the-role-of-financial-management-in-a-co-operative-organisation (1).doc

7/27/2019 the-role-of-financial-management-in-a-co-operative-organisation (1).doc

1/30

THE ROLE OF FINANCIAL

MANAGEMENT IN A CO-OPERATIVE

ORGANIZATION

1


2/30


3/30

CHAPTER TWO:

2.1 REVIEW OF THE RELATED LITERATURE

2.2 GENERAL REVIEW

2.3 FICNAIL RATIOS AND PROFIT PLANNING

2.4 BUGETING AND INVESTMENT ANALYSIS

2.5 MANAGIN THE FINANCIAL STRUCTURE

2.6 REFRENCE

CHAPTER THREE

3.1 RESEARCH DESIGN AND METHODOLOGY

3.2 SOURCE OF DATA

3.3 PRIMARY

3.4 SECONDARY DATA

3.5 SAMPLE USED

3.6 METHOD OF INVESTIGATION

3


4/30

CHAPTER FOUR

4.1 DATA ANALYSIS AND INTERPRETATION

4.2 DATA PRESENTATION AND ANALYSIS

4.3 TEST OF HYPOTHESIS

CHAPTER FIVE

SUMMARY, FINDINGS, CONCLUSION AND RECOMMENDATION

5.1 SUMMARY OF THE FINDINGS

5.2 CONCLUSION

5.3 RECOMMENDATION

BIBLIOGRAPHY

APPENDIX / QUESTIONNAIRE

4


5/30

CHAPTER ONE

INTRODUCTION

Financial management involves all the activity

of the financial managers concern with the rising of

capital lining cash and credit requirement including

the effective control of financial resources

The activity could be suggested as follows;

1.Converting forecast into planned and budget

2.Planning the appropriate capital structure

3.Raising cash flow outside the business

4.Forecasting the future

5.Investing surplus fund

6.Controlling the cash balance and flow in

accordance with plans and with changing

circumstance.

5


6/30

7.With the emergency of finance as a separate

field emphasis was more or less on legal matters

such as mergers

FORMATION OF NEW COMPANY DISPOSAL AND CONSOLIDATION

With the most vital problem of the firm was

identification of the means for raising capital for

possible expansion due to the increasing wave in

industrialization. The mobility of fund from the

Areas of surplus to the areas of scarcity posed a lot

of problem. Because of the radical changes which

ochre during the depression of 1930 which culminated

into the failure of many business finance which re-

directed to bankruptcy, reorganization and liquidity

for profitability under the imperfect perfect

competition continues to be the motivation to

maximize the profit and wealth of the owner. To ague

to maximize profit has led to he study of financial

6


7/30

management of which attribute factor can be

socialized as follows;

(a) Saving

(b) Business growth

(c) Inflation

(d) Competitive

Base on the above background, some through was giving

a financial management to provide skillful planning

control and execution of financial management

activity.

The practicing managers are interested in this

study because among the most crucial decision of the

firm are of those which relates to the financial

matters and so are giving better treatments for

better understanding of financial management which

provide them with conceptual and annalistically

7


8/30

insight on the capital fund and using the capital

fund are called financial function of any firm

GOALS AND OBJECTIVE OF THE FINANCIAL MANAGERS

Financial which is the life wire of any business

and as developed in 1900 since it concerns the actual

flow of money as well as any claim against money. The

financial mangers subsequent decision is made in such

more co-ordinate manner responsible for the control

system. The financial managers are concern with;

(a) Financial planning with the bank

(b) Raising of fund

(c) Allocation of fund

(d) Financial controlling of fund

(e) Interpretation

FINANCIAL PLANNING

8


9/30

The involve he estimating and planning of the

future flow of cash receipt and disbursement raising

of fund involve organizing the raising of fund which

involve the funding necessary for planning. The

second is the acquisition of the fund. There are a

wide variety if the fund. It has certain

characteristic as cost maturity, availability. The

encumbrance of asset and other terms exposed by the

capital.

On the bases of this function, the financial

managers of a bank must determine the best mix of

finance for the banking industry. Therefore the

financial managers have to take the issue of

formulation of policies. In the interest of such

policy is to plane, co-ordinate, motivate and control

activities of the firm, which are responsible of the

efficient financial management of the resources. An

efficient financial management thus is the same as a

9


10/30

valuable aid to the process of decision-making and a

major contributing to the pale and a major

contribution to the pale of economic. The principal

responsibility of financial managers involves a

theory evaluation of investment financial and

dividend decision with the sole aim of maximizing

wealth. The financial managers studies the

annalistically techniques and the environment where

financial decision are made.

The financial manager keeps accurate account and

records of, preparing the cost, providing the means

for payment of bills, procuring additional in case of

cash needed. Investing fund in asset and procuring

the bets means of financing in relation to the

overall development of the organization. The task of

the financial manager is invisibly faced with problem

with those of profitability, liquidity and risk

10


11/30

factor, which influence both internal and external

environment.

Only sound financial decision based on the

analysis, planning and control of activity therefore

can help optimized the values of operational

optimization of the profit and shareholders wealth in

one of those guiding.

Objective of business enterprise, which its

allocation of resource and the financial decision for

the financial manager. The financial manager must be

aware of sources of finding the business and be

guided by time, selection and combination of those

available. That is the financial manager dilemma and

the principle of sustainability. The financial

managers dilemma is that of profitability and

liquidity while sustainability is the principle of

time balancing with asset and liability that is using

short time term liability to financial short term

11


12/30

asset and long term liability to finance the long

term asset.

ALLOCATION OF FUND

Wise use of fund is allocating such fund in such

project or such venture that will yield optimal

return ensuring efficient use of fund. The financial

managers ensure the efficient allocation of fund

among the various uses. The allocation must be in

accordance with the underlying objective of the firm

to maximize the profit in the customers wealth. The

role of financial manager has expanded of the

management of the working capital to long-term asset

and liabilities. He is concern with ways of efficient

managing this current asset in order to maximize

efficient profitability relative to the amount of

fund tied up in the asset

12


13/30

FINANCIAL CONTROLLING

Financial monitor financial operation to ensure

the cash flow are proceeding according to the plane

INTERPRETATION

The bank is part of financial community. It

financial management can be fully interpreted only

with the contest by he working of the financial

institution and the markets

ORGANIZATIONAL GOALS

Since this project is concern with the role of

financial managers in a cooperate organization,

therefore, it is important to note the goal of any

financial.

Maximization of profit. This is the frequency

encountered goals of any business impact all business

13


14/30

believed that as long as they are earning as much as

possible while holding down cost, they are archiving

the goal of profit maximization appears performance.

b. Maximization of wealth the main objective of

financial management is the maximization is

accomplished by maximizing the sum of the present

value of the stream of dividends received and the

present value of the increased in the market values

of the shares of stocks held by the shareholders.

Thus, the apparent wealth maximization is the best

economic objective shareholders as the owns and for

the bank whose primary interest is to customers own.

The environmental scope of financial manager in

executing their job, Financial managers do not have

absolute authority in carrying out their

responsibilities their actions are constrained by

certain factors beyond their control.

14


15/30

THESE FACTORS ARE DIVIDED INTO TWO

a. Internal environment factor the principal factor

in this case is the unavailability or the lack

of human resources and the organizational self

imposed standard.

b. B. The external environment factor such as the

political legal framework cultural and social

values, the economic climate, technological

trends and custom attitude .It is therefore

imperative that financial manager should take

cognizance of environmental factors that affect

their decision.

STATEMENT OF PROBLEM

There has been unprecedented increase in the

quest for the answer of the following questions posed

in order to clarify the duties of financial manager,

15


16/30

which is the prospective rank of a student studying

finance. Financial managers do not have authority in

carrying out their responsibilities their

responsibilities their actions are constrained by

certain factors beyond their control. These factors

can be dividrdinto two Internal environment factor

.The principal factor in this case. The [rinc9ipal

factor in the case is the unavailability of human

resource and the organization self imposed standard.

The external environment factor such as the political

legal firm work. Culture and social value. The

economic climate technological trends and the

customers attitude. It is therefore imperative that

financial managers take cognizance of the

environmental factors that effect their decisions.

There has been unprecedented increase in the quest

for the increase for answer for the following

16


17/30

questions posed in order to clarify the duties of a

financial manager, which is the prospective rant of

studying finance.

What is managerial finance? How importance is

the financial functions for the company. Are the

financial mangers responsible for the performance of

certain task? Dose this means that his action are

design to accomplices specific goals. How and when

did the financial archive the firm objective, which

is the finical managers definition of the fare price,

and how is it related to his firm return and

investment capital. One may logically ask, why are we

interested in this cash flow if they do not affect

the profit. Why cannot the profit effect not be

taking directly not the account in the analysis? What

tools and techniques are available to him and how

dose he goes about managing his own performance. On a

general scale, do they have any operational meaning?

17


18/30

That is how can managers operation use to further

national goals. Having identified these questions,

the provision of possible answers to the listed

question constitutes areas of possible consideration

of the project. As stated that the financial

management must find a rational base for answering

the following three questions;

(a) How large should an enterprise be and how fast

should it grow. What should be the composition

of its liability

(b) What should be the composition of its

liability

(c) In what form should it hold it asset board

decision.

The asset question stated above relate to three

board decision areas of financial management.

Investment financial managers become important that

18


19/30

the primary research conducted on a named company

serves a dual purpose this not only serve as part of

the tools in answering the questions, but is mainly

used to unfold the extent to which the financial

managers of a company is executing his duties

according to the project

SIGNIFICANCE OF THE STUDY

The purpose of this project: the role of finical

management in cooperate organization, is to equip the

practicing, finical managers, financial controllers,

and director of finance, treasurers, student of

financial studies and readers with a basic

understanding of financial decision. The financial

manager carries out financial decision maximize

through the following;

(a) Current asses management

(b) Capital budget decision

19


20/30

(c) Dividend decision

(d) Financial decision

CURRENT ASSET MANAGEMENT

The financial manager has every right to manage

the long-term asset and also the duties to mange the

current assets, efficiently to safeguard the fund

against liquidity or insolvency

Investment in current affects the firm

profitable liquidity and risk. If the firm doses not

invest sufficient funds in current asset, it may

become illiquid. But it would less profitability, as

idle current assets would earn anything, in order to

ensure that it would not earn anything. In order to

ensure that neither insufficient nor unnecessary

funds are invested in current asset, in fact it

should develop sound techniques of managing the

current asset.

20


21/30

CAPITAL BUDGETING

It is investment decision of the firm to have

its refund investment in long-term project in

anticipation of expected flow of future benefit over

a period of years. This decision could be either to

mechanize a process, replace a machine with another

modern type, selecting between machines, and

induction of new product or business expansion.

These features are;

1.Investing current funds for future benefit

2.The period of inc=vestment which involves long

term activities

3.The potential benefit, which will accrue to the

firm over a period of time.

21


22/30

DIVIDEND DECISION

The finical manager must determine the optimum

dividend - payment ratio. He should consider the

questions of dividend stability, stock dividend and

cast dividends. Financial manager must divide whether

the firm should distribute all profit or retain the

balance.

FINANCIAL DECISION

The financial manager must decide when, how, and

whom to acquire fund from to meet the firm investment

needs. The significant t issue before him is to

determine the proportion of equity capital and dept

capital. The proper balance will have to be struck

between return and risk once the financial manager is

able to determine the bets combination of dept and

22


23/30

equity. He must raise the appropriate amount through

the bets available resource.

RESEARCH HYPOTHESIS

Base on the certain theoretical assumptions,

hypothesis will be formulated below. There

theoretical assumption, which include the established

fact that the level of investment firms undertake and

as such, the level of dept end by firms. Investment

involve additional rest or financial assets and is

usually measured in terms of fund used in the

process, this funds include both equity and debt.

Ho: the level of debt financing has a negative effect

on the economy

Hi: the level of financial has a positive effect on

the economy

23


24/30

Ho: the level of dept financing has a positive effect

on the performance of the employee

Hi: the level of debt financing has negative effect

on the performance of the employee

Ho: the level of debt financing has not positive

effect on the productivity of a firm

Hi: the level of debt financing has a positive effect

on the productivity of the firm.

LIMITATION AND DELIMITATION OF THE STUDY

The research, may not fail to expose some of the

constraint or restriction we have encountered in

collecting the material for the project. There is no

gainsaying the unavailability of textbook in this

field of study especially in developing country like

is a different.

24


25/30

Hence, inspite of the fact that the published

financial statement by this banks are really seen,

they are equally not comprehensive as regards the

needs of a researcher. Some important information is

not usually available for further information cannot

be overemphasizing. Some claim the compliance with

their management policies not to disclose some vital

information to the public. It is a known fact that

most banking industries had their headquarters in

Lagos and it is where most decision are taking.

Reading on this fact, the questionnaire sent to some

of the industries could not come back due to the

irregularities in our communication system.

However, therefore the firm (union bank Plc

Enugu) was referred to after the researcher might

have compared the information available to him in the

respective banking industry that cooperate with him

within the locality.

25


26/30

Union bank Nigeria Plc started operation in the year

1917. Union bank if Nigeria Plc Enugu has five (5)

branches in Enugu

DEFINITION OF TERMS

The general ideal of this work The role of

financial manager in a corporate organization looks

into the following perspectives;

Chapters one give the general explanation of the

subject from the historical perspective,

organizational goals, and statement of problem, goal

and objectives.Significance of the study and

limitation and limitation and research hypothesis

Chapter tow literature review from the general.

Overview, financial ratio and profit planning

management of current asset, budgeting and investment

and management of current asset, budgeting and

26


27/30

managing the financial and management of short and

medium term.

The financial management involves all activities of

the financial manager concerned with raising of

capital, planning cash an credit requirement

including the effective of the control system as the

financial recourses. The activities could be selected

as follows (a) converting forecast into planes and

budget

(b) Planning the appropriate capital structure

Chapter two, literature reviews from the general

overview, financial ratio and profit planning

management of current assets, budgeting and financial

analysis. Budgeting and investing. Managing of small

financial strut and mangling f short and long term

financing.

27


28/30

Chapter three deals with the research methodology

conducted and consulted from the flow. Personal

interview, secondary source of data, questionnaire

hypothesis test and empirical analysis of the named

company.

However, the chapter four deals with the discussion

of result through financial ratio analysis,

hypothesis testing and implication of the result

On the other hand chapter five look into the summary,

conclusion and recommendation respectively finally

followed by bibliography, glossary and appendix

HOW TO PURCHASE COMPLETE MATERIALSTo purchase complete materials for the above mentioned topic,

visit any of ourMajor Partners that directed you to this

website (E.g.www.careerslit.com,www.uniprojects.net, etc)

******************************

HOW TO BECOME OUR MINOR PARTNERTo become our Minor partner, send email to us with heading

MINOR PARTNERSHIP Send the following details to:

[email protected]. Full Name:

2. Your School

28


29/30

3. Department

4. Phone Number

5. Email Address:

6. Level(OND,HND OR BSC):

Registration is FREE. Only Students are allowed

******************************

HOW TO BECOME OUR MAJOR PARTNERTo become our major partner, send email to us with a heading

MAJOUR PARTNERSHIP Send the following details to:

[email protected]

1.Your Full Name:

2.Address:

3.Company or Business Name:

4.Location:

5.Phone Numbers:

6.Email Address:

7.Your Target:

8.Academic Qualification:

Registration is NOT FREE. Students are not permitted to

become our major partner. Once your application is approved,

registration details will be sent to your email. We alwaysverify the above 8 details before approving any application.

If you meet our requirements, your contacts will be added

to this website, we will give you already made website and

give you link to our project materials.

******************************

TERMS OF USEThe project materials are already researched materials that

will guide you to develop your own new project. Study the

materials carefully and develop your own new copy.

On no account should you copy the materials word-to-

word. Copying word-to-word is against our terms of use.

29


30/30

******************************

Better is not enough, the best is yet to come!

30

Documents

the-role-of-financial-management-in-a-co-operative-organisation (1).doc