THE IMPACT OF FINANCIAL MANAGEMENT IN A CORPORATE ORGANIZATION
This project examined “the impact of financial management in a corporate organization” using NICON insurance as a case study. Financial management means to plan and control the finance of a corporate organization. It is done to achieve the objective of the organization which includes profit maximization, wealth maximization, proper estimation of total financial requirement of the organization, proper mobilization, proper utilization of finance etc. The problems of the study were identified as well as the objectives of the study which includes to examines the impact of financial management in corporate organization. Related literatures were reviews and the research methodology x-rayed, which consist of the population, source of data, sample size, method of investigation. The researcher after her analysis made some findings, among them being that financial manager is important in an organization. Conclusions and recommendations were made.
1.1 BACKGROUND TO THE STUDY
Financial management involves all the activities of the financial managers concern with the rising of capital lining cash and credit requirement including the effective control of financial resources. The financial management in an organization performs various activities ranging from converting forecast into planned and budget; planning the appropriate capital structure; raising cash flow outside the business; forecasting the future, investing surplus fund; controlling the cash balance and flow in accordance with plans and with changing circumstance. Base on the activities above, the practicing managers are interested in the study of financial management because among the most crucial decision of the firms are those which relates to the financial matters an so are giving better treatment for better understanding of financial management which provide them conceptual and annalistically insight on the capital fund and using the capital fund are called financial function of any firm.
Financial which is the life wire of any business and developed in 1990 since it concerns the actual flow of money as well as any claim against money. The financial managers subsequent decision is made in such more co-ordinate manner responsible for the control system. The financial management ensures that efficient allocation of fund that efficient allocation of fund among the various uses. The allocation with the underlying objective of the firm to maximize the profit in the customers wealth. The role of financial management has expanded of the management has expanded of the management of the working capital to long-term asset and liabilities. As such, this research work tends to examine the impact of financial management in co-operate establishment taking NICON as a case study.
1.2 STATEMENT OF PROBLEM
1. In appropriate planning by the financial managers which results in financial losses by a business organization.
2. Mismanagement of funds/finance meant for the running of the organization are sued to secure unnecessary assets for the business.
3. Poor financing decision making by the financial managers in respect of investment, financing and dividends.
1.3 OBJECTIVES OF THE STUDY
1. To examine the impact of financial manager in a corporate organization.
2. To ascertain the functions and roles of financial manager in financial management.
3. To find out the problems and challenges confronting financial managers in a corporate organization in Nigeria.
4. To offer solutions and suggestions on the best way to handle finance management in a corporate organization by the financial manager.
1.4 RESEARCH QUESTIONS
1. What is the impact of financial management in a corporate organization?
2. Os there any problems facing financial managers in an organization?
3. How effective and efficient is the financial mangers in the decision making of an organization?
4. What is the effect of mis-management of funds by the financial managers?
5. Are there positive advantages of appropriate planning by the financial manager?
1.5 SIGNIFICANCE OF THE STUDY
The research work will be of greater importance and beneficial to students, the financial managers, the investors, the corporate organization, government, and eh general public in the following ways.
· To the financial manager: The research work will enable them to know their general roles, duties, functions, responsibilities and the financial management and will also guide them in the financial planning, financial investing decision making and financial diversifications.
· To the investors: The research work will showcase to them on what the duties of the financial managers are and what are the best measures to be used to ascertain the most performing financial manager.
· To government: The researcher report intend to serve as the medium by which the government identify those corporates that contributes greatly to the growth and development of the national gross domestic product (GDP)
· To the student and general public: The research work will be a point of reference for future study/research in a related topic.
1.6 SCOPE AND LIMITATION OF THE STUDY
The research work examines “the impact of financial management in a corporate organization using the (NICON) in Enugu state. The researcher encountered some difficulties in the course of carrying out this research work. Some of the challenges include lack of sufficient fund, inadequate contact with some of the respondents, prejudice, distrust arising from ignorance/misconception on the basis of the research study. Also, the time allocation to this research work is significantly inadequate as the researcher have to combine the research work with the normal academic works.
1.7 DEFINITION OF TERMS
· Accumulated profits: The amount showing in the appropriate of profits accounts that can be carried forward to the next year account;
· Activity ratio: A ratio used in management achieved for an accounting period divided by the production level regarded as achievable for that period;
· Amortization: The process of treating as an expense the annual amount deemed to waste away from a fixed asset.
· Balance sheet: A statement of the total assets and liabilities of an organization at a particular date, usually the last dad of the accounting period.
· Benchmarking: The process of identifying the best practice in relation to products and process, both within an industry and outside it, with the object of using this as a guide and reference point for improving the practice of one’s own organization.
· Budget: A financial or quantitative statement, prepare prior to a specified accounting period, containing the plans and policies to be pursued during that period.
· Cash flow: The amount of cash being received and expended by a business, which is often analyzed into its various components.
· Corporate Image: The image that a company projects of itself. To gain a benevolent image for the way a company treats its employees or the environment.
· Dividend: The distribution of part of earnings of a company to its shareholders.
· EBIT: Earnings before interest and tax.
· Embezzlement: A firm of theft in which an employee dishonesty appropriates money or property given to him/her on behalf of an employer.
· Finance: The process/practice of manipulating and managing money.
· Goodwill: The deference between the value of the separable net asset of a business and the total value of the business.
· Investment: The purchase of capital goods, such as plant and machinery in a factory in order to provide goods for future consumption.
· LIQUIDITY: The extent to which an organization are liquid, enabling it to pay its debts when hey fall due and also to move into new investment opportunities.
· Profitability: The capacity or potential of a project or an organization to make a profit.
· Ratio Analysis: The use of ratio to evaluate a company’s operating performance and financial stability.
· Remuneration: A sum of money paid for a service given.
· Salary: A regular payment, usually monthly, made by an employer, under a contract of employment to an employee.
· Solvency: The financial state of a person or company that is able to pay all debts as they fall due.
· Yield: The income from an investment expressed in various ways. The nominal yield of a fixed interest security is the interest it pays expressed as a percentage of its per value.