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Working Capital Management As A Tool For Cost Minimization And Profit Maximization
[A CASE STUDY OF ANAMBRA MOTOR MANUFACTURING COMPANY ENUGU]
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Other investors 25
100
Source: National council on privatization
secretariat bureau of public enterprises investment opportunities in
Nigeria Auto motive industry.
According to the term agreement, the
plant is to assemble/ manufacture Mercedes Benz brands of trucks and
buses of different models and capacity.
The joint venture agreement provided some protection of the company through import restriction.
The
company was to assemble commercial trucks and buses with payloads of
2.5 tons and above. The company started production of vehicles with pay
load of 5 tons and above. The plant was commissioned on July 8, 1980
with actual production starting in 1981.
It has an installed capacity of assembling 750 vehicles per annum on all a single shift.
The
plant is located at Enugu and preliminary inspection inspection
revealed that the facilities were in good technical condition, which
indicated a high standard maintenance. This actually reflected in the
award to the company of 150900l certificate for total quality
management.
Anammco is the second surviving vehicle plant in the
country. It is producing at 10% of its installed capacity as clearly
indicated in the company’s appendix 1.
1.2 Statement of The Problem
The
present world economic hazard coupled with economic policies being
operated in the nation has led to a situation where many business
organizations have to fold up. Others barely survive by thriving on very
lean financial and material resources. This is due to the mere fact
that procurement of capital to finance their daily operations is
increasingly becoming difficult. However, the efficient management and
control of working capital can generate a considerable amount of
internal financing.
The project topic seeks to analyze the Anambra
motor manufacturing company’s (ANAMMCO) working capital and its segment.
The study uses ration analysis as a measure of efficiency of working
capital management. The topic will equally determine the extent to which
the profitability of the company is dependent on the level of its
working capital management, using the percentage ratio measurement.
1.3 Purpose of The Study
The
objective of any study undertaken is to contribute to the development
and growth of its case study. The purpose of this study includes:
a) To show how working capital management can affect the profitability of the company.
B)
To examine the contribution made by the working capital management on
the activities of a manufacturing company, with particular reference to
ANAMMCO.
C) To illustrate the ways in which working capital management can be used as a tool for cost minimization.
D)
To recommend where necessary and appropriate alternative working
capital management technique practical and procedure to ANAMMCOs top
officials.
1.4 Significance of The Study
This work, working
capital management as a tool for cost, minimization and profit
maximization will assist biz organization on their operations and enable
them to formulate a working capital management that is suitable for their business environment in order to optimize the profit of their operations.
It
is hoped that factors that defy the smooth operation of the company in
an area of working capital will be identified. This will go a long way
to aid the management in future planning of an ideal working capital
management. Finally, it is hoped that recommendations of this work would
be of great importance to the other manufacturing companies that may
adopt them to suit their goals. This research work also intended to
provide a base for further researches inthe area of working capital
management, the government will benefits as efficient and effective
working capital will bring about increase in profits which is taxable,
and can also be used for expansion and employment criteria.
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ABSRACT - [ Total Page(s): 1 ]ABSTRACTThe objective of this research work contains working capital management as a tool for minimization and profit maximization with particular reference to Anambra motor manufacturing company, Enugu. The research design used was the survey method and the sources of data were both primary and secondary. The primary sources were interviews granted to me while the secondary sources of data were obtained from related literatures viz text books, internet, journals by different authors. Primary so ... Continue reading---
