Abstract

This study was conducted to examine the impacts of cash management on productivity in intercontinental distillery limited. Relevant literature review was carried out in the course of conducting the study and gave it the required theoretical background of which the study the problem associated with the impact of cash management on productivity in intercontinental distillery limited were reviewed. Questionnaire was employed as the major instrument for data collection and the data were analyzed using simple percentages. On the bases of the data of the data analyzes carried in the study and the testing of research question, the research recorded some useful findings. One of the important findings recorded in the research work was the impact of cash management. Contribute the significantly to the attainment of the intercontinental distillery limited. These contributions include the following to the promotion of good productivity in the intercontinental distillery limited and it enables the organization to ensure the industry peace and also lead the organization objectives. The establishment of we laid down grievance and other procedures of setting dispute are another contribution of the fungibility and cash management. Based on the findings recorded in the study some useful recommendations were made. Recruitment policy which ensures that people are engaged in the jobs. Which they best suited, should be put in place by the management of intercontinental distillery limited. The organization should establish free flow of information between employers and employees.

Chapter one

Introduction

• Background of the study

The success of any business today is largely determined by the fungibility position and the way in which it manage its cash to ensure productivity. Solomon (2002) as the main purpose of establishing business is to make profit and not only to make profit but to optimize it therefore all necessary factors responsible for such should be controlled and manage in order to achieve the objective (2001).

Fungibility position of breweries could be considered in terms of cash and cash equivalent; loans advance prepayment, debtors, creditors etc, which could be readily ascertained to meet up with the financial obligation of intercontinental distillery limited in short term and long term (2003).

Abonede (2004) idle cash which some could refers to as surplus reserves and which could be also seen as part of the fungibility of a company could be used in such a way that it will make profit to accrue to it, therefore adequate care should be taken in the aspect of managing cash Lucey (2003). There is a cost involved in maintaining a balanced fungibility position. This is especially so where the interest rate is low and credit demand is sluggish however, those cost can be minimized through the use of spread management when interest rate and credit demand are increasing a balance fungibility can be very profitable because fungibility is available to meet the loan demand maintaining a balance productivity. Joseph (1971).

John (1998) argue that by management his fungibility position a intercontinental distillery limited may be able to afford the cost that often accompany an excess as well as deficit fungibility position. In addition it can display to regulatory as well as investors a logical controlled method of ensuring that the need of the community and the asset of the shareholders are being well managed. It can be reasonably inference quoted above that there exist on important relationship between the concept of fungibility and productivity.

Efficiency in intercontinental distillery limited in terms of fungibility and productivity could be measure through trend analysis and ratio analysis. Some of the ratio includes capitals adequacy asset utilization productivity, fungibility, and cash flow ratio.

A proper consideration and analysis of this will give us a base for determining the best position for fungibility and cash management to ensure productivity in brewing industry. Aborede (2004).

 

1.2     STATEMENT OF THE PROBLEM

Through these financial roles, the commercial intercontinental distillery limited use the idle funds in other classes of financial assets investment. These business activities of the breweries is not done without problem facing it, since these deposit which have been invested by the intercontinental distillery limited for profit maximization can be demanded for at any time. When the breweries is not able to meet their financial obligations, the public begins to loss confidence and these will cause a lot of competition to the financial sector. With the high increase of competition in the brewing industry, every commercial intercontinental distillery limited should strive to operate on profit and at the same time meet the financial demand of its depositors by maintaining adequate fungibility. The problem then becomes how to select the optimum point at which commercial breweries can maintain its assets in order to optimize these two objectives. These problems become more difficult as a large numbers of intercontinental distillery limited are basically engaged with profit maximization and tend to neglect the importance of fungibility management and these can lead to technical and legal insolvency.

This research work will also see to other problems such as the impact of excess fungibility and the problem of estimating the population of the deposits that can be demanded for at any specific time, selection of factors that will affect or influence the breweries fungibility level and finally problem of satisfying the two major publics of the commercial breweries simultaneously. With these solutions will be prescribe and recommendations will be made where necessary.

 

1.3     OBJECTIVE OF THE STUDY

The competition environment of the financial institutions is to tense that any commercial intercontinental distillery limited that aims to survive must be aware of the challenges of its fungibility and productivity obligation as both variable can make or destroy its future.

This study is largely centered on fungibility objective and ensure its ability to meet up the depositors demand thereby maximizing its value and there is also uncertainties in the asset management of the commercial intercontinental distillery limited as the new deposit does not correspond with the customer’s withdrawals, since demand is made at short notice. Therefore this study is aimed at the following goals.

• To know fungibility management will handle these uncertainties and determine their impact on productivity.
• Discovering the specific factors that are useful in improving productivity and fungibility position of the commercial intercontinental distillery limited
• To examine the cost of fungibility and ilfungibility levels at the performance of intercontinental distillery limited and length at which this fungibility can be used as competitive
• To take a critical view of the adopted fungibility measures of the intercontinental distillery limited and attempt to see how it has achieved.
• Finding out the impact of changes in fungibility levels on
• Aimed at discovering the credit and portfolio policies of the intercontinental distillery limited.
• Finally it will attempt to identify the basic causes of fungibility problems in Nigeria intercontinental distillery limited and to recommend appropriate measures to solve such problems.

 

1.5     RESEARCH QUESTIONS

Based on the study the following research questions are asked:

1. Is optimal fungibility in intercontinental distillery limited constrained by robust dividend policy?
2. Is optimal fungibility in intercontinental distillery limited constrained by excess fixed asset acquirement?
3. Is optimal   profit   in   intercontinental  distillery     limited constrained by idle cash availability?
4. Is optimal   profit   in   intercontinental  distillery     limited constrained by love productivity of staff?
5. Is optimal   profit   in   intercontinental  distillery     limited constrained by idle time-man-hour losses?
6. Is optimal   profit   in   intercontinental  distillery     limited constrained by wasteful fraudulence expenditure?

 

1.6     SIGNIFICANCE OF THE STUDY

For the fact the intercontinental distillery limited operate on fungibility and productivity motives in the mind to satisfy their major publics, the shareholders and depositors, the need arise for them to bring into agreement these two motives with the aim of satisfying these two public concurrently. With this the commercial breweries need impactive and efficient fungibility management approaches and principles that will help them realize these motives. The result gotten from this study will reveal the level of attachment of the intercontinental distillery limited to the monetary policies (fungibility ratios) establishing by the government and these will help the government to set appropriate fungibility ratio’s and cash ratio’s that will not be harmful to the operation and survival of the intercontinental distillery limited. It will also fungibility management and credit policy guidelines will affect minimize the impact of ilfungibility and help in providing impactive fungibility formulations.

 

1.6     SCOPE OF THE STUDY

This study on the impact of fungibility management on intercontinental distillery limited productivity is carried out to check the possibility of fungibility management brining a huge of profitable to the commercial breweries. It uses intercontinental distillery limited Effurun Delta state as its scope and it is carryout within 2007 to 2010 that’s a time frame of 4years.

 

1.7     LIMITATION OF THE STUDY

These covers the problem encountered. Limitation which the researcher anticipates will have some negative impact on the findings of the study. The study is prone to some constraints.

1. Finance: Considering the economic situation in the country coupled with the limitation of fund for executive of the project the chance of travelling together sufficient fact might be
2. Time: This study is likely to be limited by time constraint considering the need attend lectures and perform other activities like domestic chores.
3. Co-operation of Respondents: Some respondent might not be co-operative and this might the extent of the fact
4. Confidentially: The project might be limit by inabili0ty together relevant information because of the sensitively of some of the information which requires high degree of

 

1.8     DEFINITION OF TERMS

These are term that gives a bound knowledge and understanding about the study as well as impactive and efficiently guide the application of the issues of finding. Abousade such term that will be considered and as follow.

1. Cash management: This is refers to the planning and control of idle cash to ensure that there is a proper investment of cash. Cash management covers cash planning system and cash control system Nikolas Bazley Schroeder and Reyniod (1989).
2. Dividends: This is refers to the distribution on shaming of part of profit of a company shareholders dividend could be inform of cash in dividend; stock dividend and property dividend.

3. Fixed Assets: These are property owned by the company which is by nature fixed they are acquired not with the intention to resort but to be used in the business for a number of years. Wood and Omega.
4. Idle Time: This is refers to the non productive how the production hour. It is usually caused by machine break down shortage of orders from customer’s electricity failure etc. Aso Olu and Nassar (1997).
5. Internal Controls: these are procedure established by the management in order to secure on efficient and use of source resource and minimize the risk of frauds and errors to which the business is exposed Olusanya (2003).
6. Fungibility: This refers to the ability of the firm to meet its short term financial obligation when and as they fall The main concern of fungibility ratio is to measure the ability of the firm to meet their short maturing obligation.
7. Loans and Advances: These are funded credit risk which intercontinental distillery limited enters into with its
8. Productivity: This is the ability of a business to own profit over a period of time it is a result of a large number of policies and decision. Productivity ratio shows the combined impact of fungibility, asset management and debt management cooperating result Weiseh and Shout (1987).
9. Ratio: It is the mathematical relationship between two quantities in form of a fraction or percentage Olowe (2003).
10. Ratio Analysis: This is the calculation of relationship between V.
11. A-riables after proper identification and interpretation of information about the operation and state of affairs of business enterprise Olowe.
12. Working Capital: This refers to used running the day to day affair of the It is also refer to as a circulating capital on net asset that is current asset minus current liabilities. Smith Keith and Stephens (1986).

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