This research work critically examines the impact of cash flow statement in an organization. The broad objective of this study is to examine the relationship between operating cash flows and corporate performance and also to examine the correlation between investing cash flows and corporate performance. The primary source of data collection was used in the study and data for the study were collected through the use of questionnaire. 60 questions were administered and fifty eight (58) were returned. The responses were then analyzed using the simple percentage method and the chi-square denote by a Greek symbol (X2) to test the hypothesis. The findings showed that there is a significant relationship between cash flow statement and corporate investment and that cash-flow statement impact on organization performance. However, it was recommended that in improving their performance and cash flow, corporation should seek to improve their investment policy since increase investment lead to more cash flows for the organization




Background to the Study

Cash flow of a company is a crucial factor that enhances its operations. According to Efobi (2008), Due to the relevance of cash flows in the company’s operations and performance, corporate organizations need to develop a suitable cash flow mix and apply it in order to maximize shareholders values. Uremadu (2004) sees cash flows of an organization as those pool of funds that the company commits to its fixed assets, inventories, account receivables and marketable securities” that lead to corporate profit. The ability of the company to effectively choose adequate source of funds to finance its operations will differentiate strong cash flow governance and poorly managed cash flows (Efobi, 2008). For the cash flows to be well structured and effectively utilized, a business firm must be able to devise various ways for selecting the best components of its cash flows which would be used in the company’s operation to raise its productivity or achieve performance. This process should be based on the criteria well drawn up by the finance manager after making a careful financial planning and control for the company (Uremadu, 2004).

Cash flow is an index of the money that is actually received by or paid out by a firm for certain time period (Albrecht, 2003). This index is not inclusive of non-cash accounting charges such as depreciation. Cash represents the firm’s vascular system, if it dwindles, the business will not survive. The fact that a firm is profitable does not mean that it is also solvent. The profit is not cash. The solvency, flexibility and the financial performance of the firm are set on the firm’s ability to generate positive cash flows from the operating, investing and financing activities (Turcas, 2011). Cash flows represent all inputs and outputs liquidities and cash equivalents. Liquidities represent cash on hand and demand deposits. Cash equivalents are short-term investments with a liquidity degree that can be easily converted into cash with an insignificant risk of value change.

According to Adelegan (2003), cash flows are more direct measure of liquidity and a contributing factor in corporate performance. Cash flow information assists its financial statement users in obtaining the relevant information concerning the use of resources of virtually the entire financial resources over a given time period (Ross, 2007). Financial statements translate the financial activity of the enterprise into a more or less objective set of numbers, which provide valuable information about the firm’s performance and about its possible problems and its potential in the future (Turcas, 2011). The importance of cash flows cannot be overemphasized mainly because the users of accounting information are particularly interested in the cash of the company that is published) in its financial statements (Narkabtee, 2000). According to Bodie (2004), internally, managers need to know the current financial position of the firm (performance and problem), continuing with problems and control functions. According to Fabozzi and Markomits (2006), suppliers are interested in the firm’s liquidity because their rights are generally on a short term and in this case the company’s ability to pay is best reflected by the liquidity indicators. According to Bragg (2002), investors in bounds, who ordinarily lend the firm on medium or long term for remuneration, are rather interested in the company’s ability to generate cash flow for medium and long-term coverage of debt service.




1.2   Statement of Problem

According to Pitman (2010), cash flow does not always coincides with cash outflows. Thus, in some periods, cash will flow in than out and at other times, cashflows out than in. if receipts and payments period could be matched perfectly and forecast with certainty than a firm need no cash balance.

Pitman (2010) went further I say that shortage of cash curtail the operations of the firm which usually manifest inability of the organization to pay bills when due and the dissipation of assets. Persistence of cash shortage can lead to financial insolvency which may subsequently lead to litigation of the organization. If there is too much cash, it is not invested, then the firm is paying directly or indirectly for money that is not using. The organization losses to earnings, interests and run the risks of keeping the liquid fund (cash). The problem that faces management is how to maintain and control optimum cash balances despite the difficulties in cashflows.

Pitman (2010) also stated that the importance of cash as an asset of a firm cannot be over emphasized with out cash, that is, where is short is supply, the normal flows of operation of the corporation flows are directly productive, it is sterile. It neither produces goods for sale or induces customers to buy as if the case of other assets, fixed assets, inventories and account receivable.

In current practice, including the ambiguity of terms such as funds, lack of comparability arising from diversity in the focus of the statement (cash, cash and short term investment, quick assets, or working capital) and resulting differences in definition of funds flows from operating activities



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This study on “Impact of the Nigerian Capital market in Financing Small and Medium Scale Enterprises (SMEs) in Nigeria” is intended to identify and consequently analyze the financial incentives available to SMEs in the Nigerian capital market. It provides solution to the financial gap existing between large enterprises and small and medium scale enterprises in terms of availability of financial resources referred to as the missing middle. The methodology adopted in conducting the research was a survey design. The independent variable of the study was the Nigerian capital market while the dependent variable was small and medium scale enterprises. A disproportionate stratified random sampling technique was adopted to select a representative sample SMEs. Questionnaire was used as instrument for data collection. The questionnaire was developed on a four-likert scale ranging from one to four (i.e. from strongly disagree to strongly agree) while, the hypothesis developed was tested using Chi-square (X2). Tables and percentage was adopted to analyze the hypotheses of the study. Base on the findings, it was concluded that SMEs always see the Nigerian Capital Market as a good source of capital for them since equity financing is always cheaper for long-term financing. Yet, many SMEs still entertain some fears in approaching the Nigeria capital market such as: the fear of losing their total control over their companies, and the fear of sharing their profit with other investors as well as hostile takeover of their companies by other investors. The study recommended that the cost of borrowing should be reviewed in order to encourage more enterprises to come into the market so as to expand and deepen the market. The Nigerian stock market needed to be built up with mass participation of SMEs to attain a meaningful sustainable growth and development. There are also needs to formulate investment friendly regulations; keep low inflationary rate; provide favorable government policies and provide stable macroeconomic framework for the sustainability of informal and SMEs sector in the developing countries.





1.1     Background to the Study


Production of goods and services in the most efficient manner has continued to be the only viable and reliable option for growth, development, and survival of world economies. Despite the importance of production, it is impossible for a sustained high productive level to be attained without a well-developed industrial sector. Industries normally operate either on a large or small scale both in the public and private sector. In Nigeria, the private sector enterprises cover a wide range of different types of industries as distinguished by various criteria such as size, sector, ownership structure, employment and technology.

The small-scale industries cover the entire range of economic activity sectors and are very heterogeneous groups (Hallberg, 2011) They include a wide variety of firms – village handicraft, restaurants, bakeries, poultry farming, hair dressing, barbers shops just to mention a few. The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), (2011) classify industries into small and medium scale enterprises (SMEs).

The significance of small and medium scale enterprises to growth, productivity and competitiveness of the economies of developing countries is universally recognized. Small and medium scale enterprises are generally acknowledged in (Kasekende& Opondo, 2003) as the bedrock of the industrial development of world economies. They are more innovative than larger firms are. Small and medium scale enterprises usually provide training grounds for entrepreneurs even as they generally rely more on the use of local materials. SMEs development can play a key role in entrepreneurs’ development through their contributions to economic advancement and social empowerment.

In Oteh (2011), the Global Entrepreneurship Monitor 2009, a research program aimed at assessing the national level of entrepreneurial activity in selected countries, conducted an entrepreneurship and economic growth study on 37 countries. According to the study, the economic growth of a country is directly correlated with its level of entrepreneurial activity. The study reveals that, there is a high correlation between economic growth and entrepreneurial activity in industrialized countries, hence to achieve Nigeria Vision 20:20 then greater attentions should be paid on very vibrant and robust enterprises. Entrepreneurs create new enterprises, new commercial activities and new sectors, which have a positive multiplier effect on the economy. Entrepreneurial activities are very crucial to fostering economic and social progress in the country. The development of SMEs in Nigeria is therefore an essential element in the growth strategy. Notwithstanding the widely acknowledged role of SMEs in fostering economic growth and development, SMEs have continued to face a variety of constraints (Adelaja, 2004) and majorly that of finance.

This is quite common in many African countries, including Nigeria, where access to finance was the second most important constraint to doing business after inadequate supply of infrastructure. This is because; the conditions for financing SMEs are more restrictive to those of large enterprises. This has also confirmed the fact that, inadequate finance is a serious challenge that must be tackled before there could be any meaningful progress in the SMEs sub-sector.

Small and medium scale enterprises in Nigeria suffer from lack of access to appropriate (term and cost) funds from both the money and capital markets. This is due in part to the perception of higher risk resulting in high mortality rate of the business, information asymmetry, poorly prepared project proposals, inadequate collateral, absence of, or unverified history of past credit(s) obtained and lack of adequate accounting records of the company’s transaction. In some cases, there are virtual absence of capital market facilities and instruments that SMEs can access. (Bates, 2010) The capital market in Nigeria is still evolving while other conventional sources have no confidence in the credit worthiness of SMEs. Non-bank financial intermediaries such as micro credit institutions could play a greater role in lending to SMEs. Nevertheless, some of these institutions may not consider SMEs credit worthy. .

Small and medium scale enterprises therefore rely on their retained earnings, informal savings and loan associations, which are unpredictable and insecure with little scope for risk sharing as their major source of capital. Many African countries have to deal with this chasm between the role of micro credit institutions and that of larger financial institutions. This is the space where SMEs operate and is referred to in the African Commission’s Report as the missing middle. (Oteh, 2011). Yet, the panacea for solving problems of economic growth in Nigeria often resides in adequate financing of small-scale industries. The missing middle or financial gap is a serious challenge in a fast-changing knowledge based economy because of the speed of innovation. Innovative SMEs with high growth potential, many in high- technology sectors, have played a pivotal role in raising productivity and maintaining competitiveness in recent years. Nonetheless, innovative product and services need investment to flourish, however great their potential might be. SMEs depend on capital accumulation, and capital accumulation requires investment and an equivalent amount of saving to match it. Two of the most important issues in developing countries, are how to stimulate investment, and how to bring about an increase in the level of saving to fund increased investment.

Most importantly, well functioning financial systems are heavily based on trust. An investor who deposits money in the bank or contacts his/her broker to buy stocks place his/her money and trust in the hands of the financial institution that provides her with advice and transaction services (Madura, 1996).

No wonder, Kneown (1996) stressed that, one reason why underdeveloped countries are underdeveloped is because, they lack a financial system that has the confidence of those who must use it. Particularly, the stock market crash of 2008 affected the Nigeria financial sector adversely. It generated a pessimistic outlook on the economy that led to a decline in the demand for loans and higher percentage of loan defaults, causing a consequent decline in the stock prices. Despite all these illicit practices in the financial sector, the Nigerian capital market is potentially the most viable source of capital for industries in Nigeria.

The primary focus of this research work emanates from the fact that, there exist a wide financial gap between the capacity of micro financial institutions and that of larger financial institutions. While large loans are available to a certain degree for large-scale industries, there is an evident lack of access to medium and small-scale finance for SMEs. In trying to bring a solution to this problem, the Central Bank stipulated that 20% of banks’ credit should be granted as loan to Small Scale Enterprises. This was not adhered to because, most loans granted to small scale holders were not repaid and so the banks did not consider them as creditworthy. In the light of these, the research has explored the financial incentives available to small-scale enterprises especially in the Nigerian capital market in order to provide the financial information needed by entrepreneurs.




1.2     Statement of Problem

In Nigeria, most small and medium enterprise ownership is indigenous. In major countries small and medium enterprises contribute close to half of the net output of the private sector and a significant proportion of the Gross Domestic product (GDP). In Nigeria however, it is being postulated that there are no adequate records to show for such growth by the small and medium enterprises. Considering the socio-economic importance and advantages to the nation, which include provision of employment, consumer and producer goods, promotion of indigenous technology, raw materials utilization, entrepreneurial Spirit, rural and industrial development.

Unfortunately, small and medium scale enterprises have relatively limited access to loan capital. They depend highly on financial resources of their owners and sometimes from friends and relatives, and retained earnings from the business as it expands. Most times all these proved grossly inadequate for finance needed projects as small scale enterprises grows further, market funds become imperative. The statements of problem that shall be addressed by this work are essentially:

  • What is the impact of the Capital Market in financing small and medium enterprises (SMEs)
  • How well small and medium enterprises benefited from the activities of the capital market in Nigeria
  • What is the relationship between capital market and other sources of finance for small and medium enterprise

Has the performance of small and medium enterprises impacted in the increase of Gross Domestic Product






This research work is set out to investigate issues challenges and opportunities in the Niger a Banking industry. Also to see if a significant relationship exist between corporate governance, ethics and bank failure. Relevant data were collected using well structured questionnaire. The statistical technique for data analysis and test of hypothetical proposition is chi-square (X2) The result of the findings revealed that the new code of Corporate Governance and Ethics for Bank is adequate of the Curtail Bank distress and that improper risk management, corruption of Bank official and over expansion of Bank are the key Issue why Bank fails. It is concluded that corporate Governance and ethics is necessary to the proper functioning of banks and can only prevent banks distress only f it is well implemented.
Recommendation about corporate Governance and Ethics should be use as tool to help stem the tide of distress, as it entails conformity with prudential guidelines of the government. The Central Bank and NDIC should enforce the need for all banks to have approved policies in all their operation.



  • Background to the Study

Financial scandals and misappropriation around the world and the recent collapse of large corporate organization in the USA and Europe have brought to the fore, again, the need for the practice of sound corporate governance, which is the system by which the affairs of companies are directed and controlled with the aim of increasing shareholders value and meeting the expectation of other stakeholders.

The case of Enron in the U.S and many cases in U.K such as Polly Peck, Maxwell Communication and British Ceylon Corporate Ltd (BCL) are all becomes stressing the need for the adoption of good corporate governance in our various organizations. In Nigeria, most especially the financial industry the retention of public confidence through the enthronement of good corporate governance and ethics remain an uncompromised duty given the role of the industry in the credit to the needy sector of the economy, the payment and settlement system and the implementation of monetary policy.

It is a veritable tool for ensuring corporate survival since business confidence usually suffers each time a corporate entity collapses. Most of the business failures in the recent past are attributed to failure in corporate governance and ethical practices. For instance the collapse of bank in Nigeria in the early 1990s to date was as a result of inadequate corporate governance and ethics practices such as insider related to credit abuses and poor risk appreciation and internal control failures.

To stern the tide, this ugly trend scholars and practitioners have advocated consistently different approach and theories to corporate governance and industrial ethics. A critical tool in corporate governance be adequate disclosure on the risk profile of banks in the overall interest of the stakeholder (ICAN 2006, P. 345) defined “corporate governance as the system by which the affairs of companies are directed and controlled by those charged with the responsibility” Magdi and Nadereh (2007) view corporate governance as ensuring that the business is run well and investors receive a fair return. Oyejide and Siyibo (2001) defined corporate governance as the relationship of the enterprise to shareholders or in the wider sense as the relationship of the enterprise to society as a whole.


1.2     Statement of the Problem

Corporate failures in the world, in recent time have kindled interest in corporate governance and ethics. Nigeria as a nation has suffered a lot of decadeness both in the public and private sector. The political and business climates had become so worse off that by 1999 when the nation returned to democratic rule, under the leadership of Obasanjo, it was rated as one of the most corrupt nations in the world.

Most public corporation, such as PHCN, NITEL, NNSL, water board etc were either dead or simply drain pipe of public resources, while the few factories that were merely available were working below capacity. The banks with their numbers leaving a trail of woes. For investor, shareholder, suppliers, depositors employees, and other stakeholders. The falsification of financial statement of Cadbury Nigeria PLC in 2006, the liquidation of bank in 1980’s and 26 Bank in 1997 and the recent sack of CEO’s of nine banks in Nigeria after CBN’s audit and investigation are all evidence showing the sorry state of the country.

What measures should be put in place to prevent the occurrence of corporate failure in the banking industry? How can organization best practice corporate governance? How can banking industry? How can we guarantee public confident? The need to proffer solution to the questions greatly informed this research work.

1.3     Objectives of the Study

This study seeks to examine how corporate governance and ethic have been embraced in the Nigeria banking industry. To attain this, we intend to:

  1. Find out how corporate governance is being practiced in the Nigeria
    banking industry.
  2. Ascertain the extent of professional ethic adoption in our banking industry.
  3. Examine the role of shareholder and board of director, who manage the affairs of the companies.
  4. Examine the corporate governance demand and requirement in the banking industry in ensuring accountability and transparency.
  5. Ascertaining what were responsible for the poor performance of banks in the CBN’s audit of 2009/2010.

1.4     Research Questions

*        Why is corporate governance and ethics so important to the Nigeria banking industry?

*        How does corporate governance and ethics effect membership to
change in an organization?

*        What is the relationship between corporate governance and ethic to
members in the banking industry?

*        To what extent may the codes of corporate governance and ethics applied to the Nigeria banking industry?

*        What area can corporate governance and ethics be address in the Nigeria banking industry?


1.5     Statement of Hypothesis

          Hypothesis One  

Ho:    Corporate governance and ethics have no significant relationship with banks performance.

Hi:     Corporate governance and ethics have significant relationship with banks performance.

Hypothesis Two

Ho:    Effective Corporate Governance and ethics in the Nigeria Banking Industry does not raise a high standard of accountability and transparency.

Hi:     Effective corporate governance and ethics in the Nigeria banking industry raise a high standard of accountability and transparency.

Hypothesis Three

Ho:    Corporate governance and ethics does not help to avoid corporate failures and scandals.

Hi:     Corporate governance and ethics help to avoid corporate failures and scandals.

  • Significance of the Study

The importance of corporate governance cannot be over emphasized. It is ii important tool in regulating corporations. Corporate governance and ethics help to avoid corporate failures and scandals. Corporate governance is seen as the structure of relationship within an entity for making decision and its implementation. It is particularly important because it ensure accountability and transparency in the manner an organization is run. Stakeholder interest is best protected, there would be public confident financial scandals and fraud would eliminate if sound corporate governance and ethics are practiced.

  • Scope of the Study

This research work seeks to study the emerging concept of corporate governance. Its role in financial accountability and transparency, financial statements could represent a true and fair view position of them.

It also intends to study the place of ethics in our financial industry and the roles in governing corporate decision.
However, work is limited in scope to corporate governance and ethics in our banking industry.

  • Limitation of the Study

The ideal cannot be attained in this research work because of some obstacles that have been encountered. Amongst these are:

  • The time duration for this research is not enough to carry out the research. The scope has been limited in respect to population as well as the findings thereof.
  • Financial difficulties have made it not possible for the researchers to meet all designated population. Therefore, various sampling techniques will be employed.
  • Difficulty in getting information from the company’s staff under study. This is so because most of the documents the researchers asked for where not made available. Also most interviews were not granted and some of the questionnaires sent out were either destroyed, returned or not answered.
  • Definition of Terms

Corporate Governance: This is defined as the system by which companies are directed and controlled.

Ethics: This is defines as the philosophical analysis of human morality and conduct.

Financial Statement: This are the means of communicating to interested parties information on the resources, obligations and performances of the reporting entity or enterprise.

Fraud: Can be defined as a deliberate or intentional act by a privilege individual or group of individual s within or outside the organization, which results in a misrepresentation of financial statement.

Central Bank of Nigeria: Is defined as a banking system in which a single bank has a complete monopoly in the note issue.

Corporation: This is defined as an organization or a group of organization that is recognized by law as a single unit.

Morality: Are principle concerning right and wrong or good and bad behavior.


The Impact of Audited Financial Statements on an Organizational Performance 



The project examines the impact of audited financial statements on an organizational performance using Nigeria bottling company as a case study. The main objective of this study is to examine whether the implementation of financial statement has helped in the growth and development of the organization. The primary source of data collection was used in gathering data from respondents. A structure questionnaire was designed by the researcher and validity by two experts from the statistics department was used to obtain data Chi-Square (X2) was used to test hypotheses formulated. It was discovered that audit report is very important to the organization, especially Nigeria bottling company plc, which was the areas of the main focus, it enhance the growth of the organization and has indeed brought in positive impact. It was concluded that it is the primary duty or responsibility of management and the board of directors of the company to prepare the financial statement and it is the duty of the auditor to examine the financial statement prepared by the management. It was recommended among others that audited financial statement should be prepared in a manner that will show the responsibilities of both the auditor and management




Background to the Study

The demand for auditing arises from the potential conflict of interest that exists between owners (stakeholders) and managers. The contractual arrangement between those parties normally requires that management issues a set of financial statements that purports to show the financial position and results of operation of the entity. In order to properly evaluate the financial statements, the parties to the contract must agree on a benchmark or criterion to measure performance without an agreed-upon criterion, it is impossible to measure the fair presentation of the financial statements.

Generally Accepted Accounting Principles (GAAP) have, over times become the primary criteria used to prepare financial statements. As the term implies, these principles are generally accepted by the diverse users of financial statements.   

Nigeria took a step to redefine the scope and maintenance of state enterprise in 1953 as a result of the controversy surrounding public sector ownership and the virtues of private cooperation in Nigeria.
Nigeria bottling company limited is one of the few multinational organizations that had it’s beginning in Nigeria from a small family owned operations at inception.

The Nigeria bottling company limited (NBC) was in cooperated in November 1951 as a subsidiary of the A.G levities group with the franchise to bottle and sell coca-cola product in Nigeria. Production began in 1953 at bottling facilities in Ebuta-Melta, Lagos.

The role played by audit in an organization performance in developing countries is progressively becoming important as it gives room know what is owned and what is spend in the discharge of duty by the NBC. It is important for the private sector organization in the country to appoint an independent auditor for who will present a report stating whether the financial statement and the book of account shows a true an fair view off the financial position of the organization.

The Impact of Audited Financial Statements on an Organizational Performance 


Statement of Problem

Over the years there has been a controversy over the impact which audited financial statement has on organization performance. In view of this, the research wishes to investigate wheat impact audited financial statement actually have in an organization performance.

As a result of this uncertainty of the auditing financial statement has also been under-rate. The study is also set out to remove the uncertainty and make clear the important of auditing financial statement in an organization performance.

The Impact of Audited Financial Statements on an Organizational Performance