Effect Of Working Capital Management As A Tool For Cost Minimization And Profit Maximization On Manufacturing Companies In Nigeria (A Case Study Of Pz Nigeria Plc, Nigerian Breweries Plc, Guinness Plc And 7up Bottling Company Plc)
ABSTRACT
Capital can be classified into
two broad categories based on tenure viz; long-term capital 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
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 currents 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 to decide
how much of the materials used for production of goods and services to be on
credit or in cash-and-carry basis. It also has to determine what proportion of
kits sales has to be on credit. Also, both the maximum and minimum stock levels
of raw materials and work-in-progress (WIP) have to be determined and
maintained at a given point in time. Orji (2001), refers to working capital as
a firm's investment in current assets, cash, marketable securities, trade
debtors and stock, less current liabilities used to finance the current assets.
He stated that working capital management therefore means the planning and
controlling of both current assets and current liabilities. It involves the
administration of cash receivables, inventories, marketable securities and the
current liabilities.
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MICHAEL, U (2021). Effect Of Working Capital Management As A Tool For Cost Minimization And Profit Maximization On Manufacturing Companies In Nigeria (A Case Study Of Pz Nigeria Plc, Nigerian Breweries Plc, Guinness Plc And 7up Bottling Company Plc). Repository.mouau.edu.ng: Retrieved Nov 26, 2024, from https://repository.mouau.edu.ng/work/view/effect-of-working-capital-management-as-a-tool-for-cost-minimization-and-profit-maximization-on-manufacturing-companies-in-nigeria-a-case-study-of-pz-nigeria-plc-nigerian-breweries-plc-guinness-plc-and-7up-bottling-company-plc-7-2
UNIVERSITY, MICHAEL. "Effect Of Working Capital Management As A Tool For Cost Minimization And Profit Maximization On Manufacturing Companies In Nigeria (A Case Study Of Pz Nigeria Plc, Nigerian Breweries Plc, Guinness Plc And 7up Bottling Company Plc)" Repository.mouau.edu.ng. Repository.mouau.edu.ng, 19 Jul. 2021, https://repository.mouau.edu.ng/work/view/effect-of-working-capital-management-as-a-tool-for-cost-minimization-and-profit-maximization-on-manufacturing-companies-in-nigeria-a-case-study-of-pz-nigeria-plc-nigerian-breweries-plc-guinness-plc-and-7up-bottling-company-plc-7-2. Accessed 26 Nov. 2024.
UNIVERSITY, MICHAEL. "Effect Of Working Capital Management As A Tool For Cost Minimization And Profit Maximization On Manufacturing Companies In Nigeria (A Case Study Of Pz Nigeria Plc, Nigerian Breweries Plc, Guinness Plc And 7up Bottling Company Plc)". Repository.mouau.edu.ng, Repository.mouau.edu.ng, 19 Jul. 2021. Web. 26 Nov. 2024. < https://repository.mouau.edu.ng/work/view/effect-of-working-capital-management-as-a-tool-for-cost-minimization-and-profit-maximization-on-manufacturing-companies-in-nigeria-a-case-study-of-pz-nigeria-plc-nigerian-breweries-plc-guinness-plc-and-7up-bottling-company-plc-7-2 >.
UNIVERSITY, MICHAEL. "Effect Of Working Capital Management As A Tool For Cost Minimization And Profit Maximization On Manufacturing Companies In Nigeria (A Case Study Of Pz Nigeria Plc, Nigerian Breweries Plc, Guinness Plc And 7up Bottling Company Plc)" Repository.mouau.edu.ng (2021). Accessed 26 Nov. 2024. https://repository.mouau.edu.ng/work/view/effect-of-working-capital-management-as-a-tool-for-cost-minimization-and-profit-maximization-on-manufacturing-companies-in-nigeria-a-case-study-of-pz-nigeria-plc-nigerian-breweries-plc-guinness-plc-and-7up-bottling-company-plc-7-2