ASSESSMENT OF FINANCIAL PLANNING ON FIRM’S PROFITABILITY – A STUDY OF NIGERIAN BREWERIES PLC, AMA (2003-2013)

ABSTRACT
The study assessed the application of financial planning and its influence on the profitability of Nigerian Breweries Plc, Ama, Enugu State.  The overall objective of the study was to assess whether the application of financial planning has helped to boost the profitability of the company.  Financial planning was evaluated based on the application of short-term and medium term financial planning.  Two objectives and two hypotheses were formulated and tested in the study.  The researcher adopted the survey design and structured questionnaire was administered to selected respondents in the company. Because of the large size of the population, a multi-stage sampling technique was employed. The first stage involves the random selection of all the accountants and management staff in the company who are involved in financial planning policy and procedures. The second stage was the random selection of 10 management staff and 11 accountants. Altogether, 21 respondents were selected as sample for the study.  Descriptive and inferential statistics were used to present the data while the Chi-Square statistical technique was used to analyze the hypotheses. Findings from the study showed that short-term financial plans do not influence the profitability of Nigeria Breweries, Ama, Enugu.  This result was supported by the test statistic (X²<t_0.025, 5.4<t* = 5.9, p=0.000<0.05). Medium-term financial plans influence the profitability of Nigeria Breweries, Ama, Enugu.  This result was also supported by the test statistic (X²>t_0.025, 9.95>t* = 5.9, p=0.000<0.05).  Based on the findings of the study, the researcher recommended as follows: that the management of Nigerian Breweries Plc, Ama, Enugu State should adopt a medium to long term financial planning and place less emphasis on short-term financial planning as it has been shown that short-term financial planning has no influence on the profitability of the company. The management of the Nigerian Breweries Plc, Ama, Enugu State should also ensure that those who are involved in financial planning are well trained and are up-to-date with financial and econometric modeling required for medium to long-term financial planning.