THE EFFECT OF FINANCIAL POLICY ON PROFITABILITY AND GROWTH IN MANUFACTURING INDUSTRIES

THE EFFECT OF FINANCIAL POLICY ON PROFITABILITY AND GROWTH IN
MANUFACTURING INDUSTRIES
(A CASE STUDY OF SONA BREWERIES COMPANY PLC)
CHAPTER ONE
1.0           
INTRODUCTION
1.1     BACKGROUND OF THE STUDY
          (Newman and logon (1984) defined policy
as a standing plan, which is used over time to guide specific action. Effect of
financial and policy which is a key policy in industries has been very controversial
in profitability growth. Infant they further claim that massive features that
we are witnessing in manufacturing industries today are caused by over
dependency on effect of financial policy at the expense of other policies like
production, personal Marketing and raw materials procurement policies.
          Attempt
will be made in this paper to establish whether effect a financial policy on
profitability growth in manufacturing industries or not also the research will
highlight how policy serves a key role in spelling out, clarifying and testing
strategy (Newman and logon 1984).
1.2           
STATEMENT OF THE PROBLEM
Sona breweries plc drives from the
use of organization personnel to appraise the activities with the industries
and the review of the financial and other operation to determine if they
accurately and honestly reflect the condition of industries and evaluating the
effectiveness of other types on controls.
Before, sona breweries can perform
effectively, certain qualities must be possed. They must be independent and the
control environment must be objective and competent.
However, it is commonly observed from
previous finding, that sona breweries in the manufacturing suffered from low
ingredient, not revitalize body and unhealthily influence of the company. The
proper and duly expected recognition with the attendant co-operation is not
usually expected to sona breweries.
1.3           
OBJECTIVES OF THE STUDY
The objectives of this study are:
1.                
To
determine how financial policy contributes to the growth of manufacturing
industry.
2.                
To
find out how financial policy guides the acquisition of company’s assets.
3.                
To
investigate how financial policy ensure ploughing back of profit in
manufacturing industries.
4.                
To
verily financial policy affects divided payment of manufacturing concorns.
5.                
To
determine financial policy ensure high 
profit ability of manufacturing industries.
6.                
To
establish financial policy determines sources of capital of manufacturing
industries.
1.4           
SIGNIFICANCE OF THE STUDY
The significance of the study is to stress
the importance of sona breweries plc as a control in the growth of
manufacturing industries.
This study is also expected to show
the degree of the manufacturing industry compliance with the laid down
procedure.
It will also evaluate the quality of
the accounting and internal control system in production that adequacy and
competence which will show whether the sona breweries plc can rely in their work
1.5           
RESEARCH QUESTIONS/HYPOTHESES
       i.           
Does the financial policy contribute to the profit ability and growth of
manufacturing industries?
     ii.           
Does financial policy guide the acquisition of company set?
  iii.           
Does financial policy ensure high profitability of a company?
  iv.           
Does financial policy and ploughing back to profit in manufacturing
industries?
     v.           
Does financial policy affect dividend payment of manufacturing concern?
  vi.           
Does financial policy determine the source of capital of manufacturing
industries?
1.6           
RESEARCH METHODOLOGY
In conducting a research of the
nature one goes about doing it using some research instrument that will give a
comprehensive knowledge and unroll some important but indden information
concerning the study these help to authenticate and validate the information
supplied on the study and to serve as an update to relevant contribution in the
same field of study.
1.7           
SCOPE AND LIMITATION OF THE STUDY
Since the concern of the study is to
explore the effect of financial policy on profitability growth in sona
breweries plc, the detailed discussion of a particular set up will be attempted
and limited to the sona breweries plc as the case study. It is the aim of this
study to examine the effect of finance profitability and growth.
END OF CHAPTER REFERENCES
Adeogun, A.T. (1992) “Strategic
Policy Decisions in Business Organization,
Institute Of
Chartered Accountants of Nigerian Journal.
Okefor, A.F. (1995) Principle
of Marketing
, Nkpor Osha Baset Printing Limited.
Solomon, E. (1969) The Theory of Financial
Management
New York Columbia, University Press.
Stanton, W.J. (1981) Fundamentals of Marketing, Japan Megrad Hill Inc.
Vanitorne, J.C. (1979) Financial
Management and Polic
London,
Prentice Hall International Inc.
CHAPTER TWO
2.0           
LITERATURE REVIEW
The process of understanding the
strategic of a manufacturing company and affirmation of how effect of financial
policy is seen as a pursuit of profitability in manufacturing industries actually
enhance growth in the industries will be possible by a clear explanation of these
police the ingredients of each policy to see the one in the greatest pursuit of
profitability growth in the manufacturing industries.
2.1     CONCEPTUAL EXPLANATIONS
          Policies
are guideline for executive action. They are meant to ensure that decisions and
actions by executive are consistent with the concept of the business objective
are consistent with the concept of the business objective and plans and at the
same time in keeping with the situation in the environment. They give the
decision a certain altitude or discretion in decision making of a marketing
policy may state that the goods are to be competitively priced. This would
require the market manager to monitor prices of competing goods and adjust the
price of it products at what level to fix the price is a decision that can be
taken in relation to situation in the environment.
2.2           
DESIGNING COMPANY STRATEGY
From the definition of strategy given
above, it is seen that when arrival with the forecast of the world in which the
company will operate central management shifts to active posture thinking Newman
and London
(1982) soul designing company strategy involves knowing what are we going to do
about it”. What should be the mission of our unique enterprise and what steps
do we have to take to fulfill that goal?”
Jordan (1979) affirmed that picking the
right mission obviously is crucial. It is also difficult” to be most useful,
the master strategy should
a)                
Identify
the particular services that is the product domain which the company will
promote.
b)               
Select
the basic resource conversion technology by which these services will be
created a technology that hopefully will give the company some differential
advantage as a supplier
c)                
With
this concept of its economics and social mission determine the major thrust
necessary to move the company from present course to the desired one
d)               
Establish
the criteria and the standard that will be used to measure achievement strategy
is said to be completed after all the above dimensions are clarified.
Van Horne J.C (1978) said “A critical
judgment in designing strategy is what to accept as unchangeable. Every company
processes (or can attract) only limited resources and it has to be careful that
the goals he set are double”. In addition to sensing a future opportunity, top
management must   realistically assess
the cost of grasping the opportunity in term of people outside help money and
other resources. It must then decide whether that is something we can do.
2.3           
ESTABLISHING POLICY
Strategy concentrates on basis
dimension major thrust and overriding policies Newman and Logan (1981) soul”
the full implication of the strategy however, is clarified by thinking through
the more detailed policy that guides execution of the strategy” central
management of each company must actively participates in shaping policy
a)                
Partly
because working through the policy implication is an excellent way to check the
practicality of a basic concept and
b)               
Especially
interpreted into the work of the various department of the company.
Almost all
companies need policy guidance on product line customer’s pricing and sales
promotion production and procurement should be expressed in policy. In the
personnel areas policy on selection compensation and industrial relations help
build the desire of manpower resource and financial policy rereading allocation
and sources of capital shape money resources.
Each of these
will be examined in the subsequent paragraphs. Neck P.A (1977) said, “A
significant role of policy is to indicate the direction and degree of emphasis
the sensitive fields should receive in order to effectively project company’s
strategy fields should receive in order to effectively project company’s
strategy” attention of an organization should be directed toward change
adoption to new opportunities and pressure. Nevertheless, during the time of
any given strategy a consistent integrated action is highly important.
Ado Ogun A.J
in his article in institute of chartered accountants journal of April June (1992)
soul, policy is a major tool or top management for securing a consistent
behaviours policy permeates the numerous ???ily activities of a firm and help
establish a normal predictable pattern a behavior.
2.4           
DEFINING MAJOR  POLICY
a)               
Marketing policy-product line and customers Newman and Logan (1981)defined
policy as a standing plan which is use over to guide specific action” it serves
as a key role in spelling out clarifying and testing strategy” this dimension
is applied to marketing policy in an organization to understand its impact. As
noted in the a forestation to give it specificity and to put it in more
operational terms policy’s is a major instrument for thinking through and
sharpening such elaboration. Adelogun A.T in his article ICAN journal of April/June
1992 further soul” a systematic review of key policy that almost always
involved in filling in of an organization”
Two dimension that shape
the dormant part of every master strategy are the products (or service) to be
sold to customer who will but them are policy covering product line and
customer.
Sharpening of the product area
singled out in a master strategy involves policy regarding the variety of
products, product differentiation and frequency of design changes top
management should also set up policy regarding the type and location of final
consumers the company hopes to reach the distribution system to be used in
getting products to such customers Stanton W.J (1981), said market is a total
system of business activities designed to plan price promote and distribute
want satisfying goods and services to present and potential customer” he
further said” the various adjustment to the marketed as started above are vital
to success, they have to be nurtured overtimes and they need wise policy
guidance for consistency and dependability customer policy is seen to be
closely related to many other aspects of a company’s activities. For example
the customer’s sought will affect the kind of sales promotion needed the size
of plant the plant the type of sales and perhaps production, personnel the need
for large account receivable and other phases of operations marketing policy
can be said to entail the entire activity of identifying consumers need and
wants distributing those product effectively to consumers and monitoring the
product to ensure conformity during use with the overall the products to ensure
conformity during use with the overall satisfaction to consumer and producers.
2.4.1  MARKETING POLICY-PRICING
          Newman
–Logan (1984) said an inescapable issue in building relationship with customers
is price inflation changing fashing and technology shortage competition and
union contract have impacts on pricing-Newman-Logan (1984) further said that
price adjustments are often used to reconcile or balance diverse pressure”
getting price is a complicated task. This complexity and sensitivity make it
necessary to formulate task. This complexity and sensitivity make it necessary
to formulate some general policy to guide executives in their couly action. He
classified important issues on which policy guidance are as follow:-
1.                
How
must emphasis will be placed on relative price as a competitive weapon?
2.                
What
will be the relation of prices to costs of production and distribution
3.                
What
adjustment will be made to anticipate responses to our initiative?
4.                
Will
all customers be changes the same price? If not on what basis will differences
be established.
5.                
What
protection will be provide against price changes?
The above sequence of question does
provide a general approach to pricing. However the issue and interrelated and
only tentative answer can be give to one question until the other are
considered. Modern (1987) defined a price as a value or sum of money at which a
supplier of a product or service and a buyer agree to carry out an exchange
transaction” the value assigned to the amount of money that it is given up to
acquire a give quantity of goods or services? Policy that determines price setting
has variable which influence price but cannot be controlled by market. These
factors are referred to as external determents of the market are called the internal
determinant. It is the interplay of price that works to establish product price
(Stanton W.J 1981) from the above every company needs policy covering the
prices or be changed for its products or services often the setting of price
policy is one of the most complex problem of central management.
          Newman-Logan
(1984) suggested an ordely approach to pricing to include the following first
pricing to include the following first pricing is value as a competitive weapon
the relation of our company price to those of competitors should be established
at least tentatively to achieve selected marketing benefits. Secondly, the
relation between our costs and prices should temper this view point in practice
during inflation these cost consolation may dominate pricing policy.
          Thirdly,
a consolidated picture of the effect of price on volume cost and price is
required. Both short run and long run estimates are needed and particularly the
long run view should be matched with broad company strategy.
          Fourthly,
the underlying pricing policy which comes out of the preceding analysis must be
tailored to a variety of difficult situations important have will be a discount
structure and regional differentials which adjust prices to various types of
customers.
          Finally,
the way price can be most readily adjusted to inflation has to be fitted into
the general scheme” pricing is closely connected with many other aspects of
managing a firm. it should reflect and support the master strategy with respect
to domain sought, the differential advantages to be emphasized and the
particular thrusts into new markets or new product lines. At the operating
level, pricing policy ties closely to purchasing timing and quality of
production. The most intimate connection of pricing is with various other
element of the marketing mix” (modern 1987).
2.4.2   
  MARKETING MIX POLICY
Marketing mix is the term used to
describe the combination of four impute constitute the core of the company’s
marketing system the product, the price structure, the promotional activities
and the distribution system.  The success
and effectiveness of the four elements of the marketing mix (the 4ps) is to
produce a synergizing of the co –operation action of discrete agencies such
that the total effect is greater than the sum of the effects taken in depending”.
The element in a marketing system are
like the components of stereo system they do little very independently. But
when properly connected they full the air with beautiful music. That is
synergism (stanon 1984). Okafor (1985) said “the marketing mix is the use of
the right combination of the 4ps a marketing 
at any point in time (product, price, place, promotion) in order to
accomplish the firms objectives and to create satisfied customers”
Kotler (1988), is at the view that
marketing mixed have to be changed from time to time in response to new factors
in the marketing picture. The firm can react to environmental change in expedient
or a systematic fashion?.
Modern (1987), defined marketing, mix
as the combination of details strategies, tactics, operations, policies,
programme, techniques and activities to which resources may be allocated such
that the company’s marketing objective are achieved.
There is always an inter– depending
within and between each category, which makes up each of the four marketing mix
categories. Modern 1987, supported this view when he said the larger the sale
force the less the need for heavy advertising expenditure”
Similarly, a product which is marked
under a prestigious brand name may enjoy a much longer market than basically
and or product which lack a strong brand image.
On the interdependence between each
category the size of the sales force (promotion) depends on the distribution
channel (place) to the used also is the brand image (product) that must be
reinforced by the pricing policy (price) applied to the brand.
Therefore in moving a product from
the plant to consumers a variety or activities are under taken and each of
these involve an expense. The market mix policy of a company guild the
selection of these activity and the allocation of marketing funnels. The aim of
course is to create a final package of satisfactions that are alternative to
the specific groups of customer identified by customer’s policy” (Newman –
Longman 1981).
Service can not be store and they
move directly from their creator to the user. Never the less, an array of
attributes also surrounded each service here, too is a marketing nix and the
customer is attracted by the total package of attributes provided.
The following are the components of a
marketing mix policy.
1.          
The
sales appeals that the company will stress much as customer service and company
reputation.
2.          
The
nature and the use of advertising
3.          
The
function to the performed by sales representative selection of an optimum combination
is crucial.
Boltens (1976) saw
optimum combination of the marketing mix calls for empathy with variegated
customers group balance against realistic understanding of incremental expenses
policy regarding marketing mix should be compatible – hopefully also
synergistic with production, purchasing, personnel and financial policies
(Newman Logan 1981).
  The
following describes the interdependency: stree on quality affects production delivery
service related to purchasing leasing increased capitals requirement and so
forth.
2.4.3   
  RESEARCH AND DEVELOPMENT POLICY
Research and development needs very
must policy direction it terms of :
(a)             
target
for new products and for process that are important to the company’s success
(b)            
the
area in which the company wishes to push back from development works into apply
research and possibly basic research and
(c)             
the
areas where the areas where an offensive effort is called for and areas where a
defensive posture make more sense. These guidelines define the mission of
research and development.
Part or all research and development
mission can be met through the use of outsiders, so policy is needed on
subcontracting joint ventures licenses and encouraging suppliers or governmental
research.
The scope of research and development
is limited by total resources commitments financially a policy maximum often is
a percent of gross profit the minimum is a sum necessary to keep up with
competitors and within the range expected profit of projects set of
organization may also so set limit. By interlacing strategy and research and
development policy we harness the potential of modern science to the management
of an enterprise (Newman – Logan, 1981).
2.4.4   
PRODUCTION AND PURCHASING POLICY
Many firms have separate department
for purchasing and production but the basic problem that demand the attention
of top management were inter woven that it is simpler to consider production
policy and purchasing policy together.
The broad policy issues that need the
attention of control management have a profound effect on the destiny of
virtually firm. The major production and purchasing policy are as follow:
1.                
Developing
the extent to which vertical integration is strategic
2.                
Selecting
the general processes to be used in production.
3.                
Selecting
total capital and fairly balance
4.                
Producing
basic guide for maintenance and replacement.
5.                
Resolving
make or buy questions regarding service and supplies
6.                
selecting
vendors from whom purchases should be made.
7.                
correlating
purchasing production and sales key factors in vertical integration as stated
below
(a)             
Possible
savings resulting from co –ordination
(b)            
Elimination
of marketing rxpenses
(c)             
Lower
supply risks
(d)            
Effects
on patents
(e)             
Flexibility
(f)              
Volume
required for economic production
(g)             
Capacity
of management to supervisor additional activities
Top management will
therefore have production purchasing policy that will encourage vertical
integration. Also reduction process policy has to consider.
1)               
The
choice of technology
2)               
Extent
of division of labour
3)               
Extent
of mechanization and automation
4)               
Size
of decentralization
In production and buying give
differences exist in anticipating consumers action or waiting until order are I
hand. Many companies carry larger stocks than are require for customer service
to secure economic production runs or to obtain discount from vendor
procurement or merchant is adjusted in an effort to stabilize production
operation but more frequently it is adjusted in anticipation of price changers
to assure adequate supply.
Newman and Logan (1984) classified
the following wing as important factor that an executive should consider in
dealing with turning issue.
1)         
Customer
requirement for specifically designed merchandize or for point deliveries of
statement merchandise.
2)         
Economic
possible from large production runs
3)         
Economic
that may be secured from how level production including main tenancies of a
well trained labour force more complete utilization of facilities and possible
reduction in tax burdens.
4)         
Expenses
of carrying goods inventory including the storage changes the financial costs
the insurance expenses and determine or oblesolescence of merchandize.
5)         
Adequacy
with which price change may be produced. Demanded at a subsequent period of
time.
“Central
management should provide policy guidance in this area because action will
affect the company’s ability to render good customer service influence it
operation cost changes its circulation capital requirement and bring about
special losses due to adjustment in inventory valuation (Bunmi, W.J 1952).
Newman
and Logan (1984) said” the issue top management should be concerned with are
the company’s basis strategy for generating goods and services that its
marketing strategy require each part of the total production plan should
support the other and also should be consistent with personnel and financial policy,
which are the subject of discussion in the subsequent paragraphs.
2.4.5           PERSONNEL AND
INDUSTRIES RELATIONS
                   POLICY
       Sketched
in appendix 11 is the resource convector model which shows labour as one of the
essential resources if a company strategy is to be carried out personnel suited
to that strategy must be available on a continuous basis.
       Selecting
and developing a workforce that fits company needs raises several question.
Policy is regarding the main sources to be tapped the size of staff to be
assembled the way equal. Opportunity constants
will be dealt with and the extent on reliance promotion from with. At the same
time retain the personnel it desires fair competition is vital Newman and Logan (1981) said “policy
must deal with
a)                
An
optimum dig mend with what other companies are paying.
b)               
Provision
to keep up with inflation and
c)                
Reasonable
internal alignment which also permits recognizing individual merit.
In addition to
financial remuneration every company must decide for it washes to go with
supplemental benefit vacation holidays, recreational activities and a whole
array of protectional aquarist economics risk such as sickness old ages and
unemployment should be appraised few companies Lag belia in this areas. The
major issue is in what way a company wishes to be a leader it granting special
benefit.
Finally,
relations with union must be considered the underlying approach of a company,
which may be anywhere from a militant policy to union-management co-operation
will permits all union contracts within this general policy more specific
guideline regarding support to existing union organization will be discussed
with the union and the extent to which the company will join in group
bargaining and use outside arbitrators need to be clarified.
Newman and Logan
(1981) just as viable continuing relationship with customers and supplies are
essential to a firm’s existence so, too are its relations with its employees?
The ritual of collective bargaining is in no way diminishes the value of
relationship with employees that are suited to be miss-management.
2.4.6  FINANCIAL POLICY
          Having discussed policy issue in
three vital areas to every business enterprise marketing, production and
personnel, finance which is the fourth inherent dimension of business policy as
a pursuit of profitability growth in manufacturing sector the ingredient of
financial policy will be well analyzed to bring to focus the intending result
of the research work.
          The
process of understanding the financial policy as a pursuit of profitability
growth in my manufacturing company involves a clear explanation of financial
policy regarding the following.
1.                
allocating
capital
2.                
hurdle
rate of return
3.                
capital
budgeting
4.                
investment
made
5.                
leasing
versus purchase of fixed assets
6.                
policy
on current assets policy issues on
7.                
profit
determination
8.                
ploughing
back of profit
9.                
divided
policy
10.           
sources
of capital policy
2.5      
ALLOCSTING CAPITAL POLICY
In formulating
policy regarding uses and sources of capital attention most pressing problem
relate to
a)                
Getting
cash (liquid capital) to the most propitious uses says (Newman-Logan) J.C van
Horne (1982) said it policy that places deginite limits on the use of capital
for fixed asset must be administered with discretion.
2.6      
HURDLE RATE OF RETURN POLICY
Adeyanju T. in
his topic I can journed of April/June it is an investment guide which
stipulates the minimum rate of return that must be anticipated if capital is to
be assigned to a proposal” for example, the policy might be that any investment
in fixed assets must earn at least 15% annually on initial investment. Then a
proposal to buy a machine costing N=1,000
that was expected to result in an average net sewing =N -1,200 per year during its life would be rejected because the 2%
return falls below the acceptable minimum. The minimum permissible rate of
return should be the average cost of capital to be company.
2.7      
CAPITAL BUDGETING POLICY
A company has
many more possible investments in fixed asset than it can prudently finance.
They issue then become which project to enforce adds which to reject. Capital budgeting
is methods for addition to fixed assets are described and analyzed and predictions
are made of the amount of investment and the resulting benefit of each
proposal. We consider the additional outlays the company will make if the project
is undertaken and additional receipts or I (reduced expenditure) that will
result from the project, then proposals should be ranked with those showing the
highest rate of return to outlay of the top and those with the lowest return of
the top and those with the lowest return of the bottom.
Finally,
management can proceed down the ran key projects until
a)                
The
capital available is exhausted
b)               
The
rate of return falls below the minimum acceptable rate set by the financial
policy of the company. The policy can include that before projects below the
out off point are completely rejected intangible benefit should be appraised to
decide whether the added advantages are important enough to move a project up
into the acceptable list. Similarly intangible cost of projects above the
cutoff point should be assessed with and eye for project that might be dropped.
2.8      
INVESTMENT MIX POLICY
Some high risk
investment and some low risk investment are made by companies the proportion
among high, medium and low risk commitments very a lot. It levy and in saint
(1979) said “investment mix is used to adopt the strategy all high risk
investment make a company too unstable all minimum risk forces liquidation. A
healthy arrangement is some mixture (Newman – Logan 1984).
2.9      
LEASING VERSUS PURCHASE OF FIXED
ASSETS
Analysis of
investment proposal may reveal mare attractive opportunities then can be
absorbed by the company moral financial structure when this occurs, long term.
Leasing instead of buying the fixed assets should be considered other reason
that make leasing attractive include. The outlook may be so uncertain that
owning your own building is important leasing is a way of reducing the need for
typing up capital in fixed assets. The lease can be sales and leased back. A
few company have a policy to lease rather than to buy certain type of assets.
Long-term lease
create a containing financial burden  in
many ways compared to away fixed assets it must not be used anyhow. The general
policy of a company recording its investment in fixed assets and capital
budgeting should normally apply to properly leased for a long term as well as
property that is purchased.
2.10 
FINANCIAL POLICY ON CURRENT ASSETS.
a)                
Inventory
P.Hunt E.M. Wlliams (1981 said the size and the composition of inventory should
be determined by operating needs” the factor to be considered are minimum
inventory necessary for uninterrupted operations economic size of purchase
orders and of production runs production for inventory to stabilize employment
advance purchase to get seasonal discounts and anticipation of price changes
and storages of supply inventory policy blending all these consolidation is one
of the main issue in wise procurement and enhancement of growth of
manufacturing industries. Financial policy dealing with the allocation of
capital to competing uses frequently place an overall limit on the size of
inventories.
b)               
Investment
in account receivable. Newman and Logan (1984) said the company’s credit policy
should and the execution of its strategy the liberalness in granting credit to
customer and in making collection should be consistent with stress placed on
credit as a sale appeal. Budgetary limit may then be set for the total capital
alleviated to account receivable. Also turnover ratio can be set to check the
soundness of account and to avoid future losses from an accumulation of
uncorrected accounts.
c)                
Policy
affecting the calculation of profit management has significance discretion in
how profit is calculated. The three main area where policy guidance is needed
on this mater in manufacturing concern are:
      
i.           
Accounting
resources
    
ii.           
Capitalization
disbursement
 
iii.           
Inventory
valuation
A conservative policy is
to create large reserves even though this cuts stated earnings (B.V Carlsberg
1972) when cash has been paid out the policy might be to treat. The
disbursement as an expenses in the current year and thereby reduce profit or to
capitalize and it and increase profit on to capitalize it and increase profit.
Also inventory valuation affects profit calculation. If higher value are attached
to inventory carried an an asset the higher the current profits and vice versa.
d)      Poloughiing
back profit: Avery common practice in 
manufacturing companies is to use profit as a source of additional
capital is required to finance this expansion rather than distribute profit in
the from of dividend and then seek new capital from other sources, many
management believe that it is wiser, to use their earnings to meet this need.
e)       Dividend
policy in establishing a dividend policy the attitude of people outside the
company should be considered as we as those inside Howerd  and Brown (1970) said, A stable dividend
policy  will affect not only the income
of the present stockholders but also the marketability of stock to new holder”.
The dividend policy combined with the announced strategy enable investors to
characterize the company in term of growth rate capital gains current income
and so forth.
f)       Sources
of capital: management is to see that capital necessary to execute the company strategy
is provided at a reasonable cost and with a minimum of risk short term
creditors such as commercial backs and supplier of material can be used to
cover seasonal needs or other temporary requirement. It is risk however to
place too much reliance on short – term loans because the capital might be with
drawn when buiness condition become unsettled. If used to the maximum needs it
will be unavailable for temporary rises in capital requirement” (T Itongreen
1972) Long term loans inform of bonds are natural source of capital for company
with relative stable income. Since year a various types of securing may have to
be granted to the lender such as mortgage liens.
          The
decision to take short – term loan for long – term investment is a financial
policy that indeed is a financial policy that indeed after the growth of manufacturing
industries.
END OF CHAPTER REFERENCES
Bolten, S.O. (1996) The
Theory of Financial Management,
University
press New York Columbia.
Carsbery, B.V. and Endy,
A.K  (1972) Modern Financial Management London,
Pengum Books.
Donwa, P. (1984) Lecture Note, Unpublished.
Hunt, P.O. and Williams,
C.M. (1981) Introduction to Financial Management, Macmillan, New Your.
Kotter, P. (1983) Principle
of Marketing,
New Jersey Prentice Hall .
Levy, and Sarnt, (1983) Investment
Analysis Principle and Practices
Hold Rinchart and Winston, New Yourk.
Modern, A.R (1994) Element
of Marketing
, Great Britain
D.P Publication Limited ]
Newman, and Logan, (1981) Strategy, Policy and Central Management, Cincinal Ohio South West.
Neck, P.A (1987) Small
Enterprise,
Development Policy and Programmes,

I.L.O. Generva.
CHAPTER THREE
3.0  RESEARCH
METHODOLOGY
          In
conducting a research of the nature one goes about doing it using some research
instrument that will give a comprehensive knowledge and unroll some important
but indden information concerning the study these help to authenticate and
validate the information supplied on the study and serve as an update to the
relevant contribution in the field of study.
3.1     RESEARCH INSTRUMENT
          In
carrying out this research most of the researcher question tend to demand
answer that are qualitative in order to able to able to employ mathematical
approach to test the hypothesis of the researcher the answer have to be
quantified.
          The
aim of this research as specified in the introduction is to find out the
relationship between effect of financial policy and growth in company in items
of financial policy on asset acquisition, on plough back of profit on dividend
payment on sources of capital and financial policy on manufacturing company’s
profitability.
          These
relationship of the data collected from the research instrument (Questionnaire)
show in the appendix 1 during the analysis of data this researcher assigns 1 or
5 point 0.6 or 3 point to the next and 0.4 or 2 point to low rank 0.2 or 1
point to the lowest rank to specify the importance of the responses.
Table III below the compilation of
result of result from the questionnaire and the assignment of  the points to them.
RESPONDENT
FINANCIAL
MARKETING
PROCUREMENT
PERSONNEL
PROD
1
1
0.6
0.2
0.4
0.8
2
0.8
0.6
0.2
0.4
1
3
1
0.8
0.2
0.4
0.6
4
1
0.6
0.2
0.4
0.8
5
1
0.4
0.2
0.4
0.8
6
1
0.8
0.2
0.6
0.6
7
1
0.6
0.4
0.2
0.2
8
0.8
0.6
0.4
0.2
1
9
1
0.6
0.4
0.2
0.8
10
1
0.4
0.6
0.2
0.8
11
1
0.4
0.6
0.6
0.8
12
0.8
0.2
0.4
0.8
1
13
1
0.4
0.6
0.2
0.8
14
0.4
0.6
0.8
5.4
1
15
1
6.4
0.6
4
11.8
13.8
8.0
6.0
5.4
11.8
Source: Field Survey 2011
Source: from the research instrument the
whole respondent totaling fifteen result were tabulated and points assigned to
them.
          The
statistical summation of the point for each item of items i.e financial policy,
procurement policy personnel policy and production.
3.2     RESTATEMENT OF RESEARCH
          QUESTION/HYPOTHESES
1)      Does the financial policy
contribute to the profitability and growth of manufacturing industries?
2)      Does financial policy guide
the acquisition of company asset?
3)      Does financial policy ensure
high profitability of a company?
4)      Does financial policy and
ploughing back of profit in manufacturing industries?
5)      Does financial policy after
dividend payment of manufacturing concern?
6)      Does financial policy
determine the source of capital of manufacturing industries?
3.3     RESEARCH
HYPOTHESIS
          In other to achieve the
objective of this study the following research hypothesis will be tested.
A)      Ho: Dividend
payment which is an antidote to growth in manufacturing industries is not due
to financial policy.
          Hi: Dividend
payment which is an antidote to growth in manufacturing industries is due to
financial policy.
B)      Ho: Pouching back
of profit which is an indication of growth in manufacturing industries is not brought
the effect of financial policy of companies.
          Ho: Pouching
back of profit which is an indication of growth in manufacturing industries is
brought the effect of financial policy of companies.
C)      Ho: Financial
policy does not determine the sources of capacity required by manufacturing
industries
          Hi: Financial
policy determine the sources of capacity required by manufacturing industries
3.4     DESCRIPTION
OF POPULATION AND SAMPLING OF THE STUDY
          The
study is based on effect of financial policy as a profitability growth in manufacturing
industries a case study of Sona breweries company Plc in Songo otta local
government are of Ogun state. Hence  the population
consists mainly of the company the financial personnel and top management
statement of manufacturing industries.
SAMPLE SIZE
          Attempt was made to cover all the
functioning manufacturing industries interview was conducted with the test instrument
on randomly selected top management  staff
of the sampled companies some middle level management were also sample.
SAMPLING TECHNIQUES
          Questionnaire was designed and
distributed to the randomly selected officials of the companies concerned.
Since the hypothesis to be tested for each parameter is a one tailed test the
research will used Z statistics to test the various business policy and the
parameter for the effect of the financial policy which is the interest of the
research as a profitability growth in manufacturing industries.
3.5     SOURCES OF DATA COLLECTION
INGREDIENT OF EFFECT OF FINNAICAL POLICY ON PROFITABILITY GROWTH IIN
MANUFACTURING INDUSTRIES
 RESPONDEDNT
PROFIT
FORCE AST
ASSET
ACQUISITION
PLOUGHING
BACK OF PROFIT
DIVIDEND PAYMENT
SOURCES
CAPITA
1
1
0.8
0.2
0.4
0.6
2
1
0.6
0.4
0.6
0.2
3
0.8
0.6
0.2
0.2
0.2
4
1
0.4
0.2
0.6
0.8
5
0.8
0.6
0.4
0.2
1
6
1
0.8
0.6
0.4
0.2
7
0.8
0.6
0.4
1
0.2
8
1
0.6
0.4
0.2
0.8
9
1
0.6
0.4
0.2
0.8
10
0.8
0.4
0.6
0.2
1
11
0.8
0.4
0.6
0.2
0.2
12
1
0.4
0.6
0.2
0.8
13
0.8
1
0.4
0.2
0.6
14
1
0.4
0.6
0.2
0.8
15
1
0.8
0.6
0.2
0.4
14
9.2
6.6
6
8
Source: From the data collected
3.6     DESCRIPTIVE QUESTIONNAIRE
          Please be informed that the  information supplied will be treated in
confidence and used mainly for the purpose of theis research.
1)      Which of the following
business policies do you see as a pursit of profitability group of your company
(a)     Financial Policy                                (        ) (      )(       ) (      )
(b)     Marketing Policy                                (       )
(      )(       )
(      )
(c )     Production Policy                              (        ) (      )(       )
(      )
(d)     Procurement                                      (        )
(      )(       )
(      )
2)      Assuming your ranking gives
the highest point to any of the above listed policy, please rank again the
various ingredient of growth listed under each policy as applicable to your
company. Ascribe point ranking between 5 and 1 as above
A)      Financial Policy Variable
(1)     Profit Forecast                                  (        ) (      )(       ) (      )
(2)     Asset Acquisition                                       (        ) (      )(       ) (      )
(3)     Dividend Payment                            (        ) (      )(       ) (      )
(4)     Ploughing back of Profit                             (        ) (      )(       ) (      )
(5)     Source of Fund                                 (        ) (      )(       ) (      )
B)      Marketing Policy Variable
(1)     Pricing                                               (        ) (      )(       ) (      )
(2)     Promotion                                         (        ) (      )(       ) (      )
(3)     Place/Distribution                             (        ) (      )(       ) (      )
(4)     Packaging                                         (        ) (      )(       )
(      )
(5)     People                                               (        )
(      )(       )
(      )
(3)     Assuming your highly favoured
ingredient of your company’s growth is financial policy, what was the effect of
his your company’s profit in recent years?
(a)     Profit remain constant                      (        ) (      )(       ) (      )
(b)     Profit increase slightly                      (        ) (      )(       ) (      )
(c)      Profit increase accordingly
               (        ) (      )(       ) (      )
4)      What was the effects of
financial policy on dividend payment in recent years in your company?
(a)     Increase Dividend rate                      (        ) (      )(       ) (      )
(b)     Decrease Dividend         rate                       (        ) (      )(       ) (      )
(c)      Dividend rate remain the
same                   (        ) (      )(       ) (      )
5)      What effect your company’s
financial policy regarding cost of capital has its capital budgeting processes?
(a)     Favourable effect                              (        ) (      )(       ) (      )
(b)     Unfavourable Effect                          (        ) (      )(       ) (      )
(c)      No effect                                           (        ) (      )(       ) (      )
6)      How often does your company
plough back its profit based on its financial policy?
(a)     Annually                                 (        ) (      )(       ) (      )
(b)     Bi – Annually                          (        ) (      )(       ) (      )
(c)      Not at all                                 (        ) (      )(       ) (      )
METHOD OF DATA ANALYSIS AND DESCRIPTION OF TOOLS ANALYSIS
          The
test instrument was administered on 10 top management staff Sona breweries
company Plc, songa otta, which are the major manufacturing industries in the
area under study.
          Additional
the same questionnaire was administered on some randomly sample small scale
manufacturing concerns in the area.  A
total of is people responded positively before commencing computation of these
data this is quite encouraging when one consider the total number of 20 key
statff of these companies sample.
Table 1 below show the principal
officer sampled in the companies manufacturing one thing or the other in the
areas.
COMPANY
LOCATION
NO OF
PEOPLE SAMPLED
%
SONA
BREWERIES CO.
SONGO OTTA
5
25
Table II below gives the spread of officer that respondent
COMPANY
NO OF
RESPONDENTS
PECNETAGE OF RESPONDENTS
Sona breweries
Co.
5
33.33%
Source:- Analysis of officials that respondent.
END OF CHAPTER REFERENCES
Deepack, L.O (1993) “Management
and Industrial Relation in Erope,  America
and Japan”
Nigerian Journal of Business Administration.
Frank, Harry and Ayua,
S.C (1989) “Management in Ancient Civilization” Yoruba and Benin “Research
and Technical Journal.
Herbert B.P Lecture Note, Unpublished. University of Ado Ekiti
Link, .P.T. (1992) Strategic
Policy Decision in Business Organization, “Institute
of Chartered
Accountant of Nigeria Journal. Lagos
April/June, pp. 26 -32
Mohammed, Sikiru  (1997) “Purpose of Hurdle rate in capital Budgeting”
ICAN Journal Lagos.
Naish, P.J (1998) Management
Finance Principle and Practice
Boston,
Houugnten Miffin Co.
Ojo, Sven (1989) The
Transaction Demand for Cash and Inventory Theoretical Approach”
Quarterly
Journal of Economics. 65 (November) pp 545 – 546
CHAPTER FOUR
4.0     DATA ANALYSIS, INTERPRETATION AND DISCUSSION OF FINDINGS
         This chapter serves as an outline of
the layout of the entire chapter in this chapter in this chapter, an attempt
was made to classify responses according to see age and educational level of
the respondents analysis of data according to research question are presented.
At the end of discussion research question are answered and hypothesis are
tested.
4.1     ANALYSIS OF DATA
          The test instrument was administered
on 10 top management staff Sona breweries company Plc, area which are the area
understudy. Additionally the same questionnaire was administered on some
randomly sampled small scale manufacturing concerns in the area. A total of is
people responded positively before commencing computation of these data of
these data this is quite encouraging when one consider the total number of 20 key
staff of these companies sampled.
TABLE 1 below shows the principal officer
sample in the companies manufacturing one thing or the other in the areas.
Analysis of Tables
COMPANY
LOCATION
NO OF PEOPLE SAMPLED
%
Sona breweries Plc
Songo Otta
5
25
TABLE II: below
given the spread of officer that respondent.
Name of company
No of
respondents
Percentage of respondents
Sona
breweries Plc
5
25
Sources: Analysis of officials that
responded
4.2           
ANALYSIS OF THE TEST IN INSTRUMENT
          In
carrying out this research most of the researcher question tend to demand
answer that are qualitative in order to able to employ mathematical approach to
test the hypothesis of the researcher the answer have to the quantified. The
aaime of this research as specified in the introduction is to find out the
relationship between effects of financial policy and growth in company in term
of financial policy on set acquisition, on plough back of profit on dividend
payment on sources of capital and financial policy on manufacturing company’s
profitability.
          These
relationships however will be revealed through the analysis of the data
collected from the research instrument (questionnaire) show in the appendix 1
during the analysis of data this researcher assigns 1 or 5 point 0.6 or 3 point
to the next and 0.4 or 2 point to low rank 0.2 or 1 point to the lowest rank to
specify the importance of the responses.
          Table
iii below the compilation of result from the questionnaire and the assignment
of the point to them.
TABLE III
POLICIES THAT ARE OF PROFITABILITY GROWTH IN MANUFACTURING INDUSTRIES
RESPONDENT
FINANCIAL
MARKETING
PROCUREMENT
POSONNEL
PROD
1
1
0.6
0.2
0.4
0.8
2
0.8
0.6
0.2
0.4
1
3
1
0.8
0.2
0.4
0.6
4
1
0.6
0.2
0.4
0.8
5
1
0.4
0.2
0.4
0.8
6
1
0.8
0.2
0.6
0.6
7
1
0.6
0.4
0.2
0.8
8
0.8
0.6
0.4
0.2
1
9
1
0.6
0.4
0.2
0.8
10
1
0.4
0.6
0.2
0.8
11
1
0.4
0.6
0.2
0.8
12
0.8
0.2
0.4
0.6
1
13
1
0.4
0.6
0.8
0.2
14
0.4
0.6
0.8
0.2
1
15
1
8.0
0.6
5.4
11.8
13.8
8.0
0.6
5.4
11.8
Source: from the test instrument the
whole respondents totaling fifteen results were tabulated and point assigned to
them.
          The
statistical summation of the point for each item of interest i.e. financial
policy marketing policy, procurement policy personnel policy and production.
          Policy
were taken to represent the views of the respondents.
4.3           
HYPOTHESIS TESTING
The hypothesis is given thus;
A)      Ho:
there is no relationship between effect of financial policy and industry’s
profitability growth.
HA: there is a relationship between
effect of financial policy and industry’s profitability growth.
          This
is one tailed (one side) hypothesis about a population proportion.
The test statistic for this test is
the 2 statistic, which is by
          X-Po
              N
Z
Pn (1-Po)
          N
Where:-
Po is the prescribed proportion = 90%
X is the scores which is the
summation of points = 13.8
N is the number of respondents = 15
see table iii and is the level of significance = 0.05
Z and = 1.645
         
Substituting
Z – 8/15-0.90
0.90 (1-0.90)
          15
= 0.0210.07745 = 0.2582
b)      Ho:
there is an inverse relationship between marketing policy and industry’s
profitability growth.
          Hi:
there is a positive relationship between marketing policy and industry’s
profitability growth.
          This
is also a one – tailed (one sided) hypothesis concerning a proportion of the
population under investigation. The relevant test statistic is Z satiation.
It is given by:
          X
– Po
             n
z = pn (1 – Po)1n
where:
po is the prescribed population = 90%
x is the score which is the summation
of point = 8
n is the number of respondent = 5
see table III
$ is level of significance = 0.05
Z 
$ = 1.645
Substituting
Z – 8/15 – 0.90
          0.9(1
– 0.90)
                   15
(C ) Ho
: There is no relationship between procurement policy and industry
profitability growth
Hi
:  There is relationship between
procurement policy and industry profitability growth
The
test is a one – tailed hypothesis . the relevant statistic is z statistics.
          X
– Po
              n
Z = Pn (1 – Po)
/n
Where:
Po is the prescribed population
proportion = 9%
X is the score which is the summation
of point = 6
n 
is the number of respondent = 15
see table III
$ is the level of significance = 0.05
Z $ = 1.645
Substituting: Z – 6/15 – 0. 90
                     0 – 90( 1 – 0.90)
                                15
                   =
0.510.7745
          =
6.456
d)      Ho:
There is no relationship between personnel policy an industry profitability
growth
          the
test is also a one – sided hypothesis the relevant statistics is Z statistics
it is given thus:
x – Po
   n
Where:
Po is the prescribed population proportion = 90%
X is
the score which is the summation of point = 5.4
N is
the number of respondent = 15
See
table III
$ is
the level of significance = 0.05
Z $ =
1.645
Substituting
Z -5.4/15 – 0.90
0.90(1 – 0.90)
                    15
= 0.5=0.7745
= -6.9722
e)       Ho: There is an inverse
relationship between production policy and industry’s profitability growth
          this
is a one – tailed hypothesis is too the test static is given by:
          X
– Po
              n
Where:
Po is the prescribed population
proportion = 90%
X is the score which is the summation
of points = 11.8
N is the number of respondent = 15
See table III
$ is level of significance = 0.05
Z $ = 1.645
Substituting : Z – 11 – 8/15 –
0.90
                   0.90(1
– 0.90
                             15
          = 0.113310.7745
          =
1.463
DECISION RULE
Accept Ho: If Z > Z.
This implies that we accept
Hi: If the number value of
the calculated Z is greater than or equal to Z otherwise reject
Ho for Ha
4.4     PRELIMINARY FINDINGS
          From
the calculations the value of Z for Ho Hypothesis for financial
policy. Market policy procurement policy personnel policy and production policy
are lower than the Z $ going by the decision rule, we reject all the Ho
the HI for all the parameter tested, procurement personnel and
production policy are pursuit of profitability growth in manufacturing
industries.
          When
the various parameter are ranked effect of financial policy got the highest
value of 13.8 from the compilation of result from respondent
See table III). The researcher is
interested in this parameter effect of financial policy on profitability growth
in manufacturing industries.
          The
variable of financial policy were also included in the questionnaire where wee
responded to by the same officer of the 4 companies sampled for the key company
policies above.
          The
same vale assigned to various policy were also attached to the ingredient of
financial policy as shown in table 10.
COMPILATION OF RESULT
INGREDIENT OF EFFECT OF FINANICLA POLICY ON PROFITABILITY GROWTH INMANAUFACTURING
INDUSTIES
Respondent
Financial
Marketing
Procurement
Personnel
Prod
1
1
0.6
0.2
0.4
0.8
2
00.8
0.6
0.2
0.4
1
3
1
0.8
0.2
0.4
0.6
4
1
0.6
0.2
0.4
0.6
5
1
0.4
0.2
0.4
0.8
6
1
0.8
0.4
0.6
0.6
7
1
0.6
0.4
0.2
0.8
8
0.8
0.6
0.4
0.2
1
9
1
0.6
0.6
0.2
0.8
10
1
0.4
0.6
0.2
0.8
11
1
0.4
0.6
0.2
0.8
12
0.8
0.4
0.4
0.6
1
13
1
0.6
0.6
0.8
0.2
14
0.4
0.8
0.8
0.2
1
15
1
0.6
0.6
5.4
11.8
15
13.8
0.6
0.6
5.4
11.8
Source: From the test instrument
4.5     HYPOTHESIS
TESTING FOR INGREDIENTS OF EFFECT OF FINANCIAL POLICY
(a)     Ho:
There is no relationship between effect of financial policy and profit forecast
a manufacturing company.
Hi: There is a
relationship between effect of financial policy and profit  forecast of manufacturing company.
          This
is a one tailed (one sided) test – Z which is represented by:
          X  – Po
              n
= Pn ( 1 – Po)/n
Where:
Po is the prescribed population
proportion = 90%
X is the score which is the summation
of point = 14
N is the number of respondent = 15
See table IV
Is the level of significance = 0.05
          Z
= 1.645
 Substituting in the above formula we have
Z – 14/15 – 0.90
          0.90
(1.0.90)
                   15
          =
0.031. 07745 = 0.3873
b)      Ho
effect of financial policy which is a profitability  growth in manufacturing industries does not
guide the acquisition of their assets
HA:   effect
of financial policy which is a profitability growth in manufacturing industries
guide the acquisition of their assets.
          This
is also a one-tailed test z statistics is represented by:
          X-Po
             n    
z = Pn (1-P6)/n
where:
Po is the prescribed population = 90%
X is the scores which is the
summation of point = 9.2
N is the number of respondent = 15
See table iv
Is the level of significance = 0.05z
= 1.645
Substituting in the above formula we
have
Z – 9.2/25 – o.90
          0.90
(1-0.90)
                   15
= 0.286610.7745
=3.70
(c)      Ho: Plonghing back of profit is not a
parameter of effect of financial    
                 policy in a manufacturing
industry as profitabilitygrowth.
           Hi: Plonghing back of profit is a
parameter of effect of financial   
                 policy in a manufacturing
industry as profitabilitygrowth.
          Z
statistics is represented thus
          X
– Po
              n
where:
Po is the prescribed proportion = 90%
X is the score which is the summation
point  = 6.6
n 
is the number of respondent = 15
see Table IV
Is the level of significance = 0.005
Z = 1.645
Substituting in the above formula we
have
          Z
– 6.6 – 0.90
           0.90( 1 – 0.90)
                      15
          =
0.460/0.7745
          5.96
d)      Ho:
Dividend payment which is an antidote of growth in
    
manufacturing industries is not due to effect of financial policy
Hi: Dividend payment which
is an antidote of growth in
    
manufacturing industries is not due to effect of financial policy
This is also a one tailed test Z
statistic will be used. It is respresented
Thus
X – Po
   
n
Z = Pn (1 .Po)/n
Po is the prescribed population
proportion = 90%
X is the score which is the summation
of point = 6
N is the number of respondent = 15
See table Iv
Is the level of significance = 0.05
Z = 1.645
Substitution in the above formula we
have
Z . 6/15.0,90
          0.90(1.0.90
                   15
          =
0.50/0.7745
          =
6.456
e)       Ho:
Effect of financial policy does not determine the sources of capital
      
in manufacturing industries
Hi:
: Effect of financial policy determine the sources of capital in manufacturing
industries.
 The above is a one tailed test and Z
statistics will also be used. this represent as follow:
X – Po
   
n
Z = Pn (1 .Po)/n
Where
Po is the prescribed population
proportion = 90%
X is the score which is the summation
of point = 6
N is the number of respondent = 15
See table Iv
Is the level of significance = 0.05z
= 1.645
Substituting in the above formula we
have
          Z
– 6/15.090
           0.90 (1 – 0.90)
                   15
          =
– 0.5010.7745
= 6.456
DECISION RULE
          Accept Ho: If  2 > z. this Implies that we accept Ho if
the numerical value of the calculated z is greater than or equal to Z other
wise reject Ho for Hi
Note that Z in the reference
value 
          Z
0.05
4.6     DISCUSSION OF FINDINGS
          From the calculation, the value of Z
for profit ability data is 0.3873. this is lower than the reference value of z,
which is 1. 645  consequently we reject
the Ho hypothesis is for the Hi 
hypothesis which states there is a relationship between effect of
financial policy as profitability in manufacturing industries.
          Also
the value of Z which is -3.70. this is alos lower than Z value which is 1.645.
we also reject the Ho hypothesis for ha hypothesis which states effect of
financial policy guides the acquisition of assets in manufacturing industries
as a pursuit of it profitability growth. Another findings on the ploughing bade
of profit data have a calculated Z value of -5 .94 as against the reference
value Z. we also reject the Ho Hypothesis for the Ha hypothesis
which states plonghing back of profit is aparameter of effect of financial
policy that affect profitability growth in a manufacturing industries.
          Also
the data for dividend payment has a calculated value of Z to be -6.455.
          This
is for lower than the value of Z which is 1.645. This make us reject Ho
hypothesis is for the Ha hypothesis, which states dividend payment which is an
antidote of growth in manufacturing industry is due to effect of financial
policy.
          Finally,
the data for source of capital has a calculated Z value of 4. 73. this is also
lower+ Z value of 1.645. we also reject the Ho hypothesis for the Ha hypothesis
which states that financial policy determine the sources of capital in a
manufacturing to bring about their profit ability growth.
END OF CHAPTER REFERNCES
Abiola, R.O (1994) “Management and Industrial
Relation in Europe, America
and Japan”
Nigeria
Journal of Business Administration.
Bannol, W.J. (1995) “ The
Transaction Demand for Cash An Investory Theorecal Approach
” Quarterly
Journal of Economics 65 (Noverber) pp. 545.
Us Department of Labour, Bureau of Lbour Statistic (WWW. b/s. gov)
Accountants and Auditors.
Reiss, W.A (1996) Role of
Accountants and Auditors in Business
, Law Review Columbia University
Press.
CHAPTER FIVE
5.0                       
SUMMARY, CONCLUSION AND
RECOMMENDATION
5.1                       
SUMMARY
The preliminary findings attested to
the fact that control management should have good policies on the key area of
business like production, marketing, personnel, procurement or purchasing,
research and development and finance.
The ranking given show the importance
of these parameters to growth in manufacturing industries. They are
interrelated and a filure in one definitely will bring the failure of the business
it is therefore a strategic decision in any company to set out policies on
these key areas.
The highest ranking goes to effect of
financial policy as profitability growth in manufacturing industries. This
means the highest number of people sampled favour this as the most important
policy to enhance profitability growth in manufacturing industries.
This does not means other key factor
are not necessary but they come after the effect of financial policy. The
ingredients of this policy are profit – forecast, asset acquisitions, ploughing
back of profit dividend payment and sources of capital. The researcher tested
various hypotheses for these ingredients and the result showed they have
positive relationship to effect of financial policy.
          A
good policy decision on each of these ingredients will positively affect the
profitability growth of the industry concerned.
5.2     CONCLUSION
          In
the light of the about, the research has arrived at the following conclusion in
respect of effect of financial policy being as a profitability growth in
manufacturing industries.
1.       That
profit forecast of a company is derived from effect of financial policy.
2.       That
a growing company will acquire more assets to support its expansion resulting
from his effect of financial policy.
3.       That
when company has effect of financial policy, it will have enough profit to
plough back to the business to enhance is further growth.
4.       That
dividend payment arising from effect of financial policy is an evidence of
profitability growth of a company.
5.       That
good effect of financial policy will bring about cheap and reliable source of
capital for the business. This enhance its profitability growth.
5.3     RECOMMENDATIONS
1.       Since
it is confirmed from the result of this a study, that effect of financial
policy as a profitability growth of manufacturing concerns should  as a matter of involve it top management in
making this regularly.
2.       Manufacturing
companies should train their middle and top management on strategic decision
making to enable them be conversantly with policy decision that will affect the
profitability growth of the business most especially effect of financial
policy.
3.       Employment
of professions who are versed in business administration and finance to help in
formulating effect of financial policies that will enhance the profitability
growth in manufacturing industries.
END CHAPTER REFERNCES
Abiola,
R.O Lecture Note Unpublished. University of Ado
–Ekiti State .
Ajayi, C.A. (1986) “Financial Control in the Public Sector”
Annual Conference of NATA
Herbert, G.H.and Gullet, C.R. (1983) Management
MC
Graw – Hill New York.
Millichamp, I.E. (1990) Public Sector
Accounting and Financial Control. Financial Training, Lagos.
Okafor, A.F (1995) Principle
of Marketing
Nkpor Osha, Baset Printing Limited.
BIBLIOGRAPHY
Abiola, R .O (1994) “Management
and Industrial Relation in Europe, America
and Japan”

Nigeria Journal of Business Administration Vol. 3 Nos, pp151
Abiola, R.O (1994) “Management in Ancient Civilization,
Yoruba and Benin.
“Research
and Technical
Journal Vol. No2, pp1 -12.
Abiola,
R.O Lecture
Note Unpublished
. University
of Ado – Ekiti
Adeogun, A.T. (1992) Strategic
Policy Decisions in Business Organization,
“institute of chartered accountants of Nigerian journal.
Logos April/June, pp – 26 -22
Adeyanju, J (1997) “Purpose of Hurdle rate in Capita
Budgeting”
ICAN Journal Lagos April/ June, pp 65 – 66
Bannol, W.J. (1995) “The
Transaction Demand for Cash an Inventory Theorecal Approach”
Quarterly
Journal of Economics 65 (November) pp. 545.
Bolten, S.O. (1996) The
Theory of Financial Management,
University
press New York Columbia.
Carsbery, B.V. and Endy,
A.K  (1972) Modern Financial Management London, Pengum Books.
Donwa, P. (1984) Lecture Note, Unpublished.
Hunt, P.O. and Williams,
C.M. (1981) Introduction to Financial Management, Macmillan, New Your.
Kotter, P. (1983) Principle of Marketing, New Jersey
Prentice Hall .
Levy, and Sarnt, (1983) Investment
Analysis Principle and Practices
Hold Rinchart and Winston, New York.
Modern, A.R (1994) Element
of Marketing
, Great Britain
D.P Publication Limited
Newman, and Logan, (1981) Strategy, Policy and Central Management, Cincinal Ohio South West.
Neck, P.A (1987) Small
Enterprise,
Development Policy and Programmes
,
I.L.O. Generva.
Okefor, A.F. (1995) Principle
of Marketing,
NKPOR osha baset printing limited.
Solomon, E. (1969) The Theory of Financial
Management
New York Columbia, University Press.
Stanton, W.J. (1981) Fundamentals of Marketing,
Japan
megrad hill Inc.
Vanitorne, J.C. (1979) Financial
Management and Polic
London,
Prentice Hall International Inc.
APPENDIX: QUESTIONNAIRE
          Please
be informed that the information supplied will be treated in confidence and
used mainly for the purpose of this research. Mark your answer as appropriately
directed by the researcher.
1)      Which of the following
business policies do you see as a pursuit of profitability group of your
company
(a)     Financial Policy                                (        ) (      )(       ) (      )
(b)     Marketing Policy                                (       )
(      )(       )
(      )
(c )     Production Policy                             (        ) (      )(       ) (      )
(d)     Procurement                                      (        ) (      )(       ) (      )
2)      Assuming your ranking gives
the highest point to any of the above listed policy, please rank again the
various ingredient of growth listed under each policy as applicable to your
company. Ascribe point ranking between 5 and 1 as above
A)      Financial Policy Variable
(1)     Profit Forecast                                  (        ) (      )(       ) (      )
(2)     Asset Acquisition                                       (        ) (      )(       ) (      )
(3)     Dividend Payment                            (        ) (      )(       ) (      )
(4)     Ploughing back of Profit                             (        ) (      )(       ) (      )
(5)     Source of Fund                                 (        ) (      )(       ) (      )
B)      Marketing Policy Variable
(1)     Pricing                                               (        ) (      )(       ) (      )
(2)     Promotion                                         (        ) (      )(       ) (      )
(3)     Place/Distribution                             (        ) (      )(       ) (      )
(4)     Packaging                                          (        ) (      )(       ) (      )
(5)     People                                               (        ) (      )(       ) (      )
(3)     Assuming your highly
favoured ingredient of your company’s growth is financial policy, what was the
effect of his your company’s profit in recent years?
(a)     Profit remain constant                      (        ) (      )(       ) (      )
(b)     Profit increase slightly                      (        ) (      )(       ) (      )
(c)      Profit increase accordingly
               (        ) (      )(       ) (      )
4)      What was the effects of
financial policy on dividend payment in recent years in your company?
(a)     Increase Dividend rate                      (        ) (      )(       ) (      )
(b)     Decrease Dividend         rate                       (        ) (      )(       ) (      )
(c)      Dividend rate remain the
same                   (        ) (      )(       ) (      )
5)      What effect your company’s
financial policy regarding cost of capital has its capital budgeting processes?
(a)     Favourable effect                              (        ) (      )(       ) (      )
(b)     Unfavourable Effect                          (        ) (      )(       ) (      )
(c)      No effect                                           (        ) (      )(       ) (      )
6)      How often does your company
plough back its profit based on its financial policy?
(a)     Annually                                           (        )
(      )(       )
(      )
(b)     Bi – Annually                                    (        ) (      )(       )
(      )
(c)      Not at all                                           (        )
(      )(       )
(      )
APPENDIX DIAGRAMS
ENTERPRISE – RESOURCE CONVERTER                 
Customers

 


                                                                                                Capital
ENTERPRISES
RESOURCE

 


CONVERSION

 


Supplier                                                                             
Community     Labours
                             Resources
Inputs
                             Need
satisfaction output
Source; Newman (1984)- Longal
strategy, Policy Central Management  
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