APPRAISAL OF FINANCIAL MANAGEMENT PRACTICES IN A MANUFACTURING INDUSTRY. A CASE STUDY OF EAGLE CEMENT COMPANY PLC. NKALAGU

CHAPTER ONE

1.0 INTRODUCTION

Almost all kinds of business activities directly or indirectly involve the acquisition and use of funds. There exists an inseparable relationship between finance on the hard and production and other functions on the other. In a business set up, the functions of recruitment and promotion of employees are clearly the work of the personnel department. Sales promotion policies come within the functions of the marketing department. These activities performed by these departments (personnel and marketing departments) require outlay of funds and therefore affect resources. The finance function of raising and using money although has a significant effect on other functions but it need not necessary limited the general running of the business. Generally firms formulate their policies (marketing productions, personnel and other policies) most of the time, to tally with the financial resources of the company available to them.

The word “Finance” is viewed from different perspective by different group thus: – a. A layman sees finance as the volume of money in his prose, vault and at the bank. b. Investors sees finance as the provision of funds as at the time it is need for investment. It goes beyond coursing and applying the fund for profit maximization as well as the state of sharing the profits. c. Academic sees finance as the science of fund management. The investor view about finance shall be upheld in this write up. This because it emphasizes on profit making for the maximization of shareholders wealth. Wealth maximization is one of the corporate financial objectives of a firms. This can only be achieved by efficient and effective management of the company’s resources. Financial management involves all the activities that are concerned with planning cash and credit requirement, including the effective control of the financial resources The activities could be segregated as follows i. Forecasting the future availability of and requirements of cash ii. Converting forecasts into plans and budgets.