CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
The attainment of corporate objectives is a function of the prudent use of committed economic resources. Towards this, many industries adopt various strategies being which financial planning and control in this regards empirical evidences have revealed that the newspaper industry is no exception.
This paper therefore aims of presenting a theoretical and empirical study to explain the degree of financial planning and control that exist in the newspaper industry in Nigeria. Certain indispensable tools used in presenting relevant facts fellows.The budgetary control system, functional budget planning, control project planning, control cash capital budget and balance sheet analysis have been given due primness.
A historical resume of the newspaper industry precedes the practice. The Daily Times of Nigeria Limited and the Vanguard Newspaper of Nigeria have been chosen for the empirical studies.
The major factors that influence choices are the operational data available and ownership of each. Both companies made available relevant data when requested for the equity share of Daily Times Nigeria Limited is 60% owned by the federal government of Nigeria and 40% owned by members of the public while the equity share capital of Vanguard Newspaper of Nigeria is 100% privately owned.
These constitute a good case material since the private and public sectors of the economy are covered. Other newspaper not selected has been discussed of micro level.
1.2 Statement of the Problem
Financial planning is a guide to a particular set of financial goals or attainment and it is obvious that without a guide to a particular set of goals it will be very difficult to achieve that particular set of goals economically.
However, many organizations today do not make good financial plans about the operations of their organizations and where they do; they do not control their performances alongside their financial plan very well to control the controllable factors in their plans to enable them to achieve their financial goals.
Financial planning, which is one of the tools that could be used by business organizations to achieve their profit plan, unfortunately is not being used properly by many business organizations. In essence, many business organizations have failed in their profit plan due to lack of financial planning in their organization.
In other words, if a study like this is not carried out or this study not taken seriously by organizations, then the inevitable problems that will occur is that organizations will not be able to minimize expenditure or cost and also will not be able to maximize productivity, in other words, not maximizing profitability.
1.3 Objectives of the Study
The purpose of this project work is to identify the contributions of financial planning and control Nigeria media outfit. Specific objectives of the study are as follows:
i. To assess the influence of short-term financial plans on the profitability of Vanguard Newspaper of Nigeria.
ii. To evaluate the influence of medium-term planning on the profitability of Vanguard Newspaper of Nigeria
1.4 Research Questions
The following questions were formulated for the study:
i. To what extent does short-term financial plan influence the profitability of Vanguard Newspaper of Nigeria?
ii To what extent does medium-term financial plan influence Vanguard Newspaper of Nigeria and enhance management efficiency?
1.5 Research Hypothesis
The following hypotheses were formulated and tested in the study.
Ho1: Short term financial plans do not influence the profitability of Vanguard Newspaper of Nigeria
HA1: Short term financial plans influence the profitability of Vanguard Newspaper of Nigeria.
Ho2: Medium term financial plans do not influence the profitability of Nigerian Breweries, Enugu
HA2: Medium term financial plans influence the profitability of Vanguard Newspaper of Nigeria.
1.6 Significance of the Study
The study intent to take a look at the financial planning and control generated by vanguard newspaper industries Nigeria and up pick point on modern trend in this project.
The difficulties being encountered by prospecting financial planning and control in getting to establish a stronger management in the newspaper industries.
Suggestion being proffered to enhance self reliance effective financial planning and control.
1.7 Scope of the Study
The study intent to core financial planning in Vanguard Newspaper of Nigeria and has taken a other Nigeria outfit in the country. And point on the modern trends and contribution to the economy to enhance effective management and control in Vanguard Newspaper industry in Nigeria.
This study intent covering only vanguards newspaper as case study as media outfit enterprise.
1.8 Limitations of the Study
Like any other research project, this study is not without limitations. Some of the difficulties encountered in carrying the study included:
a) Inability of the researcher to obtain adequate and relevant data from the organization, especially on sensitive economic issues that organizations are secretive about.
b) Financial constraint is another limitation. Inadequacy of finance helped to restrict the study to only Vanguard Newspaper of Nigeria whereas the researcher would have loved to go beyond that.
c) The uncompromising nature of most respondents especially to questionnaires and verbal questions was another difficulty encountered bythe researcher.
d) Lack of time to carryout out the personal observations of the enterprise operations properly, as well as attend to other academic activities was a major hindrance.
1.9 Definition of Terms
§ Financial plan: A financial plan is also called capital plan. It is an estimate of the total capital requirements of the company. Financial plan gives a total picture of the future financial activities of the company.
§ Short-term financial plan: This plan is prepared for maximum period of one (1) year. This plan looks after the working capital needs of the company.
§ Medium-term financial plan: This plan is prepared for a period of one (1) to five (5) years. This plan looks after replacements and maintenance of assets, research and development, etc.
§ Long-term financial plan: This is prepared for a period of more than five (5) years. This plan looks after the long-term financial objectives of the company, its capital structure, expansion activities, etc.
§ Financial planning: This means to prepare a financial plan. It is the mathematical sum of the following parameters (functions). Financial Resources (FR) + Financial Techniques (FT) = Financial Planning (FP).
§ Planning: Planning can be defined as the establishment of activities and the formulation, evaluation and election of the policies strategies, tactics and action required to achieve these objectives.
§ Strategic Planning: The formulation, evaluation and selection of strategies for the purpose of preparing a long term plan to attain objectives.
§ Tactical Planning: Is the process of preparing detailed short term (usually one year) plans for the functions, activities and department of the organization thus converting the long term corporation plan into action.
§ Control: Control is concern with the different use of resources to achieve a previously, determine objective or set of objective within a plan productivity (total factor basis).
§ Profitability: Profitability is the ability of a business to earn a profit. A profit is what is left of the revenue a business generates after it pays all expenses directly related to the generation of the revenue such as producing a product, and other expenses related to the conduct of the business activities.
§ Programme Planning and Budgeting System (PPBS): Is a radical approach to budgeting based programmes which are group of activities with common objectives.
