IMPACT OF EFFECTIVE FINANCIAL MANAGEMENT ON THE PERFORMANCE OF BUSINESS ENTERPRISES IN NIGERIA (A CASE STUDY OF GUINNESS NIGERIA PLC)

ABSTRACT

The  aim  of  this  research  project   is   to  evaluate  the  impact  of  effective financial ﾿ management   on  business  performance.   Guinness  Nigeria  Plcwas used   as a  case study.  Presentation  and  critical  analysis  of different   views and    opinion   of  writers   and  authors   as  generally   devoted   review  some existing   literature   on financial   management    secondary  data  was  used  as the   method   of  data  collection  through   the  sample  of  10 years  financial statement    of  Guinness  Nigeria  Pie   spanning  from   2005-2014   which  has

been     audited   and  confirmed   accurate   and  then   posted  to  mternet.  In hypothesis  testing  multiple  regression was used. From the findings it  as found   out that component of financial  management of debt turn over, debt equity.  Stock turnover  and acid test ratio has no effect on the performance of a  business enterprise. From the findings  it as recommended that;  the various financial  management component  should  be effectively  used or applied  in the management of business enterprises and that active financial manager  should be employed who must know the best way to combine the component of financial  management  with other items in the financial statement.  Good   incentives should be given to financial managers as   a motivation to effectively apply or use these financial management tools or components. The financial performance of the these enterprises cannot be assessed  without  to reports of these financial statement. Therefore these business   enterprise should be required to  submit their  audited accounts regularly  to the  legislative   or any other authority  it may be accountable to this  will  go  a   long  way  to  ensure that  these components of  financial management are effectively used. 

TABLE OF CONTENTS

 Title page                                                                                                       i

Declaration                                                                                                           ii 

Certification                                                                                                         iii 

Dedication                                                                                                       iv

 Acknowledgment                                                                                           ·v 

Table  of Contents                                                                                          vi 

List  of Tables                                                                                                  vii 

List  of Hypothesis                                                                                          viii 

Abstract                                                                                                           xi

CHAPTER  ONE

INTRODUCTION

LO  Background  of the Study                                                                    1

1.1     Statement  of Problems                                                                       4

1.2    Objectives-of  the  Study                                                                        6'

1.3    Research Questions                                                                             6 

1.4 Statement  of Hypothesis ﾿

1.5 ﾿ Significant  of the Study ﾿

1.6 ﾿ Scope of the study ﾿

l.7 ﾿ Limitation  of the study ﾿ 10

1.8 ﾿ Definition  of Terms ﾿ 11

CHAPTER TWO

Review  of Related Literature ﾿

2.1 ﾿ Conceptual  Framework  of Financial Management ﾿ Practices and

﾿ the Performance  of Business Enterprises ﾿ 15

2.2 ﾿ The Need for  Financial Management ﾿ 16

2.2.4 ﾿ The Nature of Financial Management ﾿ 17

2.3 ﾿ Function of Financial Management ﾿ 18

2.3.1 ﾿ Financial   Decision ﾿ 19

2.3.2 ﾿ Investment   Decision ﾿ 19

2.3.3 ﾿ Divided   Decision ﾿ .       19

2.3.4 ﾿ Liquidity  Decision  · · ﾿ 20

2.4 ﾿ The Goal of the Firm Maximization  of Profit ﾿ 20

2.4.1 ﾿ Profit  Maximization    Versus Wealth  Maximization ﾿ 22

2.4.2 ﾿ Maximization  of Sales ﾿ 23

2.4.3 ﾿ Minimize Risk ﾿ 24

2.4.4 ﾿ Maximization   of Share Price ﾿ 24

2.4.5 ﾿ Social Goal ﾿ 25

2.5 ﾿ The Environment  for Financial Management ﾿ 25

2.6 ﾿ Importance  of Finance ﾿ 27

2.6.1 ﾿ Functions of the Financial Manager ﾿ 28

2.6.2 ﾿ Risk  and Return  Trade  off Framework   of Financial Management ﾿

2.6.3 ﾿ Financial    Perception   of Financial    Management ﾿ 34

2.6.4 ﾿ Changing  Role of Financial Management ﾿ 35

2.7 ﾿ Working  Capital  of a Business Enterprise ﾿ 37

2.7.1 ﾿ Gross Working  Capital ﾿ 37.

2.7.2 ﾿ Net Working  Capital ﾿ 38

2.8 ﾿ Capital  Structure  of Business Enterprise ﾿ 38

2.9 ﾿ Financial ﾿ Planning and  Strategy ﾿ 39

 2.9.1 ﾿ Financial/ ﾿ Accounting  Ratios ﾿ 42

2.9.2 ﾿ Classificat ﾿ ion   of Accounting  Ratio ﾿ 40

CHAPTER THREE

3. Research Methodology ﾿

3.1 ﾿ Research Design ﾿ 42

3.2 ﾿ Population   of the Study ﾿ 43

3.3 ﾿ Sample/Sampling    Techniques ﾿ 43

3.4 ﾿ Data Collection and Procedure ﾿ 43

3.5 ﾿ Validity  and reliability   of the  Instrument ﾿ 44

3.6 ﾿ Data Analysis Technique ﾿ 44

CHAPTER ﾿ FOUR ﾿

4.0 ﾿ Data Presentation  and Analysis ﾿ 46 ﾿ ,

1t .  1 ﾿ Data Presentation ﾿ 46

CHAPTER ﾿ FIVE ﾿

5.0 ﾿ Summary  of Findings Conclusion and Recommendation ﾿

5.1 ﾿ Summary   of Findings ﾿ 56

5.2 ﾿ Conclusion ﾿ 57

5.3 ﾿ Recommendations ﾿ 59

References ﾿

Appendix ﾿