Impact Of Working Capital Management On Deposit Money Banks Performance In Nigeria (A Study Of United Bank For Africa) U.B.A Plc

ABSTRACT

This work is aimed at finding the impact of working capital management on deposit money banks performance in Nigeria. The high rate of failure, and loss depositor's money attributable to illiquidity and improper management of working capital over the years has been a subject of concern to the researcher, it is on this background that an investigation into the impact of working capital management on deposit money banks performance is conducted, for the purpose of achieving the objective of the study, the following hypotheses were formed: HO1: gross working capital has no effect on bank performance, HO2: there is no significant effect of cash management on bank liquidity, HO3:marketable securities management has no effect on profitability of banks, HO4:there is no significant effect of account receivable management and bank's total assets. Using longitudinal designs, data from JIB A' S financial statement' s and annual balance sheet on working capital management for 15 years were statistically analyzed, multiple and simple regression models were used. The result reveals HO1is significant at 10%, HO2at 1%, HO3at 1% and HO4at 1%. Therefore, it is concluded that gross working capital management has effect on bank performance, cash management has strong effect on bank liquidity, marketable security management has effect on profitability of banks and account receivable management has great effect on total assets of bank. Based on this, the following recommendations were made: special attention should be placed on management of working capital, invest adequately in cash and avoid idle investment (cash) that earns nothing to the bank, banks should adopt good credit polices and credit analysis. Finally, CBN regular audit on bank's management of working capital will also help improve their performance.

TABLE OF CONTENTS

Title i

B.S.c research project evaluation form ii- I

Declaration iv

Certification v

Dedication vii

Acknowledgment viii

List Of Tables xi

Abstract xii

CHAPTER ONE

INTRODUCTION

1.1 Background To The Study 1

1.2 Statement Of Problem 3

1.3 Objectives Of The Study 4

1.4 Research Hypothesis 5

1.5 Significance Of The Study 5

1.6 Scope Of The Study 6

1.7 Limitation Of The Study 6

CHAPTER TWO

LITERATURE REVIEW

INTRODUCTION 7

2.1 The Primary Objective Of Working Capital Management

2.2 The Concept Of Working Capital 9

2.3 The Components Of Working Capital 11

2.4 The Management Of The Component Of The Working Capital 13

2.5 Types Of Working Capital 27

2.6 Determinants Of Working Capital 28

2.7 Sources Of Working Capital 29

2.8 Historical Preview Of UBA Plc 31

2.9 Working Capital Management In Deposit Money Banks In Nigeria 31

2.11 Working Capital Management In The United Bank Of Africa 36

CHAPTER THREE

RESEARCH DESIGN AND METEOROLOGY

INTRODUCTION 41

3.1 Research Design 41

3.2 Populations On The Study 41

3.3 Sample And Sampling Techniques 41

3.4 Data Collection Procedure 41

3.5 Validity And Reliability Of Instruments 42

3.6 Data Analysis Techniques 42

3.6.1 Model Specification 42

CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS

INTRODUCTION 45

4.1 Data Presentation 45

4.2 Results And Discussion 45

4.3 Hypotheses Testing 47

CHAPTER FIVE

SUMMARY, RECOMMENDATION AND CONCLUSION

5.1 Summary 50

5.2 Recommendation 51

5.3 Conclusion 52

BIBLIOGRAPHY

APPENDICES