ABSTRACT

The focus  ofthis  research  project is the  Impact of credit manaqementon the profitability of manufarturing firms in Nigeria. A review of  related  literature was   cxlcnsively      made in  Chapter    Two of  the   work  to  cover  the  relevant aspects    of the  topic.  In this  regard,  the empirical   studies  carried out  by other researchers     were   assembled   to  comprehensively      address   this  issue.   The population     sample size of the study  is 2.20,·which  'is fully  representative  of the population.    The instruments   used in  data  collection·   for the  purpose of this  study comprised the  following: the  questionnaire,  personal interview, observations,   textbooks, seminar  papers,  articles and the  internet.  Two of the findings  made from the  study  are stated thus:   (1) A firm's credit policyhas a siqnificant  effecton its profitability.· ll)The expansion  of trade credit has a siqnificont  effecton  the firmts liquidity  position.   In  addition,  two   of the recommendations    advanced·   for  the  purpose   of  improving   the   operational ·performance  of  manufacturing jirrns.through  credit   management are:   (1) Sound [inonciol  manaqers should  be  engaged by manufacturing firms  to ensureproper management of their credit sales. (2) The average  collection periodof debts should not be more than the industry set standard

TABLE OF CONTENTS

PROJECT  ASSESSMENT. 

TITLE DECLARATION

CERTIFICATION

DEDICATION

ACKNOWLEDGEMENT 

TABLE  OF  CONTENTS

LIST OF  TABLES

ABSTRACT

CH.APTER ONE 

1.1 background   of the  study

1.2  Statement    of the problem

1.3 Objectives   of the study

1.4 Research questions                                                                                    4

  1.5  Research  Hypotheses                                                                                          5

1.6 significance  of the  study                                                                                    5

1.7 Limitation   ofthe  studv                                                                               6

CHAPTER TWO                                 I)         

2.0 review   of related   literature·                                                                                       7

2.1 Trade credit  and  operation                                                                     7

2.1.1  Reasons  for granting  credit                                                                            9

2.2  Setting  credit policy and  regulation                                                                10

2.2.1  Credit   standards                                                                                                11

2.2.'J..   Credit  terms                                                                                                       11

2.2.3 Collection efforts                                                                                               12

2.3  credit  policy goal                                                                                                 12

2.3.1  Optimal  credit policy                                                                                       13

2.4 Credit   policy variables   analysis                                                                         15

2 .4.1 Credit  analysis                                                                                                  15

2.4.2  Credit  scoring                                                                                                    16

2.4.3  Collection   policy and  procedures                                                           17

2.4.4 Establishing   internal collectioN  procedure                                             18

2.4.5  Other  collection procedures                                                                    18

2.4.6 Monitoring    receivables                                                                                      19

·2.4.G Monitoring   receivables                                                                                    19

2.5 Factoring

CHAPTER  THREE

3.0  Research    methodology

3.1   Research   design

3.2 Population     of the  studv.:

3.3  Sample   and sampling   technique

3.11-   Data  collection   method

3.5  Data  collection    procedure

3.5.1 Instruments     for  data collection

3.5.2 Validity    and  reliability

3.6   Data  analysis    and  techniques

CHAPTER  FOUR

4.0  Data   presentation    and analysis

4.1   Data   presentation

4.2  Hypothesis    te~ting/findings.

CHAPTER  FIVE                                                                                     

5.0 Summary/conclusion/recommendation                                                            44

5.1  Summary                                                                                                               44

5.2 Conclusion                                                                                                            44

5.3 Recommendations                                                                                               45

REFERENCES                                                                                                                                       45

APPENDIX  A                                                                                                               62

APPENDIX   B                                                                                                                                      64

GLOSS/\RY                                                                                                                   67

LIST OF TABLES

1. THF. EFFECT  OF CREDIT  MANAGEMENT  ON THE  PROFITABILITY    OF THE MANUFACTURING    FIRMS

2.   PHASING        OUT   ·      OF     TRADE     CREDIT       IN     THE    OPERATIONS   ·          OF MANUFACTURING     FIRMS

3.   ENFORCEMENT        OF   ;rHE      COLLECTION      OF    OVERDUE      ACCOUNT RECEIVABLES

4.   TEST  OF RESEARCH HYPOTHESIS '1

5 ..     TEST  OF RESEARCH !1YPOTHESIS 2

G.   TEST  OF RESEARCH HYPOTHESIS   3