ABSTRACT

In response to my topic financial management in medium scale enterprises government has sought to promote medium scale Enterprises as a strategy for self-reliant industrialization.      It is observed that the distress to establish medium scale enterprises is the underlying factor of an individual action to help the developing country as a whole. Finance has been as the life blood of any enterprise. Every business organization needs finance to invest in operations to pay it obligation as they become due to and to provide rheum to individuals. This project is segmented in to five. The first chapters contain the introductions, objectives of the study, significant of the study etc. The literature review form part of the chapter two, financial management in medium scale enterprises is also use. Chapter three contain population of the study etc. Chapter four contains the presentation and analysis of the data also statistical treatment and analysis. Finally chapter five contains summary and conclusion, Recommendation bibliography and appendix.

TABLE OF CONTENT

Title Page                                                              ii

Certification                                                           iii

Dedication                                                             iv

Acknowledgement                                                   v

Abstract                                                                vi

Table of Contents                                                   vii

CHAPTER ONE:

1.0  INTRODUCTION                                            1

• Background of the study 2
• Statement of the study 4
• Objectives of the study 5
• Research Questions 7
• Significance of the Study 8
• Scope of the study 10
• Limitations of the study 10
• Definition of Terms 11

CHAPTER TWO

• Review of Related Literature 13
• The Proper and Effective financial management 14
• What Medium Scale Firms Are 15
• Relationship to the Study 16
• Problem of the Medium Scale Firm 17
• The problem of improper management of finance 18
• Ways to ensure availability of finance

for business operation                                        20

2.8  Relationship to the study                                     21

2.9  Theoretical Framework                                         23

2.10 Basic Financial management                                 27

2.11 Components of Finance Flow Statement                  30

2.12 Features of Good Financial management                 32

2.13 Finance Collection and Disbursement                      35

2.14 Way Forward for a Distressed Financial managemen 39

References

CHAPTER THREE:

3.1  Research Design                                              44

3.2  Population of the study                                     44

3.4  Sample and Sampling Procedure                         46

3.5  Sources of Data                                               47

3.6  Methods of Data Collection                                48

3.7  Method of Data Analysis                                    50

CHAPTER FOUR:

• Presentation and Analysis of Data 51
• Statistical Treatment and Analysis of Data 57

CHAPTER FIVE:

• Summary of Findings 71
• Recommendation 76
• Conclusions 79

Bibliography

Appendix

CHAPTER ONE

INTRODUCTION

1.0 INTRODUCTION

Finance is the science of funds management, or the allocation of assets and liabilities over time under conditions of certainty and uncertainty.  The key point in finance is the time value of money which stated based on their risk level, and expected rate of return. Finance can be broken into three different categories: Public, corporate and personal finance .

Public finance describes finance as it related to   sovereign states and sub-national entities eg. States and provinces, countries, municipalities, etc and related public entities eg. School districts or agencies.

Public finance is concerned with:

1. Identification of required expenditure of a public sector entity.
2. Sources of that entity’s revenue

• The budgeting process

1. Debt issues

Corporate finance: This is the area of finance that deals with the source of funding and the capital structure of coporations and the actions that managers take to increase the value of the firm to the shareholders, as well as the tools and analysis used to allocate financial resources.

Corporate finance also includes within its scope business valuation, stock investing or investment management.

Personal finance involves paying for education, financing durable goods such as real estate and cars, buying insurance, paying for a loan or debt obligation etc.

On the other hand, management in all business and organizational activities is the act of coordinating the efforts of people to accomplish desired goals and objectives using available resources efficiently and effectively.  Management comprises planning, organizing, staffing, leading, or directing and controlling.

Financial management means the efficient and effective management of money (fund) in such a manner as to accomplish the objectives of the organization it includes how to raise the capital, how to allocate it ie, capital budgeting. Not only about long term budgeting but also how to allocate the short term resources like current assets.

Finance has been as the life blood of any enterprises every business organization needs finance to invest in operations, to pay it obligations as they become due to and provide return to individuals.

1.1  BACKGROUND TO THE STUDY

History of various developing countries has shown that industrial revolution had been the main brain behind their economic survival their great financial strength was built up principally through the acquisition of industrial and technological power.  Medium scale firms indisputably constitute the bed rock for meaningful industrialization and consequently the acquisition of industrial and technological power.  Without exception all sign industrial organizations either multinational or indigenous started in a small way or their own various levels.

It is observed that the distress to establish medium scale enterprises is the underlying factor of an individual action to help the developing country as a whole.  It is the largest single programmed and one of the municipal instruments of community development.  To sustain the continuity of a medium scale enterprises though cash and its effective utilization is a necessity.  Cash has been as the life, blood of any enterprises.  Every business organization needs cash to invest in operations, to pay it’s obligation as they become due to and to provide rheum to investors in the form of interest and individuals.  Cash is the money which a business organization and disburse immediately without any restriction. What is regarded as cash, with regards to a medium scale firm, undertaking includes coins, currency and cheques held by an organization and balances in it’s bank accounts and marketable securities or bank fine deposits, all being equivalent of cash since cash is one of the most useful resources of any organization, it is necessary to special attention to cash to ensure it’s proper utilization.

Mr Biggs, a reputable medium scale firm in Enugu Metropolis concentrates on the production of high quality bread, cakes, snack and all kind of food out side the buying and selling out fit.  Concentration of many other medium scale firm, quicker and more money by buying and selling satainly, this is only for a short period but it ensures a longer and lasting profit.

However, noticeable features of medium scale firm are that of concentration in the hands of one or a few persons.  These people exercise most of the controls necessary for running the firms and because they are directly involved on the business the nature of control differs from what would be expected in a big organization where ownership and management are separated and an elaborate administration structure is a necessity.

• STATEMENT OF PROBLEMS

Medium scale enterprises have been identified as a basic tool for rural development.  They have taken a turn for the better sense in the past decades.  The prospect for this decade and subsequence decade are bright.  The enterprising in geniality and enthusiasm of any Nigerians are great challenge to the development of the country as a whole.

To achieve this depends solely on the proper management of medium scale firms, taking up to the challenge from internal sourcing of solution. This study titled “financial management in medium scale enterprises” a case study of Mr Biggs Enugu attempts to determine:-

1. Procedure for establishing and managing medium scale firm.
2. Good accounting records needed for proper financial management.

• Internal control system as a necessity for effective and proper financial management in medium scale enterprises.

1. Financial management tools in medium scale firms.
2. Financial management practices in medium firms.
3. Personnel requirement for the financial management function.

• OBJECTIVE OF THE STUDY

The main objective of the study is enumerated below as follows:-

1. To find out some aid technique to proper financial management in medium scale enterprises.
2. To find out good financial records and bookkeeping which would enhance the expansion of financial management in medium scale firms?

• To determine the effect of improper finance utilization in medium scale firms.

1. To determine the major cause of improper financial management in the medium scale enterprises.
2. To recommend what roles the promoters of medium scale and financial institutions should play towards effective, efficient and proper finance utilization in medium scale enterprises.
3. To create awareness of the important of proper financial management among medium scale enterprises.

• To suggest and make possible recommendation aided at eliminating the problems militating against proper financial management in medium scale establishment from examination of financial management techniques of medium scale firms. The project writer will highlight the constraints against successful financial management of medium scale firm and their recommendation for improvement.

Finally, this study would be a great significant to the project writer since it will endow her with the articulation of her duties as an accountant in any business organization.

• RESEARCH QUESTON

1. Are some aid techniques necessary for proper financial management in medium scale enterprises?
2. Can good financial records and book keeping help to enhance the expansion of financial management in medium scale firms?

• Do you think the improper finance utilization affects the medium scale firm as a whole?

1. Can the major cause of improper financial management in medium scale enterprises be determined?
2. Can the creation of awareness of proper financial management be important among medium enterprises?
3. What roles can the promoters of medium scale and financial institution? Plays towards effective, efficient and proper finance utilization in medium scale enterprises.

• SIGNIFICANCE OF THE STUDY

It is expected that this study would be of vital benefit to a member of entrepreneurs, businessmen and organizations in the following ways:-

1. This study should provide it’s numerous reader with a clear insight into the financial management function of medium scale enterprises.
2. This study shall create awareness of the importance of proper financial management among our medium scale enterprises.

• It equally provide a basis for further studies into other aspect of finance utilization in medium scale enterprises.

1. The study will benefit the businessmen, entrepreneurs and organizations in particular since it would expose them to the possible aid techniques of financial management.
2. It is also expected that business consultants would benefit from this study. Since it would give them a clear insight into the efficient utilization of limited resources of medium scale enterprise.

1.6  SCOPE OF THE STUDY

The study titled “financial management in medium scale firms” could have been extended to cover the whole of Enugu Metropolis and beyond all aspect for the problems of medium enterprises, but due to the huge financial requirement involved, coupled with the short time frame within which the study must be conducted, and completed, the author was compelled to limit the scope of medium firm using Mr. Biggs’s Enugu as a case study.

• LIMITATION OF STUDY

Due to academic stress and lack of adequate fund or fund or finance, I the researcher could not reach as many as organizations where adequate information’s could be ascertained.

• DEFINITION OF TERMS

At this stage, the author finds it necessary to defined and explain some of the terms, which have been used in the course of this study.

• Medium Scale Enterprises (M.S.E): There are as many definitions of medium scale enterprises (MSES) as there are experts on the subject. “The Nigerian Industrial policy describes medium scale enterprise as those with total investment of between N100,00 and N2million exclusive of land but including working capital. Central Bank of Nigeria described medium scale enterprise or firm as those capital investment which does not exceed N5 million including land and working capital whose turnover are not more than N25 million annually.

“The Company and Allied Matter – Decree (CAMD) no. 1 of 1990 section 376⁽²⁾ depress a medium scale enterprises as an enterprises whose annual turnover is not more than N2 million or whose net value (Net worth) is not more than N1 million.

In this project work, I the author defines medium scale enterprise or firm as those with capital structure of not more than one or few persons than N500,000 which are owned, managed and controlled by and whose side does not permit for elaborate administrative structure.

–      Financial Management: This is defined ad the process of conserving finance and optimizing finance.  How to be able to meet obligation as and when due the and generally raising the awareness of finance cost in every area of business activity.

–      Financial Management Tools: These are several techniques developed by the treasuring department of major companies for managing the flow of finance.

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