Chapter One

OBJECTIVE OF THE STUDY

Cash flow management is principally concerned like any other management process of
planning and control. Although cash is the most vulnerable assets to theft in a firm, it is a
surprising that there is completed lack of formalized cash management in many industries
today, while some industries prepares cash budget at the beginning of their financial year
without any following control mechanism and more over actual performance are not
corresponding with the budget at the close of the period. Others rely on monthly bank
reconciliation statement, which are often prepared late for management and management
hardly see the weakness or breakdown in cash management system until cash problem arise.

 Therefore the purpose or the intention of the researcher is to a To find out how short
supply of cash is disrupted the normal flow of operation of the industry.
 To ascertain the extend to which cash manager find it very difficult in timing of receipts
and payment.
 To find out whether if the idle cash not invested will have any effect in the industry.
 To determine how loss on the opportunity of earning interest and the risk of keeping the
liquid assets affect the effectiveness of the industry.
Answer or suggest rise by the problem of the study.

 To find out how short supply of cash is disrupted the normal. The find out how short
supply of cash is disrupted the normal flow of operation of the industry.
 To ascertain the extend to which cash manager find it very difficult in timing of receipts
and payment.
 To find out whether if the idle cash not invested will have any effect in the industry.
 To determine how loss on the opportunity of earning interest and the risk of keeping the
liquid assets affect the effectiveness of the industry.
 Flow of operation of the industry.
 To ascertain the extend to which cash managers find it very difficult in timing of receipts
and payment.
 To find out whether if the idle cash not invested will have any effect in the industry.
 To determine how loss on the opportunity of earning interest and the risk of keeping the
liquid assets affect the effectiveness of the industry.
 To find out how short supply of cash is disrupted the normal flow of operation of the
industry.
 To ascertain the extend to which cash manager find it very difficult in timing of receipts
and payment.
 To determine how loss on the opportunity of earning interest and the risk of keeping the
liquid assets affect the effectiveness of the industry.
 To determine how loss on the opportunity of earning interest and the risk of keeping the
liquid assets affect the effectiveness of the industry.
 To find out how improper marching of fund and activities lead to high cost as loan is
retired and new one is raised for the same project.
 To ascertain the extent of the improper evaluation of projects lead to losses that
registered in the industry.
 To determine the extent how management facing problems of how to maintain and
control an optimum cash balance enough to meet all payment.
CHAPTER TWO
LITERATURE REVIEW
Literature review is the critical study of the previous and related work or studies one in the
researcher’s area of interest.

The researcher reviewed the already existing and current literature on this topic as well as
other related literature in order of the following headings.

RESEARCH QUESTIONS/HYPOTHESIS, MODELS THEORIES

According to Eze (1999), in his book practical approach to research methods and statistics,
research questions that need to be answer if the study is to be properly completed. Research
questions are not very different from purpose of the study but they are stated in the form of
question.

Therefore, research question, as concern on area of cash flow management cannot be

overemphasized as stated below but it would be in models/theories form.

Adequate cash needed to meet the firm’s payment or bill provided by the industry. Amount of
idle cash or surplus cash held by the firm should be minimized and should be invested in
order to yield interest. In managing cash the firm should evolve strategies that will help in
managing cash inflow and outflow of industries. Management of industry should monitor
over cash outflows such as purchases, salaries and wages etc. so that the cash posture of the
company will not adversely be affected. Management should guard jealously over its most
liquid and important resources.

According to Egbuonu (2004) in her handout on research methodology, research hypothesis

is a tentative answer to a research question. It is an intelligent guess of an answer to the
research question, which is subject to test. Research hypothesis is used when expressing a
relationship between two or more variable.

A hypothesis can be stated in two ways:

1. Null form – is that denoted by Ho, it is observed and expected frequently agree with one
another.
2. Alternative form – it is denoted by Hi, is that they do not agree.
The research hypotheses in research area of interest are as follows;

1. Ho adequate cash flow management is needed to put and to continue a company on a

sound business path.
Hi adequate cash flow management is needed to put and to continue a company on a sound
path.

2. Hi a positive cash flow avails a business investment opportunities.

CURRENT LITERATURE ON THEORIES
All company whether large or small receive and disburse certain amount of cash in
transacting business. For a firm to have sufficient cash at the time of need require good and
efficient cash management because cash inflows and outflows do not normally coincides.
Thus to ensure that proper time, sufficient liquidity of current asset should be maintained.

The essence of cash or near cash items (marketable securities) is to meet the firm’s current
liabilities. However, determining the optimum cash level involves fundamental decision with
respect to the firm liquidity and its cash balance meaning, that the firms forgo opportunities
to earn interest while low level of cash would weaken the firm’s liquidity position

AWARENESS OF CASHFLOW
According to W.A.C Harthery in his book “cash planning forecasting and control” observe
that cash flow is the difference between the actual cash into and out of the cash or Bank
account” although they could be a planned profit for the period in the cash flow position for
the period could be negative where payment (outwards flow of fund) exceed receipts (inflow)
thereby causing financial difficulties. Over trading is one of the instance that give rise to
neglect cash flow. A positive cash flow position is situation where receipts for the period
exceed payment of the some period. The determination if cash flow depends on a number of
variables such as the impact of growth, inflation timing and synchronization of cash receipts
and payments. Cash which is the life wire of any organization, is more susceptible to theft
than any other assets.

Therefore, efficient management of cash includes measures that will:

 Prevent losses through fraud or theft

 Provide accurate accounting for cash receipts, payment and
 Maintenance of sufficient account of cash at all time to be able to make necessary
payment and maintain a reasonable balance for emergencies.
 Prevent unnecessary large amount of cash from being idle.
It is the responsibility of management to establish internal control over cash. To stay out of
bankruptcy, management must also ensure that sufficient cash is available for meeting the
necessary obligation such as payment of salaries, wages, rents, insurance, taxes, dividend etc
of the firm.

CASH MANAGEMENT
Accounting to P.S.O. aguli (1998) cash management is concerned with managing the cash
flows into an out of the firm and cash balance held by the firm at the point in time. Cash
management assures importance than other current assets, a business cannot survive proper if
it does not have adequate control over it cash.

For companies to protect its cash the following point should taken notice of.

 Account for all cash transaction accurately so that correct information will be available
regarding cash flows and balance.
 Make certain enough cash is available to pay bills as they fall due.
 Avoid holding too mush idle cash, because excess cash should be invested to generate
income such as interest.
 Prevent loss and due to theft or fraud.
In other to manage cash. Firms should develop some strategies for cash management. This
would usually involve the following fact of cash management.

CASH PLANNING
Cash planning- though the cash budget the deficit or surplus is determined for each period.

CHAPTER THREE
RESEARCH METHODOLOGY
This chapter consist of the design of the study, area of the study, population of the study,
sample of the study, instrument for data collection, validation of the instrument, distribution
of the instrument and method of data analysis etc.

DESIGN OF THE STUDY

Research design is a plan which specifies how data relating to a particular research problem
can be collected and analyzed. The researcher considered the research design using sample
and sampling technique.

AREA OF THE STUDY

On this topic the area of study is pal Breweries ltd, oko, Ananbra state, Nigerian. The
company is situated in a very good position where they are having many customers and also
where the operation will be helpful to the aspiration of the massage.

POPULATION OF THE STUDY

in the accounting department, there chief accountant, assistant accountant, supervisor 1 and
11, accounting assistant, account clerk wages clerk and cashier etc. while in other
departments they are several staffs but the researcher focus attention only on the accounting
department where she finds suitable that will yield enough information in the area of her
interest.

Therefore, the total number of staffs of pal Breweries lid oko 100 excluding other department
which by virtue of their position information from them may not be accurate, validate and
reliable for the purpose of this research.

CHAPTER FOUR
DATA PRESENTATION AND ATA ANALYSIS
This chapter is concern with the organization and analysis of data obtained from the research
questionnaires, verification of historical records, observation and personal interview
administered to the members of staff of pall breweries ltd oko.

Management substantiates the viability of a business concern and it avail the business
concern of expansion and investment opportunities.
CHAPTER FIVE
SUMMARY, RECOMMENDETION AND CONCLUSION.
SUMMARY OF FINDINGS
As our economy has been restricted, one of the conduct lesson to be taught and leant by
business is the effective and efficient allocation and utilization of resources, which is
becoming increasing difficult to overcome.
It is therefore, a tourism to observe that the business of tomorrow is one that is efficiently run
today.

The study revealed the following among others:

1. The bulk of the company receipt are derived from the company sales (both cash and
credit) this is made the company to be considerably self reliance for the period reviewed.
Although, loans and over draft facilities were employed in the time past.
2. Industry production and equipment maintenance are major expenses incurred by the
company on the regular basis.
3. The management of the company is completely in control of the movement of fund
within and outside the company.
4. The actors in the industries prefer to reinvest in their business other than investing in a
new business.
5. Management does not see investment in marketable security as an important way of
using idle cash. They however, prefer to put idle cash into fixed deposit account to yield
constant interest.
6. There is peak sales and production period. The peak period is usually during the dry
season. This is because nature favours breweries during this period.
7. The company does not match cost with benefit in its handling of surplus cash.
8. There is accelerated inflow deceleration of out flows. The former is achieved by making
much cash sales than credit sales with result in little or no bad debts.
9. It was also discovered that the firm does not actually maintain optimum cash balance
though, they keep cash balance what is time , it cannot be regarded as optimum cash
balance what is known as the cash balance in the company is the sum of the bank credit
and cash held at the office. Thus seasonal fluctuations and the of sales determines the
cash balance which as can be imagined, varies from time to time.
10. The company does not maintain minimum cash balance.
RECOMMENATION
Based on the findings, knowledge and the opinion of literature concerning the research topic
and the case study, I would like to tender the following suggestion and recommendations:

1. management should as a matter of urgency necessity frame a cash policy statement that
will clearly pin point what the company policy is regarding.
2. Access cash surplus cash
3. Investment in marketable security stock.
4. Bank borrowing and overdraft.
5. Minimum and optimum cash balance.
Without cash clear-out policy statement the measurement of performance as a means of co-
coordinating and controlling the operation of the cash management progrmme would be
difficult and inconsistent.
2. The company should endeavor to use the combination of financial ratio and experience
in solving its liquidity problems comparing company’s financial performance with what
is operational in the entire industries.
3. It is the opinion of this study that the company pals breweries industries limited Oko in
Orumba North, Anambra State. Employed out of its cash flow activities.
4. CONCLUSION
5. From this research work it is clear, that whatever the size of an organization be,
procedures is needed to be adopted to ensure that the best use of cash and other
financial resources are in operation.
6. A proper management of cash flow is necessary for any business to live. A business
could be doing well today but fails tomorrow if cash flow not properly managed.
7. The absence of the user of accounting rations makes it difficult to determine cash
deficiency and the company liquidity position throughout the year as regard its current
assets and liabilities.
8. The over reliance on the cash from sales could mean doom for the company when
sales fails greatly. Other sources of revenues are necessary if the business must
remain healthy at all times.
9. Therefore, it is very important for any business that wants to continue in perpetrating
to adequately and properly manage its cash flows.

SUGESTIONS FOR FURTHER RESEARCH

This study does not end here due to some certain constraint that limiting it such as time,
finance and ill equipment school library e.t.c had been a merely constraint to carry on this
research work, any body who find this topic useful can further it.

REFERENCE
 Decenze R.O (1982) personnel human resources management 3rd edition USA prentic
hall Eaglewood.
 Ecil B. I (1981) the practice of social resources. Belmot California, wadworth publishing
company.