TABLE OF CONTENTS
CHAPTER ONE: INTRODUCTION
1.1 Background to the Study
1.2 Statement of the Problem
1.3 Objective of the Study
1.4 Research Questions
1.5 Hypotheses
1.6 Justification for the Study
1.7 Significance of the Study
1.8 Scope of the Study
1.9 Operational Definition of Terms
CHAPTER TWO: REVIEW OF LITERATURE
2.0 Introduction
2.1 Conceptual Model
Content
2.1.0 Risk Management Defined
2.1.1 Capital Structure Defined
2.1.2 Working Capital Defined
2.2 Theoretical Framework
2.2.1 Theories on Working Capital and Investment Capital
2.2.2 Trade off Theory
2.2.3 Pecking Order Theory
2.2.4 Agency Costs Theory
2.2.5 Information Signaling Theory
2.3 Empirical Review
2.3.1 Empirical Studies on Working Capital
2.3.2 Empirical Review on Long Term Capital
2.4 Variable Motivation
2.5 Gap in Literature
CHAPTER THREE: METHODOLOGY
3.0 Introduction
3.1 Research Design
3.2 Population
3.3 Sample size and sampling Technique
3.4 Model Specification
3.5 Ethical Consideration
CHAPTER FOUR: DATA ANALYSIS, RESULTS AND
DISCUSSION OF FINDINGS
4.0 Introduction
4.1 Graphical Illustrations, Descriptive Statistics and Regression Analysis
4.2 Correlation Analysis
CHAPTER FIVE:SUMMARY, CONCLUSION AND
RECOMMENDATIONS
5.0Introduction
5.1Summary
5.2 Conclusion
5.3 Recommendations
5.4 Contribution to Knowledge
5.5 Suggestion for Further Research
References
Appendix
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
Risk may be defined as the probability of occurrence of an adverse event. Risk refers to the uncertainty that surrounds forthcoming events and outcomes. It is the expression of the likelihood and impact of an event with the potential to affect the achievement of an organization’s goals (Heinz, 2010). Risk can be seen as a state where there is a likelihood of a loss but also a hope of gain (Emma & Gabriel 2012). The term risk can also be defined and elucidated in many different ways depending on the aim and perspective of a discussion. Kaplan and Garrick (1981) stated that a risk is a doubt joint with damage or a loss. They mean that something that is indeterminate does not have to incur a risk; however, if an event is considered as both indeterminate and a loss is included, it can be defined as a risk. The Society for Risk Analysis (2012), defines as “The potential for realization of unwelcome, adverse consequences to human life, health, property, or the environment”. Since one would never jeopardize the loss if there were no chance of a win. To realize the existence of a risk, one must be aware of both the gains and losses incurred and therefore a risk can be reflected as individual and relative to the observer (Kaplan & Garrick, 1981). All these definitions seek to make known that risk is to be seen as part of daily life, and the presence of risk in any environment should not be a problem but the focus should be on how those risks are being managed and in turn minimizing their potential effect.
Risk management on the other hand deals with the process of identifying and controlling potential risks that can be faced by an organization. Risk management is about identifying the risk to be managed, risk to leave unattended and risk that need to be hedged. Risk management is recognized in today’s business world as an integral part of good management practice. In its broadest sense, it entails the systematic use of management policies, procedures and practices to the tasks of identifying, analyzing, assessing, treating and monitoring risk. Risk management refers to a practice of identifying loss exposures faced by an organization and selecting the most appropriate procedures for treating these particular spotlights effectively (Rejda, 2003). Risk management is the identification, assessment, and prioritization of risks followed by coordinated and economical application of resources to mitigate, monitor, and control the probability and/or impact of unfortunate events or to maximize the realization of opportunities (Wenk, 2005).
Effective risk management can bring far payoffs to the company irrespective of what type it is. These paybacks include, superior financial performance, better basis for strategy setting, improved service delivery, better competitive advantage, less time spent firefighting and fewer unwanted surprises, increased likelihood of change initiative being achieved, closer internal focus on doing the right things properly, more efficient use of resources, reduced waste and fraud, and better value for money, improved innovation and better management of contingent and maintenance activities (Wenk, 2005). Risk management in manufacturing sector is about the categories and types of risks that can be opened to companies in the manufacturing industries and the approach which the companies adopt in managing those risks. The ways and manners which companies adopt in managing their risks can have either of positive or negative effect on their performance. Here are some of the risks that manufacturing companies can be exposed to; environmental risk, reputational risk, technological risk, and legal risk.