ABSTRACT
The survival of a business organization depends on the degree and accuracy of keeping proper accounting records, most especially the records that determine the profit of the firm.
One of the assets of a business that calls for adequate record keeping is the current asset of stock. This is because, it constitutes the largest portion of the current assets of a company being it a trading or manufacturing concerns. Before a business starts materials, work stock either in the form of raw materials, work in progress or finished goods. Stock is therefore the principal source of revenue for any business enterprise. Beside, the asset of stock is particularly significant because it may materially affect both the income statement and the balance sheet. To determine the net income, the cost of stock sold or produced is the largest deduction from sales, considering the importance of stock in a business; care should be taken in counting and pricing the stock at the year and since a small error in the valuation of the closing stock may have a material effect upon the net income. The motive behind this research project therefore is to investigate with the help of discussion, questionnaires and review of related literature on how business enterprises account for their stocks, the problems confronting them and the effects of improper stock valuation on profitability with particular reference to Unilever Nigeria plc.
TABLE OF CONTENTS
Title page i
Approval page ii
Certification iii
Dedication iv
Acknowledgement v
Abstract viii
Table of contents ix
CHAPTER ONE
- Introduction 1
- Background of the study 2
- Statement of problem 6
- Objective of the study 8
- Research question 9
- Statement of hypothesis 10
- Significance of the study 10
- Scope of the study 11
- Limitation of the study 11
- Definition of terms 12
CHAPTER TWO
- Literature
review 17
- Historical background 17
- Definitions 18
- Stock
management 20
- Classification of stock 22
- Essentials of stock management 25
- Needs for stock keeping 26
- Stock checking and stock taking 28
- High level of stock 29
- Cost Influencing stock 31
- Stock level classification 33
- Cost flow assumption 36
- Basic rules to stock valuation 42
- Methods of establishing stock quantitative 44
- Choosing stock costing methods 45
- Effects of errors in stock valuation 47
- Chapter summary 50
CHAPTER THREE
- Research
methodology 53
- Introduction 53
- Research design 54
- Source
of data collection 55
- Primary sources of data 55
- Secondary sources of data 56
- Population and sample size 56
- Sample techniques 59
- Validity and reliability of measuring instrument 60
- Method of data analysis 61
CHAPTER FOUR
- Presentation
and analysis of data 63
- Introduction 63
- Data presentation, classification and conclusion 66
- Analysis of data according to research hypothesis 69
- Analysis of data to test hypothesis 78
- Interpretation of result 87
- Analysis of question 92
CHAPTER FIVE
- Summary,
Conclusion and Recommendation 93
- Introduction 93
- Summary 93
- Recommendation 96
- Areas of further study 97
Appendix 1
Appendix 11
Reference
CHAPTER ONE
- INTRODUCTION
Stock is one of the largest and most valuable current assets of any trading or manufacturing concern. They are items of value held for use or sale by a firm which include goods awaiting sales, most at times called finished goods, goods in the course of production, also called work in progress (WIP) and goods to be consumed in the course of production, called raw material. Conversely, it excludes long term assets subject to depreciation, called fixed assets and those that are subject to amortization, called intangible assets.
Nevertheless, stock of manufacturing firms constitutes the second largest item after fixed assets in the balance sheet in terms of monetary value; hence it is paramount to attach importance to the control and management of stock and its usage by the firm.
Valuation is a measurement process, hence by stock valuation, we refer to the assignment of monetary value to stock the value attached to stock at the end of every financial year would go a big was to determine the level of profitability of a firm at the particular year.
This research work therefore, centers on investigating the relationship between stock valuation and profitability and improper stock records maintenance in a firm with reference to Unilever Nigeria Plc as a study.
- BACKGROUND OF THE STUDY
This study in based on Unilever Nigeria plc, which outfit is located at Aba, Abia state. It was formally known as the West Africa Soap Company Limited in 1923 initial its change to Unilever Brother’s Nigeria limited in 1955.
It first started with importing cold water detergent into counting which was white in colour with some blue greenish sparkles. In 1947, the firm introduced the OMO blue detergent which completed with cold water test. The firm started diversity its manufacturing plant which leads to the establishment of Aba Plant in 1949.
Initially, the firm manufactures scope was based on local palm oil and now they have strengthened to foot hold and drink business by merging with Lipton Nigeria Limited in product industries on December 1988 and become giant in personal production process.
