CHAPTER ONE

INTRODUCTION

1.1  Background of the Study

Cash management is essential to the survival and growth of any manufacturing industry. Managing an industry financial operation requires knowledge of economy and ways to maximize revenue. Without cash management, the manufacturing industry will be unable to function because there are no cash management techniques. The manufacturing industries faced increased global competitions that challenge it to become increasingly more competitive. In response to this, many manufacturers are focusing on efficiency through cost reduction to stay competitive and profitable.

Impact of cash management encompasses proper management of cash inflows and cash outflows which entails, synchronizing cash inflows and outflows and accelerating of cash inflows and controlling cash outflows, getting available fund to where they are needed and controlling disbursement.

Cash is commonly referred to as life blood of a business. Cash also refers to currency (coin and paper) that is services. Cash management has to do with managing the money of the firm in order to attain maximum cash available and invest idle funds. There is need for effective and efficient cash management especially in the period of inflation to ensure survival of the business.

This study would critically examine the impact of cash management in the manufacturing industry with specific focus on champion breweries plc, Uyo.

1.2  Statement of the Problem

The adverse economic factors over the years have remarkable effect on the management of cash in the manufacturing industries. High state of inflation, declining economic activities, increase in the price of petroleum product have contributed to reducing consumer purchasing power and this has been a great negative impact  on the proper cash management in the manufacturing industry which champion breweries plc is not left out. These issues raise the researchers concern, to examine the impact of cash management in the manufacturing industries.

1.3  Objectives of the Study

1. To examine the impact of cash management in the manufacturing industry.
2. To highlight risks associated with holding cash in an organization.
3. To examine problems associated with cash management in the manufacturing industry.
4. To develop appropriate strategies for cash management in the manufacturing industry.

1.4  Research Questions

For the purpose of this study, the following research questions were formulated;

1. What are the impact of cash management in the manufacturing industry?
2. What are risks associated with holding cash in an organization?
3. What are the problems associated with cash management in the manufacturing industry?
4. What are the appropriate strategies for cash management in the manufacturing industry?

1.5  Significance of the Study

• In the recent time due to changes in business generally, greater emphasis have been placed on cash management.
• The important of this study is that it will highlight the consequences of not having and operating an efficient cash management system in business organizations.
• This research work will also expose the management of manufacturing organization to effective way to manage cash towards the achievement of organizational goals.

1.6  Scope of the Study

This research work centered on the impact of cash management in the manufacturing industry using