1.0 INTRODUCTION
Finance is the science of funds management, or the allocation of assets and liabilities over time under conditions of certainty and uncertainty. The key point in finance is the time value of money which stated based on their risk level, and expected rate of return. Finance can be broken into three different categories: Public, corporate and personal finance .
Public finance describes finance as it related to sovereign states and sub-national entities eg. States and provinces, countries, municipalities, etc and related public entities eg. School districts or agencies.
Public finance is concerned with:
Corporate finance: This is the area of finance that deals with the source of funding and the capital structure of coporations and the actions that managers take to increase the value of the firm to the shareholders, as well as the tools and analysis used to allocate financial resources.
Corporate finance also includes within its scope business valuation, stock investing or investment management.
Personal finance involves paying for education, financing durable goods such as real estate and cars, buying insurance, paying for a loan or debt obligation etc.
On the other hand, management in all business and organizational activities is the act of coordinating the efforts of people to accomplish desired goals and objectives using available resources efficiently and effectively. Management comprises planning, organizing, staffing, leading, or directing and controlling.
Financial management means the efficient and effective management of money (fund) in such a manner as to accomplish the objectives of the organization it includes how to raise the capital, how to allocate it ie, capital budgeting. Not only about long term budgeting but also how to allocate the short term resources like current assets.
Finance has been as the life blood of any enterprises every business organization needs finance to invest in operations, to pay it obligations as they become due to and provide return to individuals.
1.1 BACKGROUND TO THE STUDY
History of various developing countries has shown that industrial revolution had been the main brain behind their economic survival their great financial strength was built up principally through the acquisition of industrial and technological power. Medium scale firms indisputably constitute the bed rock for meaningful industrialization and consequently the acquisition of industrial and technological power. Without exception all sign industrial organizations either multinational or indigenous started in a small way or their own various levels.
It is observed that the distress to establish medium scale enterprises is the underlying factor of an individual action to help the developing country as a whole. It is the largest single programmed and one of the municipal instruments of community development. To sustain the continuity of a medium scale enterprises though cash and its effective utilization is a necessity. Cash has been as the life, blood of any enterprises. Every business organization needs cash to invest in operations, to pay it’s obligation as they become due to and to provide rheum to investors in the form of interest and individuals. Cash is the money which a business organization and disburse immediately without any restriction. What is regarded as cash, with regards to a medium scale firm, undertaking includes coins, currency and cheques held by an organization and balances in it’s bank accounts and marketable securities or bank fine deposits, all being equivalent of cash since cash is one of the most useful resources of any organization, it is necessary to special attention to cash to ensure it’s proper utilization.
Mr Biggs, a reputable medium scale firm in Enugu Metropolis concentrates on the production of high quality bread, cakes, snack and all kind of food out side the buying and selling out fit. Concentration of many other medium scale firm, quicker and more money by buying and selling satainly, this is only for a short period but it ensures a longer and lasting profit.
However, noticeable features of medium scale firm are that of concentration in the hands of one or a few persons. These people exercise most of the controls necessary for running the firms and because they are directly involved on the business the nature of control differs from what would be expected in a big organization where ownership and management are separated and an elaborate administration structure is a necessity.
Medium scale enterprises have been identified as a basic tool for rural development. They have taken a turn for the better sense in the past decades. The prospect for this decade and subsequence decade are bright. The enterprising in geniality and enthusiasm of any Nigerians are great challenge to the development of the country as a whole.
To achieve this depends solely on the proper management of medium scale firms, taking up to the challenge from internal sourcing of solution. This study titled “financial management in medium scale enterprises” a case study of Mr Biggs Enugu attempts to determine:-
Finally, this study would be a great significant to the project writer since it will endow her with the articulation of her duties as an accountant in any business organization.
It is expected that this study would be of vital benefit to a member of entrepreneurs, businessmen and organizations in the following ways:-
1.6 SCOPE OF THE STUDY
The study titled “financial management in medium scale firms” could have been extended to cover the whole of Enugu Metropolis and beyond all aspect for the problems of medium enterprises, but due to the huge financial requirement involved, coupled with the short time frame within which the study must be conducted, and completed, the author was compelled to limit the scope of medium firm using Mr. Biggs’s Enugu as a case study.
Due to academic stress and lack of adequate fund or fund or finance, I the researcher could not reach as many as organizations where adequate information’s could be ascertained.
At this stage, the author finds it necessary to defined and explain some of the terms, which have been used in the course of this study.
(2)
depress a medium scale enterprises as an enterprises whose annual turnover is not more than N2 million or whose net value (Net worth) is not more than N1 million.In this project work, I the author defines medium scale enterprise or firm as those with capital structure of not more than one or few persons than N500,000 which are owned, managed and controlled by and whose side does not permit for elaborate administrative structure.