ABSTRACT
This
project is poised at x-raying the degree of the role of financial management in
a co-operate organization making reference to union bank (Plc) Enugu. Financial
management activity is concern with the raising of capital planning cash and
credit control including the effective control of financial resources. Some
thought were giving to financial activity to provide planning, control and
execution of financial activity. The practice management are interest in this
subject because among the most crucial decision of he firm are those which
relates to the finance and therefore need to understand the financial
management which provide them with conceptual and analytical insight to make
these decision. The financial must take step to ensure that fund will be
actually available and committed to the firm. The financial manager is usually
responsible of he gathering and analyzing of the relevant information, making
forecast of the profit level to estimate profit from the future sale, the firm
must be aware of the current cost and the most likely changes in the ability of
the firm to sale its product as planned.
The financial manager must measure the
requirement return of its capital investment by answering this questions; dose
the level of return offer adequate justify and that Of risk therein? H e is
required to know the rate of return that is expected from the proposal before
it is accepted. The financial personnel meet with other officer of the form and
anticipate in making decision affecting the current and future utilization of
the fund resource. The manager will discuses the total amount of asset needed
by the firm to carry out its operation and determine the decomposition on need.
They identify ways to use the existing asset mostly effectively and thereby
reducing waste and needed expense. The decision making role cause liquidity and
profitability
The role of financial management in
managing the funds available o the firm. The fund include cash held by the
firm, money borrowed and money gained from the
Purchase of common stock and preferred
stock. The financial management is responsible for having sufficient for the
firm to conduct its business and pay its bill and a lot of money to finance the
receivable and invention making arrangement for the purchase of asset and
identify sources of long term financing, in fact this study is aimed at the
information on the role of financial manager in any organization to foster his
performance in the following.
Forecasting on the financial planning and
control financial analysis. Working credit capital. Stock cash receivable
market and structure medium short and long term success of fund and evaluation
of stock and cost of capital financing. Divided policy and techniques of r
capital investment analysis.
This issue of whether this state role of
the financial manager is executed or not in case to be investigated by the research
is in the following perspective,
(i)
Budgeting
and financial analysis
(ii)
Management
of short, medium and long term financing
(iii)
Financial
ratio and planning
(iv)
Managing
and financial structure
The researcher will analysis the financial
concept using the annalistically tools and techniques obtained from the
organization answer receive from the questionnaire to unfold the financial
managers decision on financial matters.
It hope that the project will attained the
standard required by all the examining bodies and also satisfy the curiosity of
the general leading public who may have the desire to become acquainted.
TABLE OF CONTENTS
Title
page
Approval
page
Dedication
Acknowledgement
Abstract
Table
of contents
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
CHAPTER
TWO:
2.1
REVIEW OF THE RELATED LITERATURE
2.2 GENERAL REVIEW
2.3 FINANCIAL RATIOS AND PROFIT PLANNING
2.4 BUDGETING AND INVESTMENT ANALYSIS
2.5 MANAGING THE FINANCIAL STRUCTURE
2.6 REFERENCES
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
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
CHAPTER
ONE
1.0 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
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
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
(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 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 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
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.
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
financial manager should take cognizance of environmental factors that affect
their decision.
1.1 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 divided into 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.
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;
(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
1.2 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;
(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 manage 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.
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.
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.
1.3 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
Ho: the level of debt 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.
1.4 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, in spite 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 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
1.5 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 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.
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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