THE SIGNIFICANCE OF CASH MANAGEMENT IN THE FINANCIAL
SECTOR OF NIGERIAN ECONOMY
ABSTRACT
This project is considered with the significance of
cash management in the financial sector.
Cash management is important in the financial sector of any
economy.
This research work looks into the effects of cash
management in the financial institution.
In this research work, primary and secondary data were
utilized while chi – square was used to analysed the data collected.
It was found out that management of banking operation have
not be able to formulate profit cash requirement.
The conclusion is that financial institution in Nigeria
have liquidity and capitalization problems, the liquidity problems cover both
cash shortage and occasion surplus cash.
It is my hope that this research will help the bank
financial institution on how to run effective and efficient cash management
system.
TABLE OF CONTENTS
Title Pages
Title i
Certification ii
Dedication iii
Acknowledgement iv
Abstract vi
Table
of Contents vii
CHAPTER ONE:
1.1 Background to the Study 1
1.2 State of the Problem 4
1.3 Objectives of the Study 5
1.4 Significance of the Study 6
1.5 Research Questions/ Hypotheses 7
1.5.1. Research Questions 7
1.5.2 Research Hypothesis 7
1.6 Research Methodology 8
1.7 Scope and
limitations of the study 9
1.8 Definition of Terms 10
1.9 Organization
of the Study 13
CHAPTER TWO
2.0
Literature Review 14
2.1 Historical Background of Ecobank
International Plc 14
2.2 Conceptual Explanations 15
2.2.1 Cash Management 15
2.2.2
Cash
Planning 16
2.2.3
Managing the Cash
Flow 17
2.2.4
Optimum Cash
Balance 17
2.2.5
Investing idle
Cash 17
2.3 Demand for Money or Cash 21
2.3.1 Factors that Affect the Demand for Money 22
2.3.2 Reason for Holding Cash 22
2.4 Cash Management Service Generally Offered 23
2.4.1 Account Reconcilement Service 23
2.4.2 Advance Web Services 24
2.4.3 Armored Car Services 24
2.4.4 Automated Clearing House 24
2.4.5 Balancing Reporting Service 24
2.4.6 Lockbox Retail Services 24
2.4.7 Lockbox – Positive Pay 25
2.4.8 Positive Pay 25
2.4.9 Sweep Accounts 25
2.4.10 Wire Transfer 25
2.4.11 Controlled Disbursement 26
2.5 Ecobank International Plc. Cash Management 26
2.5.1 Account Management 27
2.5.2 Payable Management 27
2.5.3 Receivable Management 28
2.5.4 Liquidity Management 28
2.6 Problem of Cash Management 29
2.6.1 Cash Flow Problem 29
2.6.2 Inflation 29
2.6.3 Growth 29
2.6.4 Change in Interest Rates 29
2.6.5 Level of Cash Reserves 30
2.7 Method of Solving Cash Flow Problems 30
2.7.1. Cash Budgeting 30
2.7.2 Working Capital the Control of Cash 30
2.8. Source of Finance 31
2.9 Over Capitalization 32
CHAPTER THREE
3.0 Research Methodology 33
3.1 Research Focus 33
3.2 Research Instrument 34
3.3 Restatement of Research Question/Hypothesis
34
3.4 Population and Sampling of the Study 36
3.5 Sources of Data Collection 36
3.5.1 Primary Data 36
3.5.2 Secondary Data 36
3..6 Description of Questionnaire 37
3.7 Method of Data Analysis and Description of
Tools of Analysis. 37
CHAPTER FOUR
4.0 Data Analysis, Interpretation and
Discussion of Findings 38
4.1 Interpretation of Items 38
4.2 Analysis of Data 38
4.3 Analysis of Table 39
4.3.1 Table 1: Department of the Staff 39
4.3.2 Table 2: Working Experience of the Respondents 40
4.3.3 Table 3: Academic Qualification 40
4.4 Test of Hypothesis 45
CHAPTER FIVE
5.0
Summary,
Conclusion, Recommendation and Suggestion for
Further Studies 51
5.1
Summary 51
5.2
Conclusion 51
5.3
Recommendations 52
5.4
Suggestion for
Further Studies 53
Bibliography 54
Appendix A: 56
Questionnaire 57
CHAPTER ONE
1.1
BACKGROUND OF THE STUDY
Cash
is essential and very important for the operation of any business. It is needed
to carry out normal day to day activities of a business. It also the ultimate
output expected to be realized in exchange for services rendered to customers.
Cash
is the money which a firm can disburse immensely without any restriction. Doing
business takes cash and profitability produces cash. As business grows much
cash is required to keep the business on a going concern. Money is required at
the right time and in right amount.
This
forms the basis part of cash management system that will be discussed in this
project.
Cash
management is significant in financial sector of Nigeria Economy because cash
constitute the smallest portion of the total current asset yet managements
considerable time is devoted in managing it.
Cash
management is concerned with managing of:
i. Cash flows in and out of the financial institutions.
ii. Cash
balanced held by an organization at a point in time by financial deficit or
investing surplus cash.
Cash management is
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