TABLE OF CONTENTS
Title Page i
Certification ii
Dedication iii
Acknowledgement iv
Table of Contents v
List of Tables viii
Abstract x
CHAPTER ONE: INTRODUCTION
1.1 Background of the Study 1
1.2 Statement of the Problem 3
1.3 Objective of the Study 4
1.4 Relevant Research Questions 5
1.5 Research Hypotheses 5
1.6 Significant of the Study 6
1.7 Scope and Limitations of the Study 6
1.8 Definition of Terms 7
References 8
CHAPTER TWO: REVIEW OF RELATED LITERATURE
2.1 Background Information of Nigerian Plc 9
2.2 Meaning and Classification of Inventories 11
2.2.1 Raw Material Inventory 12
2.2.2 The Work-in-Progress Inventories 12
2.2.3 Finished Goods Inventory 13
2.2.4 Supplies Inventory 13
2.3 Inventory Management 14
2.3.1 Stock Purchasing 14
2.3.2 Inventory Holding/Storage 16
2.4 Stock Utilization 20
2.4.1 Stock Insurance 20
2.4.2 Stock Coding 21
2.4.3 Stock Taking 22
2.4.4 Periodic Stocktaking 22
2.5 Stock Valuation 23
2.5.1 First-in-First-Out (FIFO) 24
2.5.2 Last-in-First-Out 25
2.5.3 Weighted Average Cost 26
2.5.4 Standard Price/Cost 27
2.5.5 Lower of Costs/Market Value 28
References 29
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Sources of Data 30
3.2 Research Design 31
3.3 Population/Sample Techniques 31
3.4 Administration of Research Instrument 34
CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS
4.1 Data Presentation 35
4.2 Test of Hypotheses 46
4.2.1 Test of Hypothesis One 46
4.2.2 Test of Hypothesis Two 49
4.2.3 Test of Hypothesis Three 52
CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS
5.1 Summary of Findings 56
5.2 Conclusion 58
5.3 Area for Further Study 60
Bibliography 61
Appendix 62
LIST OF TABLES
Table 3.1: Total of Each Department
Table 4.1: Personal data Presentation
Table 4.1.1: Personal Data Presentation
Table 4.1.2: Is the keeping of stock the sole responsibility of the stores
Table 4.1.3: How often do you Allow Stocks to Move Out of the Store without Requisition paper?
Table 4.1.4: Do you often run out of stock in your company?
Table 4.1.5: How often do you Allow Stocks to move out of the store without requisition paper
Table 4.1.5: What do you think axe the likely causes of stock out in your company?
Table 4.1.6: What basis is Stock taking done in Nigeria Breweries?
Table 4.1.7: What type of inventory valuation do you operate in Nigerian Breweries?
Table 4.1.8: Do you agree the adequate inventory management result in profitability?
Table 4.1.9: To what extent do you think that inventory management enhances efficiency and workflow in your industry?
Table 4.1.10: What do you think are the effects of poor inventory management and valuation?
Table 4.1.11: Do you agree that there is need for more inventory control in Nigerian Breweries?
ABSTRACT
This study captioned an appraisal of Inventory Management and Valuation in manufacturing companies in Nigeria. A Study of Nigeria Breweries Plc 9th Mile Corner embarked upon with the view to critically appraising the efficiency of inventory management and valuation in demerits as it concerns manufacturing companies. Reliably, manufacturing companies cannot exist without stocks. Therefore, it is good for every meaningful manufacturing company to take record of its stock. This is because a little deviation form the appropriate way of stock valuation and management will lead to material wastes, reduction in profit and loss of goodwill. Specifically, the aims of this study are; (i) to appraise the management of inventories in terms of merits and demerits as it concerns manufacturing companies and Nigeria Breweries in particular (ii) to ascertain the extent of application of stock valuation methods in manufacturing companies (iii) to ascertain the effect of various stock valuation methods on the reliability of the financial statement (iv) to determine the effects of poor storage spaces, under or over-stocking and non-store record keeping. It is also the objective of this study to make suggestions in a view to helping to solve the problems.
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
It has been observed over the year that inventories constitute the most significant part of current assets of manufacturing companies in Nigeria and the world in general, moreover, in most industrial outlets raw material inventories account for over 50% of company’s cost of production. It is argued that a considerable amount of invested capital are locked up in stock while the cost of keeping (holding) these stocks amount to about one-quarter of the value of the stocks.
Further in the 1930s, most businesses in Europe and America experienced great slumps. This business slump was as a result of stock mismanagement and valuation. It was during this period the businessman coined the statement “stocks are the graveyard of any business”. The successor failure of any business depends in their level of stock management and valuation.
According to the statement of accounting standard (SAS) No. 4, 1986, “Appropriate classification and accurate determination of the quantity and cost of stocks are necessary for proper determination of the result of the operation of an enterprise and for the presentation of current assets in its balance sheet”.
Further, Olojede 1996, said that in this ha time any good management will want to avoid two danger points usually associated with stock control.
These are:
- That of inadequate stock which disrupt production and loss of sales and good customers and
- Excess stock which constitute carrying costs and obsolescence risk.
As far as manufacturing companies are concerned stocks exist in various form; raw materials work-in-progress, finished goods and engineering spare parts/consumables. The stock of raw materials, work-in-progress and engineering spare parts/consumerable facilities production, which stock of finished goods is required for smooth marketing operation. Excessive investment in stock will cause unnecessary tie up of the firms fund increase in carrying cost (cost of keeping stock), and risk of liquidity while under-stocking will cause production hold-ups failure to meet delivery commitments and possible reduction in profits. Therefore, the aim of stock management should be to avoid excess and inadequate levels of stock but to maintain sufficient stocks for the smooth production and sales operations.
Infact, this study will seek to identifying and appraise the various stock management and valuation methods in manufacturing companies and in Nigeria Breweries in particular.
1.2 STATEMENT OF THE PROBLEM
