TABLE OF CONTENTS
Approval page ii
1.1. Background of study
1.2. Objectives of study
1.3. Statement of problems
1.4. Scope of study
1.5. Research questions
1.7. Significance of study
Review of literature
Evaluating financial performance of a company
Internal control systems in accounting procedures
3.1 Research design
Area of study
Population of study
Sample and sampling procedures
Instrument for data collection
Validation of the instrument
Reliability of the instrument
Method of data collection or administration of instrument
Method of data analysis
Date presentation and analysis
4.1 Test of hypothesis
4.2 Summary of results
Discussion, implication, recommendation
5.1 Discussion of result
5.3 Implication of the result
5.5 suggestions for further research
5.6 limitation of the study
Almost all kinds of
business activities directly or indirectly involve the acquisition and use of
funds. There exists an inseparable
relationship between finance on the hard and production and other functions on
the other. In a business set up, the
functions of recruitment and promotion of employees are clearly the work of the
promotion policies come within the functions of the marketing department. These activities performed by these
departments (personnel and marketing departments) require outlay of funds and
therefore affect resources. The finance
function of raising and using money although has a significant effect on other
functions but it need not necessary limited the general running of the
business. Generally firms formulate
their policies (marketing productions, personnel and other policies) most of
the time, to tally with the financial resources of the company available to
The word “Finance” is viewed from different perspective
by different group thus: -
A layman sees finance as the volume of money in his
prose, vault and at the bank.
Investors sees finance as the provision of funds as at
the time it is need for investment. It
goes beyond coursing and applying the fund for profit maximization as well as
the state of sharing the profits.
Academic sees finance as the science of fund management.
investor view about finance shall be upheld in this write up. This because it emphasizes on profit making
for the maximization of shareholders wealth.
Wealth maximization is one of the corporate financial objectives of a
firms. This can only be achieved by
efficient and effective management of the company’s resources.
Financial management involves all the
activities that are concerned with planning cash and credit requirement,
including the effective control of the financial resources
The activities could be segregated
the future availability of and requirements of cash
Converting forecasts into plans and budgets
Planning the appropriate capita structure
Raising of cash from outside the business
Controlling cash balances and flows in accordance with
plans and changing circumstances
Investing surplus fund
financial planning, this involves estimating and
of the future flow of cash receipt and disbursements. Also this is useful in
raising of funds organizing and ensuring that funds necessary for carrying on
the operation of planning is available.
The wise use of funds by allocating such funds ensuring efficient use of
In financial controlling, monitoring financial operations
to ensure that cash flows are proceeding according to plan.
company is part of financial community, its financial management can be fully
interpreted only within the context created by the workings of financial
institutions and markers.
The variables considered in the framework of financial
The financial goals of the company
The valuation of the company and the extent to which this
valuations uninfluenced by company decision.
The means of measuring the performance of the
company. When it goals have been
identified and the method of valuation chosen, the company’s performance must
be monitored and measured accordingly.
researcher here wants to access the financial health of
manufacturing industry, its strengths, weaknesses, recent performances, future
prospects and the implementation of its financial policies. This involves a review of the financial
involves a review of financial statements followed by careful consideration of
their use in evaluating financial performance.
ASSESSING THE FINANCIAL HEALTH OF A
The most important source of information for evaluating
the financial health of a company is its financial statement consisting of a
balance sheet and a income statements. EAGLE CEMENT is a public liability
company and as required by law, it is expected to submit her annual account to
the registrar, corporate affairs commission, Abuja. The account so prepared is for the
consumption of many interest group like: the shareholders, tax authorities,
investors, creditors etc.
For the purpose of evaluating the financial health of the
company (EAGLE CEMENT), the use of financial statement for 1999 year shall be
reviewed and analyzed. See chapter four
on data presentation and analysis.
The research work is based on the NIGERIAN CEMENT Company
Plc. Nkalagu in Ebonyi State. As miller
puts it, “we cannot understand the attitude of either management of workers
unless they are seen in their historical context”. Here the history of NIGERCEM Nkalagu is
briefly narrated and derived from the management audit enquiry of NIGERCEM,
The history of NIGERCEM dates back to colonial days in
Nigeria. I the early thirties of this
century, several district officers, geologists had report tot he existence of
large deposits of limestone in Nkalagu area – various over sees had as a result
of this shown interest in working of deposit.
On 23rd August, 1954, the Nigerian government
signed an agreement with F. L Smith and company for the erection of a cement
works at Nkalagu. By the same agreement,
F. L. Smith and company limited as managing agents. The Nigerian Cement Company Limited, Nkalagu
was incorporated on 13th Novemenber 1954 to operate this cement
project. Mr. E. E. Sabben – Clare became
the first chairman of the board of directors.
On December 20, 1957, the governor general of Nigeria,
Sir, James Robertson, opened the factory officially. Commercial production commenced on 1st
Once of such investors is flour mills of Nigeria which
Chief Emmanuel Ukpabi said arrears of staff salaries alone in Nigrecem in
conservatively put at N1.4billion according to him. Liabilities to individuals
and corporate bodies are estimated at several billions of naira. He recalls that there had been desperate move
by cement importing companies to either buy wholly or acquire majority shares
of ailing cement manufacturing firms.
But they all shunned Nigercem because of the said liabilities.
Nigercem owned by the five south-eastern states ran into
hitches from the late 80’s due mainly to gross mismanagement. The development led to break down of three of
firms vital machines which remained unserviceable with the only functional one
operating at low capacity for some time until it finally got grounded. The south-east governors who are the major
investors in the company had also contemplated many options aimed at reviving
At recent meeting of the five south-eastern governors in
Owerri the Imo State capital, various options for the revival of Nigercem
topped the agenda of their parley. The
host governors Achike Udenwa who spoke with news men said Nigercem will be
privatized if the governor’s ratify is being considered for privatization. The government of the five eastern states are
already considering this in order to improve efficiency and productively.
The chairman of Nigercem “Nze Clement Maduako noted that
eastern Rukeem company limited producers of Eagle Cement, was the major
shareholder in the privated Nigercem with a controlling share of 60
percent. Expressing confidence on the
ability of new management to kick-start Nigercem now called Eagle Cement again,
he said the new board has the first general manager of the cement company as
member, while another employee of the company is expected to join the
six-member board. Member of board, who
emerged from the election conducted by the 165 shareholder in attendance were
Nze Maduako, chairman; captain I.A Hastrup, Mr. H.N Onugbogu, Mr. Coran
Wejdmark, Mr. S.A Oludemi and Dr. J.O Ojukwu.
The plant stopped production in 1999, but had a text run
in 2001 for only three months in preparation for the privatization. Some of shareholders who spoke said they had
not been paid for the past 40 months and pleaded with the new board to consider
clearing the arrears then works commences in the factory.
OF THE STUDY
The overall purpose of the study is to understand the
financial management practices that equips them with the conceptual and
analytical knowledge requires to make skillful, informed, sound, objective and
reliable decision of the company.
Specifically the objective of the study on this project is stated as
To evaluate the financial performance of EAGLE CEMENT
To evaluate the management levels of control of financial
performance of the company.
To identify the accounting systems and procedures and
check whether the financial polices of the company are implemented accordingly.
To prefer solution to ineffectiveness in financial
management of the company.
OF THE PROBLEM
is believed from the evaluation of financial status of the company that the
company is not financially healthy.
is also established that there is inefficient and ineffective management of the
equally discovered that the financial policies are not properly implemented.
financial fraud noticed. It include as follows:
Staff and management do apply for
cash advance but over spend the amount approved for them only to come back to
claim a very huge amount as their balance
Outside, manager do not allow their
official cars to be repaired by the
company’s employed mechanics. They
prefer repairing it outside only to present an inflated biill to the company
provision that all purchases should be routed through the purchasing department
is just in principle not in practice.
The company allows suppliers to
inflect the prices of their suppliers because of the interest some of them
Some supplier do after some months of
supply sent a price increase to the company for items already supplied and the
company will honour such claim.
of item, which do not agree with the specification of item actually required by
prices are unjustifiable inflated
viii. Cheque exchange granted to some staff
or managers take more than one year before it is redeemed.
1.4 SCOPE OF STUDY
The study covers the area
relating to financial manger of EAGEL CEMENT.
It also touched on the effective implementation of financial policies of
1.5 RESEARCH QUESTIONS
i. What are the levels of the financial management control of
are your accounting system and procedures relating tot he receipt and
disbursements of the company money?
i. Financial management practices EAGLE CEMENT COMPANY are not
in line with the approved policy
accounting procedures are not in line with the approved policy
internal control system of the company are not in line with the establishment
1.7 THE SIGNIFICANCE OF THE STUDY
study will reveal the ineffectiveness of financial management practices in the
study will equally reveal the weaknesses in the internal control system of the
study will also over haul the accounting procedures of the company as to see
how adequate they are.