WORKING CAPITAL MANAGEMENT IN AUTOMOBILE INDUSTRY
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WORKING CAPITAL MANAGEMENT IN AUTOMOBILE INDUSTRY
ABSTRACT OF WORKING CAPITAL MANAGEMENT IN THE AUTOMOBILE INDUSTRY Working capital is a company’s ability to satisfy its short-term liabilities in full using its short-term assets.
As a result, an industry must always maintain a well-articulated and consistent management of its working capital.
This research work has been separated into three chapters to assist its presentation for our readers’ clear understanding. During the course of the investigation,
it was discovered that the automobile industry had appropriate working capital to increase the efficiency of its production. We discovered that the automobile industry has adequate and good quality capital position, despite the fact that it has no credit policy for its consumers.
We found that the automobile industry has effective working capital management based on these findings. We also made some helpful ideas to boost the efficiency of the industry’s working capital management.
The proposals include developing a credit policy and launching a marketing strategy, as well as organising a symposium and seminars on working capital management.
1.0 INTRODUCTION
1.1 BACKGROUND TO THE STUDY:
In the early 1970s, Nigeria had an economic boom, and manufacturing industries, despite extensive misapplication and resource diversion, produced attractive profits. As a result, companies thrived and prospered, and competent management became obsolete.
However, due to a drop in worldwide oil prices in the early 1980s, Nigeria began to experience an austere economic situation.
The business climate got so complex that most industrial industries and other areas of the economy began to struggle.
As a result, competent resource management became critical.
One of the greatest casualties was the manufacturing industries’ financial resources. The business’s liquid assets were insufficient to satisfy its day-to-day fund requirements, and a newly founded company requires appropriate working capital to begin operations properly.
Working capital management is critical to an industry’s ability to meet its financial obligations.
It is therefore necessary to illustrate the notion of working capital at this point. It represents an asset employed in an enterprise’s day-to-day mining.
Working capital is defined as the net investment in current assets.
Working capital also reflects a company’s ability to meet its short-term liabilities when they come due from its short-term assets.
However, the significance of working capital cannot be overstated. According to an Explicate poll, there is a growing awareness of the importance of capital and its impact on the success of a company organisation.
Based on the fundamental premises of our discussion, working capital management relates to all aspects of managing current assets and obligations. Working capital demands careful and vigilant management because its efficacy makes a bleak business likely and lucrative.
As a result of the impact of working capital on a firm, the purpose of this study is to evaluate working capital management in Anammco’s manufacturing industries.
1.2 STATEMENT OF THE PROBLEM:
A critical examination of the trajectory of commercial activity in Nigeria over several years will reveal a steady increase in cost and decrease in profit.
It begs the question why Nigerian manufacturing companies have not been working efficiently; is it due to a lack of raw materials? Is it a lack of managerial experience? Despite the fact that we observed the practise of working capital management in manufacturing companies, the problem persists.
Given all of these issues, as well as the fact that there is an awareness of the need for working capital management and that there is insufficient working capital in our manufacturing industries.
1.3 OBJECTIVE OF THE STUDY:
The study’s objectives are as follows:
1. To assess the critical importance of working capital management in manufacturing businesses.
2. To critically investigate the existence and quality of the automobile industry’s working capital.
3. Determine the overall contribution of working capital management to cost reduction.
4. To identify the factors impeding working capital management in manufacturing businesses.
1.4 THE SIGNIFICANCE OF THE STUDY:
This research will identify issues related to working capital management in manufacturing businesses.
It will highlight helpful information about potential areas for improvement.
It will be extremely beneficial to industry investors.
Finally, it will be a beneficial guide for future researchers who seek to delve into the issue.
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