Impact Of Credit Management on Profitability Of Manufacturing Firm (A Study of Unilever, Portharcourt)

ABSTRACT

The impact of credit management on the profitability of manufacturing sector, a study of Unilever Nigeria Plc, Port Harcourt, Rivers State from 2012 – 2018 was examined. The specific objectives of the study were to; ascertain the effect of debt ratio on return on assets, determine the effect of gearing ratio on return on assets

TABLE OF CONTENTS

Cover Page                                                                                                                                     Title page                                                                                                                         i

Declaration                                                                                                                              ii

Certification                                                                                                                            iii

Dedication                                                                                                                              iv

Acknowledgement                                                                                                                  v

Table of contents                                                                                                                    vi

List of Tables                                                                                                                          x

Abstract                                                                                                                                  xi

 

CHAPTER ONE: INTRODUCTION 

1.1       Background of the Study                                                                                           1

1.2       Statement of the problem                                                                                           4

1.3       Objectives of the study                                                                                               4

1.4              Research question                                                                                                       5

1.5              Hypothesis of the study                                                                                              5

1.6       Significant of the Study                                                                                             5

1.7       Scope of Study                                                                                                           6

1.8.      Limitation of the Study                                                                                              6

1.9.      Definition of Terms                                                                                                    6

 

CHAPTER TWO: RELATED LITERATURE

2.1       Conceptual framework                                                                                               8

2.1.1    Credit Management                                                                                                    8

2.1.2    Process of credit management                                                                                    8

2.1.3    Credit collection techniques                                                                                       9

2.1.4    Credit management concept in Nigeria                                                                      11

2.1.5    Impact of Credit Management on Firm profitability                                                  12

2.1.6    Credit Policy                                                                                                               13

2.1.7    Setting credit policy and regulation                                                                            15

2.1.8    Firm`s Profitability                                                                                                      16

2.1.9    Credit/Lending Policy Formulation                                                                            18

2.1.10  Criteria for loan/credit decision and its effect on profitability                                   19

2.1.11  Credit Management and Firm Profitability                                                                20

2.1.12  Credit Granting Decision and Firm Profitability                                                        20

2.1.13 Reasons for Granting Credit                                                                                       20

2.1.14 Return on assets                                                                                                          21

2:1.15 Credit Management                                                                                                    22

2.1.16 Credit Policy                                                                                                               24

2.1.17 Debtor`s turnover/account receivable                                                                         25

2.1.18  Liquidity management                                                                                                27

2.1.19  Debt Ratio                                                                                                                  28

2.1.20  Gearing ratio                                                                                                               29

2.1.21  Cash flow Ratio                                                                                                          31

2.2       Theoretical Framework                                                                                               31

2:2:1    Transactions Costs Theory                                                                                          31

2:2:2    Portfolio Theory                                                                                                          32

2:2:4    Information Theory                                                                                                     33

2.3       Empirical Related Studies                                                                                          34

2:3:1    Liquidity Management and Firm Profitability                                                            35

2:3:2    Credit Policy and Firm Profitability                                                                           35

2:3:1   Debtors Turnover and Firms Profitability                                                                    36

2.4     Summary of Related Literature                                                                                                37

CHAPTER THREE: METHODOLOGY

3.1       Research Design                                                                                                         38

3.2       Study Area                                                                                                                  38

3.3       Sources of Data Collection                                                                                         39

3.4       Method of Data Analysis                                                                                          39

3.5       Model Specification                                                                                                    40

3.6       Sample and Sampling Method                                                                                    41

3.7       Data Analysis techniques                                                                                            41

CHAPTER FOUR: DATA PRESENTATION, ANALYSIS AND DISCUSSION OF FINDINGS

4.1       Data Presentation                                                                                                        46

4.2       Data analysis                                                                                                               46

4.3       Test of hypotheses                                                                                                      49

4.4       Discussion of findings                                                                                                50

CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1       Summary of Findings                                                                                                 51

5.2       Conclusion                                                                                                                  52

5.3.      Recommendations                                                                                                      52

REFERENCES