The project research work on “The Impact of Effective Working Capital Management on Company Performance in a Depressed Economy" was embarked on to check the profitability and liquidity problems existing in some companies that lack the working capital management acumen.
It was because of this deficiency in some companies that brought about the above quoted topic. Taking Unilever Nig. Plc as a case study.
The need for working capital management cannot be overemphasized. The objective of financial decision-making is to maximize shareholder wealth. However, the objective of this study was to identify and discuss the basic determinants of working capital and to highlight areas of short-term investment of the company. It was also aimed at suggesting ways for improving insufficient cash balances to meet current obligations. Short-term survival and success of any firm is dependent on right financial management decision-making. This is because working capital is one the most important aspects of financial management.
The materials used in this research work were by means of review of related literature, personal interview and observations, issue of questionnaires. The data collected through these means were analyzed with analytical tools like percentages, descriptive tables, chi-square, and distribution tables.
All these were not achieved without hitches. The following were limitations to this research work. They include: Bureaucracy, delay in responding to questionnaires, errors in questionnaires returned, proximity, running cost, etc.
Conclusively, working capital management policies are practices that have significant influence on companies solvency and profitability. Maintaining a large size of current assets improved the liquidity position of the company.
The working capital management was aimed at striking a balance by ensuring that the right combination of current assets and liabilities were held at each point in time.
TABLE OF CONTENTS
Table of ContentsX
1.1Overview of the problem1
1.2Statement of the problem4
1.3Purpose of the study5
1.4Significance of the study7
1.5Scope of the study8
1.6Limitation of the study8
2.2Need for Effective Working Capital15
2.3Determination of Working Capital23
2.5Nature and Size of Business24
2.6Growth and Expansion Activities25
2.8Motives for Holding Cash27
2.12The Economic Order Quantity Model37
3.2Sources of Data54
3.3Data Analysis Technique55
3.4Validity of Response/Reliability of Data58
3.5Assumptions of the Study.58
4.0Presentation and Analysis of Data60
4.3Distribution and Return of Questionnaires62
4.4Analysis and Interpretation of Relevant Questionnaires
Summary of Findings, Recommendation and Conclusion
5.1Summary of Findings
5.4Suggestions for further research