WORKING CAPITAL MANAGEMENT AS A TOOL FOR COST MINIMIZATION AND PROFIT MAXIMIZATION (A CASE STUDY OF ANAMBRA MOTOR MANUFACTURING COMPANY ENUGU)

WORKING CAPITAL MANAGEMENT AS A TOOL FOR COST MINIMIZATION AND PROFIT MAXIMIZATION (A CASE STUDY OF ANAMBRA MOTOR MANUFACTURING COMPANY ENUGU)

ABSTRACT

The objective of this research work contains working capital management as a tool for minimization and profit maximization with particular reference to Anambra motor manufacturing company, Enugu. The research design used was the survey method and the sources of data were both primary and secondary. The primary sources were interviews granted to me while the secondary sources of data were obtained from related literatures viz text books, internet, journals by different authors. Primary sources were from interviews and questionnaires. The data, Hypotheses were tested using chi-square. From the researchers findings, it is seen that profitability of a firm depend on the level of its working capital management. Although working capital management is creating problems in today’s business environment due to global developments of science and applied in business but ANAMMCO tries here best and maintained her liquidity position. The researcher would recommend that seminars and workshops be organized for the staff and management of the company on the effect and merits of effective and efficient working capital management.

CHAPTER ONE

INTRODUCTION

1.1     BACKGROUND OF THE STUDY

Capital can be classified into two broad categories based on tenure viz. long term and short term capital.

The long term capital of firms is committed to investment in fixed assets. It includes shareholders’ funds and long term loans. On the other hand, short term capital is applied for investment in current assets such as cash, marketable securities and short- term credits. Current assets are usually acquired very often in varying quantities depending on the demand structure for the firm’s product. Each time a decision to acquire current assets is taken, finance becomes inevitable.

However, it does not necessarily mean that cash has to be paid each time an order for recurrent production input is placed, rather it implies that just like in the case of fixed assets, every decision on current assets has financial implications. For instance, a firm has…

WORKING CAPITAL MANAGEMENT AS A TOOL FOR COST MINIMIZATION AND PROFIT MAXIMIZATION (A CASE STUDY OF ANAMBRA MOTOR MANUFACTURING COMPANY ENUGU)