FINANCING WORKING CAPITAL IN A DEPRESSED ECONOMY - A CASE STUDY OF PVC MANUFACTURERS NIGERIA LIMITED
FINANCING WORKING CAPITAL IN A DEPRESSED ECONOMY - A CASE STUDY OF PVC MANUFACTURERS NIGERIA LIMITED
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Date
1995-09
Authors
O L U W A R O T I M I, F A K O Y E J O F R A N C I S
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Abstract
A B S T R A C T
Working Capital represents the excess of Current assets
over Current Liabilities, Current Assets comprise Stocks
Accounts Receivable, Cash, Marketable securities. Current
Liabilities are Notes Payable, Trade Creditors, Bank
Overdrafts, Short-term Loans, Accruals.
PVC Manufacturers (Nig) Ltd commenced operation in 1989
in a depressed Nigerian Economy characterised by high
inflation, low capacity utilisation, massive unemployment,
depreciating Naira value, high interest rate, weak purchasing
power, etc.
The technique adopted in this project was examination of
Company's records and documents coupled with direct
observation of its day- to - day activities. The following
problems and weaknesses are highlighted in the study:-
i. Enormous amount required for raw materials
ii. Scarcity of foreign Exchange
iii. Frequent stock-outs and factory closures
iv. Virtual dependence on the imported materials because
NNPC is yet to commence production of its major raw
mater ials.
v. Long delay in securing bank facilities,
vi. Poor debt servicing.
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Adequate working capital is essential to an
organisation's survival. Improved debt servicing will
facilitate the company's ability to raise finance in future.
Description
DEPARTMENT OF BUSINESS ADMINISTRATION
INSTITUTE OF ADMINISTRATION
AHMADU BELLO UNIVERSITY
ZARIA.
Keywords
FINANCING,, WORKING,, CAPITAL,, DEPRESSED,, ECONOMY,, CASE,, STUDY,, MANUFACTURERS,, MANUFACTURERS.