EVALUATION OF LIQUIDITY ASSETS MANAGEMENT

Project Abstract

Liquidity management is a critical aspect of financial management for any organization. It involves the strategic management of liquid assets to ensure that a firm can meet its short-term obligations without incurring significant costs. This study aims to evaluate the effectiveness of liquidity assets management in enhancing the financial performance and stability of firms. The research will focus on analyzing the liquidity management practices of a sample of companies across different industries to identify key strategies and best practices. The research will employ a mixed-methods approach, combining quantitative analysis of financial data with qualitative insights from interviews with financial managers and industry experts. The quantitative analysis will involve assessing key liquidity ratios such as the current ratio, quick ratio, and cash ratio to gauge the liquidity position of the firms under study. These ratios will be compared to industry benchmarks and historical trends to assess the effectiveness of the firms' liquidity management practices. In addition to quantitative analysis, in-depth interviews will be conducted to gain a deeper understanding of the liquidity management strategies adopted by the firms. Financial managers will be asked about the factors influencing their liquidity management decisions, the challenges they face, and the impact of liquidity management on overall financial performance. Industry experts will provide insights on best practices in liquidity management and emerging trends in the field. The findings of this research are expected to provide valuable insights for practitioners and policymakers in enhancing liquidity management practices. By identifying effective strategies and best practices, firms can improve their liquidity position, reduce financial risks, and enhance their overall financial performance. The research will also contribute to the existing body of knowledge on liquidity management and provide a foundation for future research in this area. Overall, this study aims to shed light on the importance of liquidity assets management in ensuring financial stability and sustainability for firms. By evaluating the current practices and strategies employed by firms, this research seeks to provide practical recommendations for improving liquidity management and achieving better financial outcomes.

Project Overview

<p> </p><h3><strong><br>INTRODUCTION</strong></h3><p>Banks have been accused of taking two much risk in unexpected new environments and lines of business. The advice being given is for the banks to avoid further in exposure by threatening to move tradition that will understand the activities banks, however are being charged by their shareholders to maximize holder’s wealth overtime. To achieve this goal, banks must search out for opportunity in the financial market and loan to manage risk by implementing more systematic system of risk control. At present it appears appropriate to develop specific management control mechanism for each new risk element. The system being designed by bankers is in contrast one that allows each new form of risk to a new element in an overall analytic area of banks. This approach requires an informational environment that enables risk managers to analyze all of the risk inherent in a given transaction.</p><h3><strong>1.1 &nbsp; BACKGROUND OF THE STUDY</strong></h3><p>The aim of this project writing is to bring out the way in which liquidity asset is managed in Nigeria banks. Most especially first bank Yabubu Gowon Way Kaduna is my case study and the kind of services offered by first banks in the management of liquidity.</p><p>The banks engaged in the business of providing adequate service, which are:</p><p>i. Universal banking services to corporate bodies</p><p>ii. Loans and advances to its customer</p><p>iii. Leases.</p><p>&nbsp;iv. Investment Banking services</p><p>&nbsp;v. Financial Advisory services to corporate bodies</p><p>&nbsp;vi. Foreign exchange services. &nbsp;</p><h3><strong>1.2 &nbsp;STATEMENT OF THE PROBLEMS</strong></h3><p>First bank Nigeria Plc is expected like all other banks to provide quick and efficient services to both customers and interested parties. The banks should know the value of time and try as much as possible to serve its customers in the shortest possible time. This is because, the customers are the business of the bank and that is why they are regarded as assets of the cast and other valuable things deposited to them by its customers. This why each and every paper in the bank is considered as money because it talks about it. One of the functions of banks is to grant loan to customer, so as to assist them to undertake various projects for the development of economic activities in the country. In this aspect both the customers and the bank have the same aim that is to make profit. In other words, to achieve this aims the bank and customers have to perform their duties for the smooth running of the system. In most cases the two side always make things difficult for one another on the part of the honest and firm so as allow the bank form a good reputation and develop good banker – customer relationship. On the other hand the banking industry is expected under normal circumstances to bring out its activities not only efficiently but also accurately. But this is almost apposite and has led to in looking at the problems of the customers in the banks, it can be seen that the blame is on both sides. Some of these problems are</p><p>i. Opening Account: Accounts are opened by the procedure laid down by the customer who thinks it’s a waste of time don’t know that the banks has to be careful on this sensitive issue. When opening the account that all necessary data is collected from the customer which is be used in payment and all other future transaction.</p><p>ii. Cash Withdrawal: In this, banker has to satisfy himself with the validity of the charges or withdrawal slip (in case of saving account). This can take time which the customer may fee he/she is wasting time. Since it is the duty of the bank is to safe guard all cash under its custody satisfaction is very much necessary.</p><p>iii. Obtaining Loan from the Bank: It is clean principle and natural justices that loan should only by granted with security and the security has to be sufficient enough to cover the debt. In most cases customer ignores the </p><p>1.3 &nbsp;OBJECTIVE OF THE STUDY</p><p>The purpose of this study is to efficiently and liquidity can be evaluated efficiently and effectively in Nigerian banks in order to guide against bankruptcy: It is also aimed at affecting a concrete control to consumer borrowing of limited resources available to the banks in order to guide against bankruptcy.</p><p>It is also aimed at affecting a concrete control to customer borrowing from the bank and efficient management of limited resources available to the bank the management and control.</p><p>i. From the bank to other parties at the request of customer.</p><p>ii. From customers to the banks</p><p>iii.From the bank to the customers</p><p>iv. To and from other banks including the central bank of Nigeria.</p><h3><strong>1.4 &nbsp; RESEARCH HYPOTHESIS</strong></h3><p>As a starting point for the research work the following hypothesis were developed.</p><p>Ho: Evaluation of liquidity management in Nigerian banks has always been without problems.</p><p>Hi: Evaluation of liquidity management in Nigerian banks has not always been without problems.</p><h4><strong>1.5 SIGNIFICANCE OF THE STUDY</strong></h4><p>The purpose of this research work is to accomplish the following.</p><p>i. To ascertain the level of risk in liquidity assets management and how such risk could be eradicated. This project hopefully would be beneficial to the management of First Bank Plc, as well as other Nigerian banks</p><p>ii. To partially fulfill the requirement for the award of national diploma in accountancy</p><p>iii. This project will serve as a basis for further research on this topic</p><h5><strong>1.6 &nbsp;SCOPE AND LIMITATION OF THE STUDY</strong></h5><p>All banks and other financial institutional deal in liquidity hence managing liquidity: however this study will concentrate on how Nigeria banks managed liquidity with particular emphasis on first bank Plc. Yakubu Gowon way branch as a case study.</p><p>i. Uneasy access to the bank relevant document</p><p>ii. Insufficient time due to short period available for the study and during the project writing</p> <br><p></p>