Select Currency
Translate this page

IMPACT OF ADEQUATE WORKING CAPITAL ON PROFITABILITY OF BANKS

Format: MS WORD  |  Chapter: 1-5  |  Pages: 65  |  986 Users found this project useful  |  Price NGN5,000

  DOWNLOAD THE FULL PROJECT

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND TO THE STUDY

Many corporate bodies into problems because of mismanagement of working capital and inability to determine the effectiveness of working capital component on the organization performance. Working capital is the backbone of any organization be it finance / bank, manufacturing or trading. It is so because, if working capital of a company is not properly managed, it could lead to the total breakdown and closure of the organization. Hence, management of working capital is being critically analyzed in this research work. Working capital in bank refers to items requires by the banks to ensure efficient delivery of its operation on day-to-day basis. It can be defined as the excess of current asset over current liabilities. Generally, working capital management is concerned with the managing of:

. Current Asset: Which majorly consist of stock, trade debtor’s payment or creditors balance at bank, and cash in hand? Although the component of each variables of current asset depends on the type of industry in question e.g while stock may be subdivided into raw materials, work in progress and finished good. In banking industry their stock is mainly money or cash. 

. Current Liabilities: Trade creditors, accrued, expenses, taxation. Furthermore, cash is an important component of working capital, a pointer to this fact is the even though cash constituted the smallest portion of the total current asset yet management of any organization devotes considerable time to its management. The following are the consequence of efficient management of working capital.

i.   Regular operation will not be possible, as inadequacy of funds will course unplanned closure.   

ii. The incessant slowing down of banking activities leading to inability to needs customers. This may lead to bank customers closing their account and going for other banks that are effective in bank transaction.

iii.  Low level of availability of find may hamper the extension of credit and bring about inability to meet customer with drawals.

iv.  Deposit that has matured may be impossible to repay which may resort into litigation and consequent upon which bank may be waind up.

1.2    JUSTIFICATION OF THE STUDY

This research works reveal how important working capitals improve tremendously profitability of bank. The research conducted in this research show how availability of adequate working capital on increase profitability of Wema Bank tremendous. The impact of working capital helps bank to achieve its aims and objectives of profit making. It also helps in the efficiency of operation and this improve customer confidence on banker due to the fact that banker always able to meet customer demand at any time he/she demand for his / her money.

In addition, the research conducted shows that availability of working capital helps bank to employ its excess or surplus working capital an viable project and investment that improve its profitability tremendously. Finally, the availability of adequate working capital is a great tools to help banks to improve its profitability tremendously. It is very important that every bank should try to increase their working capital which will have positive impact on their profitability and improve their efficiency of operation.

1.3   STATEMENT OF THE PROBLEMS

These are the problems that are envisaged in this research work. The first part relates to problems directly attributable to the research topic, and the other relates to the problems encountered in the course of carrying out the research work.  

The following problems relate to working capital as a research topic:

1.  In ability to determine the adequate level of working capital may affect availability of funds in banks which may in turn affect loan portfolio since there was not enough fund to give out as loan.

2. Where a bank experience increase in its number of customers, there is likelihood that demand for credit will increase. If it does, and funds are not available, level of operation will be hampered.

The following problems are assumed to be encountered in the course of carrying out the research work.     

i.  The response to the questionnaires by the respondents cannot be taken to the totally correct .

ii. There is also the problem of implementation of working capital policies even when it was correctly formulated.

iii. It is also assumed that to some extend. The respondents to the questionnaire might not want to supply important information considered confidential to the bank.   

1.4   OBJECTIVES OF THE STUDY

The objectives of this research work is to study bank’s level of working capital to determine its adequacy as well determine its impact on the level of profitability.

1.5  TESTING FOR HYPOTHESIS

For the purpose of this study, the following hypothesis were tested.

Ho: That effective working capital management in bank will improve level of profitability.

Hi: That effective working capital management in bank will not improve level of profitability.

1.6   RESEARCH METHODOLOGY

The study will seek to answer the following questions. But in answering the question, the use of personal interviews, textbooks and journals will be employed. The answers are considered to the final output of this research study. The questions include:

1.  What is the need for an effective working capital?

2.  What is the importance of cash as a working capital tools?

3.  How can working capital be effectively managed?

1.7   SCOPE OF THE STUDY

This study will cover several areas to shows the impacts of adequate working capital on profitability of banks with special reference to Wema Bank Plc, Apata Ibadan. This study will also include the literature review of different sholars on the subject matter i.e. the benefits to the derived on adequate working capital in relating to profitability of banks.    

1.8   LIMITATION OF THE STUDY

The research is designed to cover wide are but due to some limitation which deferent researchers to cover much area like

i.   Problem of finance, which really limit our research to certain area.

ii.  Another problem that stands as a limiting factor. There was no sufficient time for us to carryout much research.

iii. Inadequacy of materials, the absence of necessary materials in the school library has narrowed the way of getting materials.    

However, despite all these short-coming, the project was written with adequate information gathered to produce meaningful and comprehensive work.

1.8   DEFINITION OF TERMS

Cash Budget: This is the summary statement of a firm’s expected cash inflows and outflows over a projected period of time.

Cross Working Capital: This refers to the firm’s investment incurrent asset which can be easily converted into cash within an accounting year.

Working Capital: This is the excess of current assets over current liabilities. The surplus which would be available for work.

Liabilities: This is a debt owe by the company and will be settled at stipulated time.

Prepayment: This is the payment made now and y the benefit in advance or nearest future.

Cash: This is the money which the bank can disburse easily and immediately without restriction.

Collateral Security: This is the real or tangible asset which can be used as surely for the loan secure.

Overdraft: It is a relationship exist between banker and customer whereby bank allows its customer to withdraw funds in excess up to a certain specified limit during a stipulated period.

  DOWNLOAD THE FULL PROJECT

IMPACT OF ADEQUATE WORKING CAPITAL ON PROFITABILITY OF BANKS

Not The Topic You Are Looking For?



For Quick Help Chat with Us Now!

+234 813 292 6373

+233 55 397 8005


HOW TO GET THE COMPLETE PROJECT ON IMPACT OF ADEQUATE WORKING CAPITAL ON PROFITABILITY OF BANKS INSTANTLY

  • Click on the Download Button above.
  • Select any option to get the complete project immediately.
  • Chat with Our Instant Help Desk on +234 813 292 6373 for further assistance.
  • All projects on our website are well researched by professionals with high level of professionalism.

Here's what our amazing customers are saying

MATTHEW NGBEDE
Ahmadu Bello University
I wish I knew you guys when I wrote my first degree project, it took so much time and effort then. Now, with just a click of a button, I got my complete project in less than 15 minutes. You guys are too amazing!
Excellent
Emmanuel Essential
Kogi state University
I actually took the risk,you know first time stuff But i was suprised i received as requested. I love you guys 🌟 🌟 🌟 🌟
Very Good
Stancy M
Abia State University, Uturu
I did not see my project topic on your website so I decided to call your customer care number, the attention I got was epic! I got help from the beginning to the end of my project in just 3 days, they even taught me how to defend my project and I got a 'B' at the end. Thank you so much iprojectmaster, infact, I owe my graduating well today to you guys...
Excellent
Abraham Ogbanje
NATIONAL OPEN UNIVERSITY OF NIGERIA
At first I was afraid.. But I discovered they are legit. I will bring more patronize
Very Good
Samuel From Ajayi Crowther University
You guys just made life easier for students. Thanks alot iprojectmaster.com
Excellent
Abdul Mateen Iddrisu
UDS
At first I taught is a site full of fraudsters until I saw my project in my Gmail after my payment.. THANK YOU IPROJECTMASTER and May God the almighty bless u guys abundantly
Excellent
Gbadamosi Solomon Oluwabunmi
Lasu
Swift delivery within 9 minutes of payment. Thank you project master
Excellent
Abdulrahman Jibrin
Nti Abaji
Nice one work prompt delivery tanx
Very Good
Azeez Abiodun
Moshood Abiola polytechnic
I actually googled and saw about iproject master, copied the number and contacted them through WhatsApp to ask for the availability of the material and to my luck they have it. So there was a delay with the project due to the covid19 pandemic. I was really scared before making the payment cause I’ve been scammed twice, they attended so well to me and that made me trust the process and made the payment and provided them with proof, I got my material in less than 10minutes
Very Good
JONNAH EHIS
Ajayi Crowther University, Oyo
I was scared at first when I saw your website but I decided to risk my last 3k and surprisingly I got my complete project in my email box instantly. This is so nice!!!
Excellent

FREQUENTLY ASKED QUESTIONS

How do I get this complete project on IMPACT OF ADEQUATE WORKING CAPITAL ON PROFITABILITY OF BANKS?

Simply click on the Download button above and follow the procedure stated.

I have a fresh topic that is not on your website. How do I go about it?

How fast can I get this complete project on IMPACT OF ADEQUATE WORKING CAPITAL ON PROFITABILITY OF BANKS?

Within 15 minutes if you want this exact project topic without adjustment

Is it a complete research project or just materials?

It is a Complete Research Project i.e Chapters 1-5, Abstract, Table of Contents, Full References, Questionnaires / Secondary Data

What if I want to change the case study for IMPACT OF ADEQUATE WORKING CAPITAL ON PROFITABILITY OF BANKS, What do i do?

Chat with Our Instant Help Desk Now: +234 813 292 6373 and you will be responded to immediately

How will I get my complete project?

Your Complete Project Material will be sent to your Email Address in Ms Word document format

Can I get my Complete Project through WhatsApp?

Yes! We can send your Complete Research Project to your WhatsApp Number

What if my Project Supervisor made some changes to a topic i picked from your website?

Call Our Instant Help Desk Now: +234 813 292 6373 and you will be responded to immediately

Do you assist students with Assignment and Project Proposal?

Yes! Call Our Instant Help Desk Now: +234 813 292 6373 and you will be responded to immediately

What if i do not have any project topic idea at all?

Smiles! We've Got You Covered. Chat with us on WhatsApp Now to Get Instant Help: +234 813 292 6373

How can i trust this site?

We are well aware of fraudulent activities that have been happening on the internet. It is regrettable, but hopefully declining. However, we wish to reinstate to our esteemed clients that we are genuine and duly registered with the Corporate Affairs Commission as "PRIMEDGE TECHNOLOGY". This site runs on Secure Sockets Layer (SSL), therefore all transactions on this site are HIGHLY secure and safe!