AN APPRAISAL OF WORKING CAPITAL MANAGEMENT IN BREWERY INDUSTRIES

CHAPTER ONE
1.0. INTRODUCTION
1.1. BACKGROUND OF THE STUDY
After the commencement of the business it will soon occur to the entrepreneur that business operation are not an easy as he assumed.

As he aim the business he will realize the most of the profit margin (if at all he makes them), which he assumed will be available for further financing of the business may not come forth when some will be tied to account receivable or stock of hirentorius.
It will further down on the entrepreneur that if he meets most of his customers demand expand the scope of the business and increase the profitability of the organization, he will always need the service at credit facilities by surplus.
Problem however will arise for unprepared managers with naïve attitude in respect to working capital will suddenly discover that they are handling and not be able to meet the target profit, hence he might not do anything to keep the business going they will realize that the blood stream of the business i.e. working capital has stopped flowing or is not properly flowing and that can lead to the death of the business.
The focus of this research work is to stress the importance of working capital management in any brewing industries due to negligence of the fact, many organization that has sample opportunity to make it big in the economic retarded while others are experiencing severe cut down in profitability.
From the fore mentioned reason, am now making it as a matter of responsibility to look at this subject matter so as to cut down, if not completely eliminated, the problem of working capital management and it’s effects on the profit of a brewing industries and a case study of Guinness Nigeria plc Lagos.

1.2. STATEMENT OF RESEARCH PROBLEM
The statement of the research problem to be discussed in this research work is listed below:
1. What are the level of working capital require to meet the liquidity and profitability of the brewing industries?
2. How can management placement, which generate into management in efficiency in planning and controlling of working capital, could be reduced?
3. What is the working capital cycle in brewing industries?
4. What are the working capital determinations and their effect on the profit of brewing industries?
1.3. OBJECTIVE OF THE STUDY
The research is embarked upon to achieve the following:
1. To show that health condition of a company is revealed first, in the working capital
2. To examine the importance of level of items, ratio analysis of working capital management
3. To establish the relationship between the efficient management of working capital and profit of brewing industries
4. Excess and inadequate of working capital has negative effect on the profitability level.
5. To make a recommendation.
1.4. SIGNIFICANCE OF THE STUDY
The information to communicate can be used by the management of Guinness plc and any other entrepreneur and brewing industries.
1. In formulating policies concerning working capital
2. In planning and controlling the activities of the enterprises.