? What tools and techniques
are available to him and how dose he goes about managing his own
performance. On a general scale, do they have any operational meaning? That
is how can managers operation use to further national goals. Having identified
these questions, the provision of possible answers to the listed question
constitutes areas of possible consideration of the project. As stated that the
financial management must find a rational base for answering the following
three questions;
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(a)
How large should an enterprise be and how fast should it grow. What
should be the composition of its liability
(b)
What should be the composition of its liability
(c)
In what form should it hold it asset board decision.
The asset question stated above relate to three board decision areas of
financial management. Investment financial managers become important that
the primary research conducted on a named company serves a dual purpose this
not only serve as part of the tools in answering the questions, but is mainly
used to unfold the extent to which the financial managers of a company is
executing his duties according to the project
SIGNIFICANCE OF THE STUDY
The purpose of this project: the role of finical management in cooperate
organization, is to equip the practicing, finical managers, financial controllers,
and director of finance, treasurers, student of financial studies and readers with
a basic understanding of financial decision. The financial manager carries out
financial decision maximize through the following;
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(a)
Current asses management
(b)
Capital budget decision
(c)
Dividend decision
(d)
Financial decision
CURRENT ASSET MANAGEMENT
The financial manager has every right to manage the long-term asset and
also the duties to mange the current assets, efficiently to safeguard the fund
against liquidity or insolvency
Investment in current affects the firm profitable liquidity and risk. If the
firm doses not invest sufficient funds in current asset, it may become illiquid.
But it would less profitability, as idle current assets would earn anything, in
order to ensure that it would not earn anything. In order to ensure that neither
insufficient nor unnecessary funds are invested in current asset, in fact it should
develop sound techniques of managing the current asset.
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CAPITAL BUDGETING
It is investment decision of the firm to have its refund investment in
long-term project in anticipation of expected flow of future benefit over a
period of years. This decision could be either to mechanize a process, replace a
machine with another modern type, selecting between machines, and induction
of new product or business expansion.
These features are;
1. Investing current funds for future benefit
2. The period of inc=vestment which involves long term activities
3. The potential benefit, which will accrue to the firm over a period of time.
DIVIDEND DECISION
The finical manager must determine the optimum dividend - payment
ratio. He should consider the questions of dividend stability, stock dividend
and cast dividends. Financial manager must divide whether the firm should
distribute all profit or retain the balance.
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FINANCIAL DECISION
The financial manager must decide when, how, and whom to acquire
fund from to meet the firm investment needs. The significant t issue before him
is to determine the proportion of equity capital and dept capital. The proper
balance will have to be struck between return and risk once the financial
manager is able to determine the bets combination of dept and equity. He must
raise the appropriate amount through the bets available resource.
RESEARCH HYPOTHESIS
Base on the certain theoretical assumptions, hypothesis will be
formulated below. There theoretical assumption, which include the established
fact that the level of investment firms undertake and as such, the level of dept
end by firms. Investment involve additional rest or financial assets and is
usually measured in terms of fund used in the process, this funds include both
equity and debt.
Ho: the level of debt financing has a negative effect on the economy
Hi: the level of financial has a positive effect on the economy
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Ho: the level of dept financing has a positive effect on the performance of the
employee
Hi: the level of debt financing has negative effect on the performance of the
employee
Ho: the level of debt financing has not positive effect on the productivity of a
firm
Hi: the level of debt financing has a positive effect on the productivity of the
firm.
LIMITATION AND DELIMITATION OF THE STUDY
The research, may not fail to expose some of the constraint or restriction
we have encountered in collecting the material for the project. There is no
gainsaying the unavailability of textbook in this field of study especially in
developing country like is a different.
Hence, inspite of the fact that the published financial statement by this banks
are really seen, they are equally not comprehensive as regards the needs of a
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researcher. Some important information is not usually available for further
information cannot be overemphasizing. Some claim the compliance with their
management policies not to disclose some vital information to the public. It is a
known fact that most banking industries had their headquarters in Lagos and it
is where most decision are taking. Reading on this fact, the questionnaire sent
to some of the industries could not come back due to the irregularities in our
communication system.
However, therefore the firm (union bank Plc Enugu) was referred to
after the researcher might have compared the information available to him in
the respective banking industry that cooperate with him within the locality.
Union bank Nigeria Plc started operation in the year 1917. Union bank if
Nigeria Plc Enugu has five (5) branches in Enugu
DEFINITION OF TERMS
The general ideal of this work “ The role of financial manager in a
corporate organization looks into the following perspectives;
Chapters one give the general explanation of the subject from the historical
perspective, organizational goals, and statement of problem, goal and
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objectives.Significance of the study and limitation and limitation and research
hypothesis
Chapter tow – literature review from the general. Overview, financial ratio and
profit planning management of current asset, budgeting and investment and
management of current asset, budgeting and managing the financial and
management of short and medium term.
The financial management involves all activities of the financial manager
concerned with raising of capital, planning cash an credit requirement
including the effective of the control system as the financial recourses. The
activities could be selected as follows (a) converting forecast into planes and
budget
(b) Planning the appropriate capital structure
Chapter two, literature reviews from the general overview, financial ratio and
profit planning management of current assets, budgeting and financial analysis.
Budgeting and investing. Managing of small financial strut and mangling f
short and long term financing.
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Chapter three deals with the research methodology conducted and consulted
from the flow. Personal interview, secondary source of data, questionnaire
hypothesis test and empirical analysis of the named company.
However, the chapter four deals with the discussion of result through financial
ratio analysis, hypothesis testing and implication of the result
On the other hand chapter five look into the summary, conclusion and
recommendation respectively finally followed by bibliography, glossary and
appendix
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REFERENCE
Chris C. Nwabueze (2000): principal of cooperate financial management
Nigeria. P.9, 12,8 and 17
Igboa Matori (1979): introduction to financial management London. P.5
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