1.0 INTRODUCTION
1.1BACKGROUND OF THE STUDY
Financial planning formulates the way financial goals are to be achieved. A financial plan is thus a statement of what is to be as a result of investment need or opportunity. Before we go in detail, it is good we know the meaning of the key words financial planning and control.
The term finance can acquire different meanings at any given point in time depending on the context of use. The Oxford Advanced Learner Dictionary of English described finance as the science of or the management of money.
From this description, three distinct definition of finance can be seen viz:
a)Finance as money
b)Finance as the management of money
c)Finance as scientific study of money.
According to Chukwudire (1996:1) in his text essential of business finance, said that finance is the provision of money. Aguolu (1981:1) in his text financial management 2nd edition has seen finance as income and expenditure activities of economic unit.
Planning on the otherhand means goals and objective and then devising strategies, policies, and procedures for achieving them. According to New (200:71) every organization, whether economic social or political makes plans for the future. An organization without plan is no longer an organization. It could be likened to an individual without coordination in his/her activities or an aeroplane with a pair of compass degree and dimension. As organization vary in size, so also their plan for their future. Its success also depends on the amount of plan injected into the effort of the organization. Contend in effect means checking the performance whether it confirms with the organization set standards and objectives. Form the above definitions, financial planning and control entails how money should be raised for up keep of a business setup, be it private, public company or any form of business enterprises.
Any form of business set up like proprietorship, partnership and corporation makes financial plans and adopts good financial control measures to see that money or fund acquired are well invested into business so that profit is made and the principal together with the interest are returned at the stipulated time and at accepted rate. There are many sources of funding while making financial plans companies and these includes borrowing from banks, which involves loans and overdraft, sales of company’s product to receive immediate cash/cash sales and sales of shares. These sources of funds mentioned is being adopted by companies depending on the nature of capital project one decides to embark on.
Companies embarking on capital intense project will adopt long-term borrowing, long-term capital project range from 1-5 years or more.
The span of years enables the firm’s financial plans. This involves long-term loans and over draft. There would be changes during the period, as the long period of time will enable the firm have major changes or reorganization short-term loan also help companies have some minor project executed. These project last for one year. Major project are discarded, as the fund available will not carry the firm along with the other project. That is to say that working capital will be hampered if the short run project are embarked on sale of shares, ie making the shares of a particular firm public so that people will subscribe, by so doing, the firm will realize substantial capital to enable them keep off. These shares being sold are divided into various categories like ordinary shares, preference shares, and cumulative preference shares. Issue of debenture is another way of sourcing fund by companies. Sale of shares by companies to shareholders, bonds to the ownership of the company ie the shareholders who are the risk bearers. Companies, which involves in sales of share are mostly cooperations, which may be public or private limited companies. These public limited companies(LC) its formulation ranges from 7 to any number of people. But in the content, we shall be restricted to private limited company.
Article of association or incorporation covers its aspect of formulation of companies as contained in companies and aid matter decree 1990. Financial planning and control could be said to be a system, which is being used to increase the overall management efficiency. It is concerned with planning for the resources to assist in achieving the objective of the firm,. It involves a decision criteria as deemed fit by an organization. A firm accepts a project if its internal rate of return (IRR) is higher and rejects a project with low internal rate of return (IRR). Firm also accepts models with shorter pay back period compared with the assets useful life, which is suppose to be greater. There, models are called capital budgeting. Sales of assets is involved in financial planning. At times firm decide to dispose its obsolete ones it involves goods or service able machine. Intangible assets are rarely involved in this type of disposal of assets. Plough back proceeds from investment to business means trading on common stockholder’s equity by so doing the company enjoys financial leverage, proceeds ploughed back are retained earning of common stock holders, which have occurred to then as dividends, on common stock holder, in a nutshell, to ensure the continuity of any organization, financial planning and control is very essential.
It involves stabling the objectives of the firm, discovering the strength and weakness of the existing firm, the opportunities, and threats that it faces, it is often called position audit, that is the ability to decide the past the present and future of the firm. It equally talks about the acquisition and allocation of resources. It is the key factors of revealing the possible financial risk of an organization and ensure the possible way to cub them for management efficiency.
Financial plans are also made when manufacturing firm increase or reduce the prices of their products to attract customer’s patronage. The firm may embark on cash discount bulk breaking. Bulk breaking arises when wholesalers buy big quantities of a company’s products purchased. It is equally called quality discount. These types of financial plans are introduced when companies are in dare need of physical cash.
Furthermore, the efficiency and effectiveness of any organization depends on when the objectives of that organization are achieved. There is need to have a clear knowledge of the objective of the organization otherwise it could be impossible to identify deviation and set targets for achieving them. Organization have responsibility to various interest groups including employees, customers, suppliers, creditors and shareholders. The goal is met by maximizing the total market value of the company’s share. If the shareholders as financiers become dissatisfied with the company’s performance, they may withdraw their support causing loss of moral of personnel and shortage of funds. Any of these can lead to talk over, or close down of the company. The other objectives whether societak or technological must primarily be profitable.
TABLE OF CONTENTS
Title Pageii
Approval pageiii
Dedicationiv
Acknowledgementv
Abstractvi
Table of Contentsviii
CHAPTER ONE
INTRODUCTION
1.1Background of the study1
1.2Statement of the problem 7
1.3Purpose of the study9
1.4Scope of the Study10
1.5Research Question11
1.6Limitation of the study12
1.7Definition of terms14
CHAPTER TWO
LITERATURE REVIEW
2.1Brief History of Banking in Nigeria 16
2.2Origin of money22
2.3Development of Banking23
2.4Account maintained by United Bank
for Africa Plc 27
2.5The Role of Management Information System
In Improve customer service 29
2.6What is Banking All About 33
2.7Who is a Customer 34
2.8What is Management 36
2.9What is Information 38
2.10What is MIS40
2.11How Does MIS Relate to and Influence
Customer Service 43
CHAPTER THREE
RESEARCH DESIGN AND METHODOLOGY
3.1Research Design 47
3.2Area of the study47
3.3Population of the study48
3.4Sample and sampling Procedure 48
3.5Instrument of data Collection50
3.6Validation of Instrument 51
3.7Reliability of the Instrument 51
3.8Methods of data collection52
3.9Method of data analysis 53
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
4.1Presentation and Analysis of Data54
4.2Summary of Findings71
CHAPTER FIVE
Discussion, Recommendation and Conclusion
5.1Discussions of Findings75
5.2Implication of the Research Finding84
5.3Conclusions85
5.4Suggestion for Further Studies 87
Bibliography
Appendix
Questionnaire