RESEARCH BACK UP

1.0 INTRODUCTION There are three main forms of business organizations- the Sole proprietorship, Partnership, and Limited Liability Company. Each of these has its own distinguishing features/characteristics, as well as merits and demerits. 2.0 OBJECTIVES After studying this Unit, you should be able to:  List the three basic forms of business organizations.   Identify their features  3.0 MAIN CONTENT 3.1 Sole Proprietorship A Sole proprietorship or one – man business, as the name implies, is a business concern owned by one person who often is also engaged actively in the running of the business. The sole owner subscribes to all of the equity capital of the business which in most cases are raised from personal savings or soft loans obtained from relations and friends. All incomes also accrue to the owner. Other characteristics/features of one – man business include the following:  A sole proprietorship has no distinct legal entity.   The owner has fr...

1.0 INTRODUCTION In this unit of the course, we will discuss the scope of finance to be reached, emphasizing on the relevant areas of concern because finance is a wide area of studies with much interrelationship in business. It is part of management. 2.0 OBJECTIVES At the end of this unit, you should be able to: discuss the scope of finance   explain the financial and real asset market   identify types of financing  Discuss finance as part of management.  3.0 MAIN CONTENT 3.1 Scope of Finance In Unit 1 of this Module, money (finance) was presented as a common denominator in doing business (trading). The other two elements that will combine to strike a balance in order to enhance the optimum utilization of resources of the business are: production and marketing. The business cycle in Unit 1 explains financial (fund) activities and how they are related to the enterprise’s other activities. Manufacturing / operation activities provide goods/services to cus...

1.0 INTRODUCTION In this unit, you will be introduced to finance functions in the various stages of activities of a business organization. You may recapitulate that in the business cycle figure drawn in Unit 1, you were shown the functional movement of funds/financial activities through investment to cash, production of goods and services, given their marketing thereof. 2.0 OBJECTIVES At the end of this unit, you should be able to: identify the functions of finance   apply these functions of finance   Establish effective execution of finance functions.  3.0 MAIN CONTENT Finance functions have been acknowledged as major in most organisations. They are identified as raising funds, investing them in assets and distributing returns earned from assets to shareholder/owners. This exercise is known as financing decision, investment decision and dividend decision. These finance phenomena which will be treated extensively later; were expressed in figure 1, Unit 1, Module...

1.0INTRODUCTION The subject of finance is not only discussed, but is part of all disciplines and all facets of socio-economic activities of humans. Finance has evolved to assume a very important position in the decisional process of households, businesses, governments and other non-business organisations. No financial decision can be efficiently and effectively implemented without financial management. In this introductory Unit, we shall attempt to answer the following questions:  How is finance related to other disciplines?  How do we explain financial management structure  2.0OBJECTIVES After studying this unit, you should be able to:  enumerate the roles of finance in other disciplines;  explain the concept of financial management structure  4.0 MAIN CONTENT 3.1 Definition of Finance The field of finance is broad and dynamic. It directly affects the lives of every person and every organisation. There are many areas for study and large number of car...

1.0 INTRODUCTION Planning is a process of achieving specified objectives. Planning involves the selection of objectives and the means of achieving them. It presupposes that alternative procedures for achieving the same objective exist. Planning involves taking decisions in advance on the following:  What should be done?  How could it be done?   When should it be done?  By whom should it be done?  These are the basic questions a planner should answer and they are basic factors that should be taken into consideration in the planning process. There exists a gap between objective and achievement, and planning helps the planner to fill the gap. In this unit, however, we shall be concerned with financial planning. We shall define financial planning; consider the process of financial forecasting. 2.0 OBJECTIVES After a careful study of this unit, you should be able to: define financial planning;   enumerate and discuss the steps in the forecasting pr...

1.0 INTRODUCTION The subject of finance is not only discussed, but is part of all disciplines and all facets of socio-economic activities of humans. Finance has evolved to assume a very important position in the decisional process of households, businesses, governments and other non-business organisations. No financial decision can be efficiently and effectively implemented without financial structure. In this introductory Unit, we shall attempt to answer the following questions:  What is finance?   How is finance related to other disciplines?  Explain financial structure in an organization  2.0 OBJECTIVES After studying this unit, you should be able to:  define finance clearly;   explain the concept of financial structure in an organization management;  3.0 MAIN CONTENT 3.1 Definition of Finance The field of finance is broad and dynamic. It directly affects the lives of every person and every organisation. There are many areas for stud...

1.0 INTRODUCTION Financial sources or funds available to a business organization could be classified into short-term, medium term, and long-term, or into short-term and long-term. Sources of funds available to business organizations could be classified into two main categories:  Internal   External  These categories have different types of sources, that is a firm can generate funds internally or externally to finance its activities. External sources could also be short-term or long-term. This unit will focus on how firms acquire funds in order to acquire assets. 2.0 OBJECTIVES At the end of this unit, you should be able to:  List and discuss the external sources of finance;  Classify the sources of finance for a firm;  3.0 MAIN CONTENT 3.1 SOURCES OF FUNDS 3.1.1 Short-term sources Short-term sources of funds represent current liabilities (funds owed). They represent short-term obligations. Since they are supposed to be settled by cash, they represe...

1.0 INTRODUCTION This unit, you will be introduced to working capital management. In business, when sales arise not in cash, the immediate outlet is receivables – accounts receivables or trade debtors and current asset cash and receivables (debtors) which assist in the operation of a business enterprise. The management of these receivables is very vital to the business as a going concern. Organisations usually have claims to future inflows of cash. These claims are known as accounts receivables and note receivables expressed in financial statements.   Inventories are the balance of goods on hand (part of current assets). In a producing enterprise, they comprise raw materials, work-in-progress and finished products. These inventories need to be managed properly to avoid unnecessary cost. Management of inventory will be explained as part of working capital management. 2.0 OBJECTIVES At the end of this unit, you should be able to:  Explain working capital management  St...

1.0 INTRODUCTION Finance plays a very important role in any business activities, whether public or private sector. Its management is the pillar upon which all economic activities stand. No business can survive or be sustained without finance. In this first unit of this course, we will you will be introduce the nature of finance in a buy & sell enterprise, define finance; explain the role and field of finance. 2.0 OBJECTIVES At the end of this unit, you should be able to: discuss the nature of finance  define finance  Identify the role finance.  3.0 MAIN CONTENT 3.1 Nature of Finance Finance may be defined as the provision of money at the time it is required. Every person responsible for finance, whether it is for a corporate organization or private household, money is confronted with prospects of inflow receipts on the one hand, and outflow payments on the other. The inflows are expected to be arranged in such a way that fund (money) is always available to make nec...

1.0 INTRODUCTION To function properly in business, you should consider the risk taken; especially in the sourcing and usage of fund. In this unit, you would be led to the investor’s dilemma, especially in the developing economy like Nigeria, where risk taking is much dreaded and one has to “look before one leaps” in financial venture. 2.0 OBJECTIVES At the end of this unit, you should be able to: discuss the risks of finance   state category of risks in finance  Identify how to avoid finance risks.  3.0 MAIN CONTENT 3.1 Investor’s Dilemma If the investor believes that there is some chance, however small, that in the long run he may earn a small return (profit), he would extra effort than he could obtain on a riskless investment. He will not invest unless he can expect a higher return if the investment does succeed. Though in the course of event, he will not necessarily expect this higher return to become available at once. This allowance for risk, in greater or les...

1.0 INTRODUCTION In this unit, you would identify the key role of finance as it is embedded in the functions of the Finance Manager. The central role of the finance manager will be explained to emphasis its utility as a pivot of management functions. 2.0 OBJECTIVES At the end of this unit, you should be able to:  identify the key roles of finance in an enterprise  state the duties of a Finance Manager  Explain the interdependent relationship of finance with other sections of a business organisation.  3.0 MAIN CONTENT 3.1 Central Role of Finance Manager As could be deduced from Unit 1 of this Module, the finance manager’s duties include:  Budgeting  Raising funds  Selecting and evaluating projects  Planning the marketing and pricing strategies.  The finance manager is always supposed to be a specialist/professional, with knowledge of many areas of finance. The breadth of finance unction is vast that in many business organisations, it include...

1.0 INTRODUCTION In this unit, you will learn how to discuss profit planning, explain pricing and how management applies them to the benefit of entrepreneurial growth and development. 1.0 OBJECTIVES At the end of this unit, you should be able to: Discuss profit planning  Explain pricing  2.0 MAIN CONTENT 3.1 Profit Planning Budget is the profit plan base. A well managed enterprise usually produces a budget cycle planning the performance of the organisation as a whole including the profit projections. Profit planning is related to considering four main factors – fixed costs, variable costs, selling price and sales volume. Any change in one or several of other factors, affect the planned profit. The management has to develop strategies in making sure these factors are properly mixed regarding the term – short, medium or long for the enterprise and the competitions thereof. Self Assessment Exercise 2 Budget is the profit plan base. Explain 3.2 Pricing In our study of pricing,...

There are three main components of financial statement used for financial analysis. They are as follows: Balance Sheet  Income Statement  Cash flow Statement  (a) Balance Sheet Balance sheet shows the present statement of a business. The business as a single entity shows the financial condition of an accounting entity as at a particular point in time. Balance sheet consists of assets (probable future economic benefits obtained and controlled by an entity as a result of past transactions or events). They may be physical assets such as land, buildings, stocks, or inventory. Assets may also be intangible such as trademarks, goodwill, copyright, or patent. For instance, assets are normally categorized into current and long- term. This will be discussed in detail in subsequent units. (b) Income Statement Income statement is otherwise known as profit and loss account. Other scholars refer to it as statement of income, statement of earnings and statement of operations....

1.0 INTRODUCTION In this unit, you will be introduced to financial statement analysis and its main components. You will also be led through the discussion on how financial statement analysis aids management in decision-making process. 2.0 OBJECTIVES At the end of this unit, you should be able to:  Explain financial statement analysis;  Identify the main components of financial statement and the analysis;  Discuss financial analysis as a tool for management decisions.  3.0 MAIN CONTENT 3.1 Financial Statement Analysis: An Overview Financial statement is a statement that records financial activities of a particular business organisation (business enterprise). It is the book keeping and recording of source document from the early stage of business enterprise through journalizing to the ledger accounts, trial balance and then the final accounts. In the early times, keeping financial statement analysis was not a priority because business transactions were undertaken by means ...

1.0 INTRODUCTION In this unit, you will be able to know who a Finance Manager is and identify his role in the financial management ‘mix’ of a firm. Among other things, he coordinates the flow in the working cycle and makes the correct ‘dose’ of investment to be at the proper place in order to avoid “too much or too little of fund”. 2.0 OBJECTIVES At the end of this unit, you should be able to:  explain who a Financial Manager is   identify the role of Financial Manager  plan profit of a Business firm  Describe Capital Market.  3.0 MAIN CONTENT 3.1 Financial Manager This is the person responsible for performing finance functions. In a modern firm, finance manager’s position is significant. He is recognised as a member of the top management team. He maintains records, prepares progressive financial report through auditing, financial/managerial accounting and assists in raising funds when required. As an adviser, the finance manager now shapes the fortunes...