This work of project based on the working capital management as a tool for business survival is classify into five different chapters. Which the chapter one based on the general introduction, background of the study, statement of the problems justification of the study and objective of the study, scope of the study and plan of the study.

While chapter two relies on literature review with sub-division of working capital management working capital circle, component, cash management important of cash management, cash planning and inventory stock management.

Chapter three based or research, methodology with the sub-division of research types, research methodology procedures, research design, data specification population of the study, sample size, generalization of sample, unique, method of union bank of Nigeria plc.

Also chapter four based on finding and analysis of data, characteristics of sample of individual statement.

Lastly chapter five which comprised with the summary, conclusion and recommendation, limitation of the study, suggested areas of the study and bibliography.


Title page i

Certification ii

Dedication iii

Acknowledgement iv-v

Table of contents vi-viii

Abstract ix


1.0 General introduction 1

1.1 Background of the study 1

1.2 Statement of the problem 2

1.3 Justification of the study 4

1.4 Objective of the study 6

1.5 Scope of the study 8

1.6 Limitation of the study 8

1.7 Plan of the study 9

1.8 Definition of terms 10CHAPTER TWO

2.0 Literature review 12

2.1 Working capital management 12

2.2 Working capital circle 17

2.3 Components of working capital management 17

2.4 Cash management 18

2.4.1 Important of cash/ sources of funds 19

2.4.2 Cash versus profits 24

2.4.3 Cash planning 24

2.5 Inventory/ Stock management 24

2.6 Determine the optimum cash balances 27

2.6.2 Optimum cash balance under certainty 28

2.7 Inventory/ Stock management 35

2.8 Ascertainment of cost 38

2.9 Reasons for holding stock 42


3.0 Research methodology 43

3.1 Introduction 43

3.2 Research type 43

3.3 Research methodology procedures 44

3.3.1 Research design 44

3.3.2 Data specification 44

3.3.3 Population of the study 45

3.3.4 Sample size 46

3.3.5 Generalization of sample size 46

3.3.6 Data collection instruments 47


4.0 Finding and analysis of data 51

4.1 Characteristics of sample 51

4.2 Analysis of individual statement 57


5.0 Summary, conclusion and recommendation 67

5.1 Summary 67

5.2 Conclusion 68

5.3 Recommendation 68

5.4 Limitation of the study 70

5.5 Suggested area of the study 71

Bibliography 72




The prevailing economics situation is a resulting largely from extensive mismanagement of the country; resources have made issues of management, one of the paramount importance in the business world where the financial organization sector has a pervasive influence: the management of working capital cannot be overemphasized.

Working capital management can be said to the life blood for the sustenance of any organization the study of financial organization is incomplete without an in-depth, thoroughly and critical analysis of techniques of its working capital management.

Working capital is concerned with:

(i) Financial of working capital component

(ii) Investment in asset

(iii) Usage of working capital

It is the art of science of planning organization directing, controlling and utilization of working capital component as well as determines the appropriates mix of working capital management. It can also defined as that aspect of managerial finance or management accounting, which is concerned with the activities involved in sourcing financing and investing in the components of working capital.

In managing working capital, companies separate current execution into their component units for policy formulation and execution. This is because are of different nature, which makes it imperative that they will be considered and managed under a unique appropriate.


The strategic role that working capital management plays in all organization cannot be over-looked.

This implies that working capital management is the main pillar of the sustenance of any financial organization.

The study or organization financial statement in incomplete without a thoroughly and perfect understanding of the techniques of its working capital management.

In examine the management of working capital answers to the following questions.

i. Does effective stock management increase organization performance?

ii. Does cash management enhance business survived

iii. Does the debtor’s management increase business sales and profit?

iv. Why is the need to invest incurred assets?

v. How many inventories are to be carried out and how de we get funds in pay for them?

vi. What should be the proportion of long term and short term funds to finance current assets?

vii. How the working capital management if finance and organization?

viii. How many funds to finance should be invested in each type of current assets?


Working capital management has been identified an essential area in efficient management of the company. The failure to plan or forecast working capital level and related cost to the basic reasons for approach. Though with an objective therefore, the ultimate aims of working capital are:

i. Maintenance of adequate level of working capital allow for smooth operation.

ii. To prevent stock – out

iii. Maintenance of adequate cash position to keep the firm liquid and to use cashes in a profitable ways.

iv. Management of adequate mix of working capital components the success of working capital management depend upon the knowledge of cash flow position of the companies, the knowledge of cash flow position of the companies, the various components of the working capital from the basic of this project wish to subsequent chapters. The failure of a product or the entire company.

Therefore the problems of founds management have always been of great concern to the financial managers of both private and public co-operation all over the words they is to show the merit of the working capital as a tool for business survival, to serve as spring banned for financial organization to produce answers for their current problem of funds management.


Working capital represents a large proportion of total investment in the operation in the operation of any financial organization the management of this aspect of firms resources is crucial to the success and survival of any company.

A company can be seen as a series of cash flow. In order words. These streams of cash flow constitute the components of working capital in view of the above, the following of the relevant objectives and purpose of the study of working objectives and purpose of the study of working capital management especially in financial organization, such as unions bank of Nigeria plc. This is a case study in this project.

1. To identify the various method or techniques for managing the individual component of working capital in financial organization concern in particularly how union Bank of Nigeria plc. Manage the component of its working capital.

2. To determine an optional working level

3. To examine operational and financial efficiency of union bank plc in term its ability to earn on its owners.

4. To identify the component of working capital the relevance of this study can be seen in terms of the importance of working capital smooth operation of the firm and it ability to invest in working capital, in most efficient and effective manner. This at the end of this project, it should possible to review, assets and critically analysis the method of managing the working capital of union Bank of Nigeria plc.

Over all additional contribution should have been to those of the early writers on how best to manage working to ensure optimum level of investment.


Working capital management is used for business survival in many fields of business world. However, this study of working capital management as tool for business survival is limited to financial organization and the study bases on union Bank plc. Ilorin branch the study concentrated on the perception of the management, intermediate and hour level work. In the effectiveness of this model as tool in business survival. Where by working capital techniques are used by the management of considered in making decision in the company.


The first problem encountered in collecting our data was inadequate of data on the study, the topic been relatively new, text are not adequate gotten on the subject. Also the reluctancy in the attitude of staffs,

Finance and the constraints were another limitation to data collection problems and the prospect of small scale business. This can stem from the fact that the researcher had to go to the office time without number (which were in kwara state).

This the limitations centre on transportation cost and time because we are a student who had to combine project work with our academic.


This research work examine the important of effective working capital cash, cash management inventory management and debtor management.

Part three of this project death with the research methodology procedure, research design, and generalization of sample size that related to the brief historical background of union Bank plc in Nigeria part four which dealt with data analysis and interpretation of findings, questionnaire analysis.


This is an act of recoding, classifying, summarizing in significant number and in terms of money transaction and events which are in part at least of financial character and interpreting the result thereof.

Data: A set of fact, information collected and ready for use

Cottage industry: Any group of people or object which are similar in one way or more and which form the subject of the study in a particular survey.

Sample: This is defined as of the whole 

Credit policy: This is a clear act guideline on the extension of credit facised when customers are allowed to make immediate use or to carry goods away and make.

Cash Flow: This is the movement of cash in and out of the business. It is synonymous with the cash account.

U.B.N: Union bank of Nigeria

C.B.N: Central Bank of Nigeria

Business: can be define as any activities pat in place by a man in ofter for him/her to earn a living.

Working capital: Can be defined as the resources available for conducting day-to-day operations of an organization; normally. It is the excess of current assets over current liabilities.

Management: It can be defined as a vital sector of our society. Our economic needs and wants are met by business and our lives are touched daily in countless. ways by the operations of business people.

Investment: Can be define as the commitment of a sum of money usually large into a business or project with the aim of reaping a stream of

As set: can be described as which belong to the income business like building motors machinery etc.

Liabilities: can be define as the indelitedness of the business to outsider. It is the claim on the assets of the company.




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