Abstract

This study is designed to assess current asset management practice of gebreguracha Micro-
finance institution which is located in oromia regional state North shoa zone. The general
objective of the study is assessing the current asset management practice of gebreguracha micro
finance institution. The researcher will be guided by the following research objectives:- to
examine the policy that institution uses in cash management, to identify short term loan
management system of the institution, give some construction suggestion and recommendation
based on the fact of study, to identify the motive for holding cash and marketable security of the
institution. It is worth conducting research this topic because current asset management plays a
significant role in order to evaluate the performance of the organization. The study uses census
inquiry because the total numbers of respondent are twenty (20) in numbers. The study will be
collected by using questionnaire and interview because of its leaser time consumption, easy to
elaborate and analysis it. Secondary data would be used to support primary data. The main aims
of this study are to identify factor that affect current asset management. Such as credit policy of
the firm, bad debt expense and absence of trained man power. In order to overcome the problem
of current asset management the institution should hire skilled man power.

Key words: current asset management, cash management, loan management, marketable
security management.

i
 Acknowledgment
First and for most I would like to express my sincerely thanks to Almighty God, the merciful
who helped me throughout my life. Next my deepest gratitude goes to my advisor Sr.Nigist
Melesse (.Msc) for her helpful and critical advice and appreciation in the preparation of this
paper. Finally I would not forget the valuable moral and financial support made by my family
and my friend for their appreciation.

ii
Table of Contents
Acknowledgment.............................................................................................................................ii
CHAPTER ONE..............................................................................................................................1
1. Introduction..................................................................................................................................1
1.1Background of the study.........................................................................................................1
1.2 Statement of the problem.......................................................................................................2
1.2.1 Research
question…………………………………………………………………………………….
1.3 Objective of the study............................................................................................................3
1.3.1 General objectives...........................................................................................................3
1.3.2 Specific Objective......................................................................................................3
1.4 Significance of the study........................................................................................................3
1.5 Scope of the study..................................................................................................................3
1.6Limitation of the study............................................................................................................4
1.7 Organization of the paper.......................................................................................................4
CHAPTER TWO.............................................................................................................................5
2. Literature Review........................................................................................................................5
2.1 Theoretical Review................................................................................................................5
2.2 Current assets.....................................................................................................................5
2.3 Cash management...............................................................................................................5
2.4 Objective of cash managements....................................................................................6
2.5 Aspects of cash management.............................................................................................6
2.6 Importance of cash management...................................................................................7
2.7Motive for holding cash......................................................................................................7
2.8 Cash management techniques...........................................................................................7
2.8.1 The concept of loan.........................................................................................................8
2.8.2 Loan management...........................................................................................................8
2.8.3 Objective of loan management........................................................................................9
2.8.4 Marketable Securities......................................................................................................9
2.9Type of Marketable Security...............................................................................................9
2.9.1 Policies for financing current asset...............................................................................10

iii
 2.9.2 Empirical Review..............................................................................................................10
2.9.3 Conclusion and knowledge gap........................................................................................11
CHAPTER THREE.......................................................................................................................12
3. RESEARCH METHODOLOGY..............................................................................................12
3.1 Description of the study.......................................................................................................12
3.2 Research design....................................................................................................................12
3.3 Target population.................................................................................................................13
3.4 Sampling Technique............................................................................................................13
3.5 Source of data and method of data collections....................................................................13
3.6 Data analysis and presentation.............................................................................................14
4. CHAPTER FOUR………………………………………………………………………………

4.1 Budget and time schedule………………………………………………………………………..

4.2Time schedule…………………………………………………………………………………

4.3Budget schedule………………………………………………………………………………

REFERENC E………………………………………………………………………………

APPENDIX…………………………………………………………………………………………
…

iv
CHAPTER ONE

1. Introduction
1.1Background of the study
Current asset is an asset which can be converted to cash or used to current liability within 12
months. Typically includes cash, cash equivalent, short term investment, loan and the portion of
prepaid liabilities which would be paid within year. Cash and marketable security are the most
liquid of the friend asset cash is the reedy currency to which all liquid asset can be reduced.
Marketable securities are short term investment can be reduced. To gather cash and marketable
securities act and a pool of fund that can be used to pay bill as they come due and to meet any an
expected outlined. The most important item found in the current section either are cash and cash
equivalent, marketable securities, short term loan (Roses 2000).

Normally cash, marketable security short term loan of the company is getting in to financial
difficulty it begins paying its bills more slowly borrowing from its bank and so on. If current
liabilities are rising faster than current asset the current ratio fail and this could spell trouble.
Because the current ratio provides the best single indicators of the extent to which claim of short
term creditor are converted by asset are expected to be converted to cash fairly quickly, it is the
most commonly used measure of short term solvency (Pandey 2005 and Brigham 1995)

The aging analysis of your current asset including stock, debtors etc, have large importance.
Since it is directly linked to the liquidity position of the institution you have more change of
profitability, when you are success full in reducing your money in hands of your associates.

In addition to cash the current asset usually owned by service business are short term loan cash
and marketable security and supplies and other expenses. They also called the handling of the
current of asset of company. Any asset that company or business has that are cash equivalent or
can be liquidated in to cash in the period of the year are considered as current asset. In other way
current asset are short term asset either are cash or cash equivalent which can be used in
operation in one year (Warren, 1987and John 2002)

1
To improve the working capital of financial institution especially Gebreguracha Micro-finance to
introduce new activities or opportunity to the organization of current asset management is very
important so in to survive and fulfilled objective and obligation of financial intermediary as
whole and Gebreguracha Micro-finance as particularly financial intermediary must manage their
current asset properly.

1.2 Statement of the problem

Gebreguracha Micro- Finance is one of the finance institution that provide loan and saving to
client to help them engage in productive and to raise their small business.

Financial service generally invades saving and credit as well as some Gebreguracha Micro-
finance program has recently been considered as important instrument towards poverty
reduction. Current asset are those assets which can be converted in to cash with in accounting
year and includes cash, short term security, debt and short term loan. They are cash and other
asset that may reasonably expected to realize in cash or sold or used up usually one year or less,
through the normal operation of business. Current asset management is the handling of current
asset of the institutions. Any asset that institutions or business has that is the equivalent of the
cash or liquidated current asset(Fees and Warren 1987)

One of the major effects of financial institution is improper management of current asset which
have greater impact for the survival of the institutions because of liquidity problem, loss of profit
unable to fulfill customers demand fear to survive. Problem of ensuring their accountability
Gebreguracha Micro finance is around of current asset financial and management may have
critical impact on microfinance day to day operation(John Jordon 2002)

Therefore these studies assess current asset management of Gebreguracha Micro finance
institution. This study try to address on identification of the policies that institution follows on
current asset management the monitoring mechanisms to manage current asset in the institutions
and the main factor that affect current asset management.

2
1.2.1 Research Questions

 Does the institution properly examine the current asset or not?

 Does the theory and practical part of current asset properly coordinated (applied) or not?

 Does the Gebre guracha branch current asset management aspect the same as different
micro-finance current asset management or not?

1.3 Objective of the study

1.3.1 General objectives
The general objective of this study is to assess the current asset management practice of
Gebreguracha Micro-finance.

1.3.2 Specific Objective

The specific objectives of this study would be:

 To show the source of current asset for the institution

 to identify whether the institutions provides advisory service to its customer or not and
 To identify the impact of current asset on the development of the institutions.

1.4 Significance of the study

The aim of this study will be to examine the current asset management practices of
Gebreguracha Micro-finance. The attainment of this broad objectives has benefit for different
parties especially for policy makers it can enable them to devise the necessary policy for the
Gebreguracha Micro-finance institution. The study will be useful in light the strong and weak
point in current asset management of Gebreguracha Micro-finance. The study will be initiating
future research in the area for further study. In addition the study believes that the study may be
helpful in Ethiopia context and Gebreguracha Micro-finance in particular.

1.5 Scope of the study

The study will focus on the assessment of current asset management of north shoa Micro-finance
in Gebreguracha branch and the study more focus on assessment of cash management practice of
the institutions. Therefore, the result of this study represents only this branch.

3
1.6Limitation of the study
Limitation of the study is that the time factor that is given to perform this proposal is too short
and also lack of finance is another problem that faces me while I do this proposal.

1.7 Organization of the paper

This paper intended to have four chapters. The first chapter provide introduction with its
background of the study, statement of the problem, objective of the study and limitations of the
study .The second chapter deals with review of literature, the third chapter will provide research
design and methodology and the fourth chapter deals with budget and time schedule.

4
CHAPTER TWO

2. Literature Review
The objective of this chapter will be to review exist the current asset managing literature on the
subjects of current asset management among Gebreguracha Micro- finance institutions. The
study looks at the concept and definition of current asset management’s, short term loan
management, and marketable securities. The study reviewed the literature on agreement practices
of Gebreguracha Micro-finance institution. Furthermore it also reviewed the literature on
Gebreguracha Micro- finance cash management, loan management and marketable security
management.

2.1 Theoretical Review

It presents the theory that provides the foundation for the report.
It provides conceptual literature concerning the concept and theories.

2.2 Current assets

Current asset are those assets which can be converted in to cash with in accounting year and
include cash, short term securities, debtors and short term loan. They are cash and other assets
that may reasonably be expected to realize in cash or sold or used up usually one year or less,
through the normal operation of the business. In addition to cash they usually owned by a service
business are short term loan and other prepaid expense(Brigham1995)

If a company is getting in to financial difficulty it begin paying in to bills more slowly,

borrowing from its bank and so on. If current ratio would fall and this could spell trouble.
Because the current ratio provides the best single indicators of the extent to which the claim of
short term creditors are expected to be converted to cash fairly quickly it is the most commonly
used measure of short term solvency(Pandey 2005)

2.3 Cash management

Cash is the important current asset for the operating of the business; cash is the basic input
needed to keep the business running on continues basis is also the ultimate output expected to

5
realize by selling the service or product manufactured by the firm. The firm should keep
sufficient cash, neither more or less; cash shortage would be disrupts the firm’s manufacturing
operation which excessive cash may supply remain idle, without contributing anything towards
the firm’s profitability. Cash is the money which a firm can disburse immediately with any
restriction (Prof.P.N .Abrol2006)

Generally when a firm has excess cash it invests it in marketable securities; this kind of
investment contributes some profit to the firm. Cash managements means the management of
cash balance of on enterprise in such a fashion as to maximize the availability of cash and
investments income of cash not invested in fixed asset or investors and also so as avoid that risk
of insolvency (Pandey2005)

2.4 Objective of cash managements

To meet cash disbursements needs of the firm on a continues and regular basis, To minimize
funds in the form of cash balance which remain idle, To prevent bankruptcy, To meet
unexpected cash expenditure, Good relation with Gebreguracha Micro-finance and to maintain
balance level.

2.5 Aspects of cash management

Cash management is concerned with the managing of (i) cash flow in to and out of the firm (ii)
cash flows within the firm and (iii)cash balance held by the firm at a point of time by financing
deficit or investing surplus cash has to be invested while deficit has to be borrowed(Pandey
2005)
Cash management seeks to accomplish this cycle at a minimum cost sometime it also seek to
achieve liquidity and control. Cash management assumes more importance than other current
asset because cash is the most significant and the most product asset that a firm holds. It also
involves control over the receipt and payment of cash so as to minimize non earning cash
balance (Pandey 2005 and Block 1997)
The institution involves strategies regarding the following four facts of cash managements.
Cash planning: cash inflows and outflows should be planned to projects cash surplus or deficit
for each period of the planning period cash budget should prepared for this purpose. Managing
cash flows: the flows of cash should be properly managed. The cash inflows should be
accelerated while as far as possible, the cash out flows should be decelerated. Optimum cash

6
level: the firm should decide about the appropriate level of cash balances and Investing surplus
cash: the surplus cash balance should be properly invested to earn profit.

2.6 Importance of cash management

To maintain adequate cash balance, Helps in identifying surplus cash and investing them in
marketable securities, Helps in identifying the points of short falls and to plan and arrange
adequate cash, Improves the profitability of the Gebreguracha Micro-finance and to take
advantage of speculative opportunities.

2.7Motive for holding cash

The institution need to hold cash may be attributed to the following three motives; the
transactions motives, the precautionary motives and the speculative motives.

The transaction motives: requires the institutions to hold cash to conducts its business in the
ordinary course. The institutions need cash primarily to makes payments to wages, salaries, other
operating expense and taxes dividend etc

Precautionary motives: is the needed to hold cash to meet contingencies in future. It provides a
cushions or buffer to with stand some unexpected emergency. The precautionary cash is also
influenced by the firm ability to borrow at short notice when they rise.

Speculative motives: relates to the holding of cash for investing in profit making opportunities
and when they (Pandey 2005)

2.8 Cash management techniques

Cash management is an all-inclusive term that relates to the accumulation, concentration and
outlay of cash. Effective cash management techniques are essential to survival of any business.
The objectives of these techniques are to control the Gebreguracha Micro-finance cash balance
so as to maximize the accessibility of cash hand. The Gebreguracha Micro-finance institution
offers a wide range of these methods to help large and small business simply their cash
management process. Effective cash management encompasses proper managements of both the
flows and the clearing process.
Cash clearing process: The situations in which inflows coincide with outflows, thereby
permitting affirm to hold low transaction balance.

7
Check clearing process: The process of converting a check that has been written and mailed in to
cash in the payee’s account.
Using float: float is defined as the difference between the balances in the firm check book the
balance on the bank’s records.
Acceleration of receipts: A financial managers have searched for ways to collects receivable
faster since credit transaction began (Briham.1995).

2.8.1 The concept of loan

Loan is a type of debt like other instrument and which initials the redistribution asset over time
between the lender and borrower. It can be also expressed as the contract done between the two
parties. Those are borrower and lender. On the other hand it also the amount of money advanced
parties of arranged agreement between the buyer and seller, enforceable under the uniform
commercial code in the most states. The term and the condition are specified in the agreement
(Haddock 2003)

Generally loan is a certain amount of money lent to specified person, borrower to expend it for
different purpose usually business activities and for the purpose of expending its organization
internally and externally within a short period of time and to satisfy the need and the want of its
customer properly. Furthermore loans are advanced not jest for financing trade and industries,
but also to government unit as well as to customers for arrange of personal product like housing,
automobile, educations etc.

2.8.2 Loan management

Loan management refers to the method of controlling the loan that is given to certain business
organization or individual for short term, midterm or short term. It is also the means for lending
business organization to get or to pay money lend to the organization individual that lend loan
for the purpose of completing various business activities by developing their financial capacity.
Loan management is a very a broad field for getting, risk management, which include assessment
of various types of current asset and passion at securing the interest of the lender easily and
market the lender confidential in getting his money that he lent. This is mainly important to
institutions and other financial organization to scope from binge affected by risk or bankruptcy
due to lending. Active loan management of loan and deposit is consist with its goal for long

8
term growth and risk managements of the institution in normal course of things assume financial
risk making the institutions difficult to survive. Hence loan management is very important
concept for all financial organization to control and manipulate the loan that helps to business
organization or individuals in different period of time (David 2004 and Haddock 2003)

2.8.3 Objective of loan management

The objective of loan is management to save financial organization specially, which lender some
amount of loan to business organization or individual binge damaged financially due to the
organization or individual failure or repaying the loan that they take from that financial
organization for a certain period of time. The aim of loan management is to protect the lending
organization from binge the victim of risk of the expansion of financing the organization by
protecting their interest relation to the lending of money.

It does mean that lending organization can to the market of lending. Where there interest is
bitterly safeguard loan management techniques.

2.8.4 Marketable Securities

Marketable securities that can be sold on short notice realistically the managements of cash and
marketable securities cannot be separated. In many cases, companies hold cash although this
security are not liquid as cash, in most cases they can be converted to cash in very short period of
time just few minutes with a single telephone call (Pandey 2005)

2.9Type of Marketable Security

Treasury bills: are shorter government securities. It is short term obligation of the federal
government and are popular to “park fund” because of large aid active market. Although those
securities are originally with maturely 91 days, 182 days and one year the investor may buy an
outstanding treasury bills with as one day remaining perhaps, to prior investor have held it for 45
day search.

Treasury note: It is government obligation with majority 1 to 10 years and they may purchase
with short to intermediate term fund.

Commercial paper: are short term unsecured securities issued by highly credit worthy large
company. Certificate of deposits: are paper issued by Gebreguracha Micro- finance
acknowledging fixed deposit for specified period of time.Inter corporate deposit: Is popular

9
short term investment alternative. Money market mutual fund: Focus on short term marketable
securities.

2.9.1 Policies for financing current asset

A firm can adopt different policies vis-à-vis current asset. Three types of financing may be
distinguished.
Long term financing: The source of long term financing includes ordinary share capital,
preference share capital, debenture, long term borrowings from financial institution and reserve
and surplus (retained earnings).
Short term financing: the short term financing is obtained for a period less than one year, it is
arranged in advance from institutions and other suppliers of short term finance in the money
market. Short term finances include working capital funds from institutions, public deposits,
commercial paper, etc.
Spontaneous financing: Spontaneous refers to the automatic source of short term funds arising
in the normal course of business. Trade (suppliers) credit and outstanding expenses are examples
of spontaneous financing. There is no explicit cost of spontaneous financing. A firm is expected
to utilize these sources of finances to the fullest extent. The real choice of financing current asset
once the spontaneous sources of financing have been fully utilized is between the long term and
short term sources of finance. What should be the mix of short and long term sources is financing
current asset.

2.9.2 Empirical Review

TIZAZU LEMA (2005) According to this study the most important item found in the current
asset section either are cash and cash equivalent, marketable securities and short term loan. Then
he reaches on conclusions that one of the major effects of financial institution is improper
managements of a current asset which was greater impact for the survival of company because of
problem, loss of profit, unable to fulfill customer demand and fear to survive.
ZELEKE PHILIPOS (2008) According to this study to improve the working of financial
institution especially to Gebreguracha Micro-finance to introduce new activities or opportunity
to the organization current asset management is very important so in to survive and fulfilled
objective and obligation financial institutions must manage the current asset properly.
SHEWALUL ASEFA (2007) According to this study under the current asset management loan
management is one of the most important parts of working capital of Gebreguracha Micro-

10
finance institutions and the most important for the success of the other organization to achieve
their goal and objectives.
DANIEL HANJARA(2007) According to these study current asset management is the handling
of the current asset of institutions and asset that institution or business has that is the equivalent
of cash or be liquidated in to cash in the period of a year is considered a current asset

2.9.3 Conclusion and knowledge gap

The study understood that assessment of current asset management practice is worth to change
poor current asset management of the study area. A comparative study is an endeavor which be
considered as the life blood of a business concern .Its capable management can leads to the
objectives of the business, where as its unproductive managements can result not only in loss of
returns but also in financial collapse of what otherwise might be considered as profitable helps in
maintaining the solvency goodwill, liquidity and profitability. It also facilitate availing cash
discounts, loan advance on favorable terms, regular payment of salaries, wages and other day to
day liability creating capability to encounter crisis environment of safety assurance and high
spirits and improves the overall effectiveness of the company. As result a proper management of
current asset is decisive for the accomplishment of the goal of the organization. In the light of the
significance of Gebreguracha Micro-finance institution and the challenges faced by it and the
importance of current asset management it can be rightly concluded that sound go along way
serving the Gebreguracha Micro-finance institution by turning the challenges in to opportunity
and face uncertainties with confidence.

11
CHAPTER THREE

3. RESEARCH METHODOLOGY
This chapter concerned with methodology of the study or the research proposal. Research
methodology is the process used to collect information data for the purpose of making decision.
Research methodology also describes the technical procedure that followed in the conduct of the
study.

3.1 Description of the study

This research will be conduct in Gebre Guracha woreda in north shoa zone. Gebre Guracha is a
town which is north of Ethiopia located in Oromia region. This town is located around 156 kms
far from Addis Ababa to the North direction which found at latitude and longitude of 7 7N 40
O.E with an elevation of 2492 meters (8176) above sea level. The 2007 national census reported
a total population for Gebre Guracha of 44,382 of whom 22,543 were men and 21,839 were
women. The majority of the inhabitants are Christians, with orthodox followers 48.08% of the
population. Which 45.02% of the population, Were followers of Ethiopian protestant and
16.13% were Muslim (CSA 2007).

3.2 Research design

The research design through which the study would be conducted both qualitative and
quantitative design. Qualitative design is one of important term that covers a variety of social
research. The qualitative research is the development of concept with helps us to understand
social phenomena in natural rather than experimental setting. It give due emphasis to the
meaning, experiences and view of all participants (pope and Mays 1995).

Quantitative design is focus on groups with depth interview and survey structure interview,
questionnaires and explaining phenomena by collecting numerical data that are analyzed used by
mathematically based method (in particular statistics).It also seeks to answer questions about

12
why and how people behave in the way that they do. It provides in depth information about
human behavior. It is non-statistical (Boston, MA: Longman; mcNabbDavidE (2011) and
Kothari CR (2004). Beside, qualitative and quantitative data type to determine the correct data
and both qualitative and quantitative data have more attention in this research paper because to
gather clear and precise information. Particularly qualitative data is very essential to be
conducted the descriptive method that describes the quality of the institution and identifying the
quality of the problem during the study. Therefore the study will use both qualitative and
quantitative method to makes more reparable to collect necessary data.

3.3 Target population

The target population of the study is twenty (20) employees of the institution which includes
accountant, manager, cashier and operating officer (the loan managers) and janitor. The study
includes all employees of the institutions.

3.4 Sampling Technique

The study will apply census method in order to include all of the target population in the study.
As the study selected census method all the number of the target population will be included in
the study. The reason is that census is used no elements of chance is left from the employees of
Gebreguracha Micro-finance institutions highest, accuracy and detailed information is obtained.

3.5 Source of data and method of data collections

The source of data that used in the study would be primary and secondary source of data.
Primary data will be collected to get the first hand information that can be relevant to arrive at
proper decision and it will be collected through interview with manager of the Gebreguracha
Micro- finance institution and distributing questionnaires that leads the researcher to get relevant
information. The instrument for primary data collection of this study is both close and open
ended questionnaires and interview with manager of the institution because of the obtain full,
detail and accurate information from the employees and manager of the institution. It is also
important to get information that improves the quality of the study. Secondary source of data will
be collected to get the second hand information from published material like, journal, magazine,
balance sheet, ledger etc.

13
3.6 Data analysis and presentation
Data presentation is an activity which involves interpretation to make data appropriate for analysis. The
collected data will be analyzed through tabular, percentage and time by evaluating the trend whether it
shows improvement or not. Comparing and investigating the relation between pieces of financial
information and comparing the collected data with the literature is another way of analysis.

Chapter four
Budget and time plan
4. Time schedule
Activities Nov Dec Jan Feb Mar Apr May

1 Title selection xx

2 Consultation xx Xx Xx Xx xx Xx Xx

3 Literature review Xx

4 Preparation of the Xx Xx
proposal

5 Data collection Xx

6 Data analysis and Xx xx

report

7 Report submission Xx

8 Presentation Xx

4.1. Financial budget

S.No Description Duration in Unit Quantity Unit cost Total cost
ways

14
 1 Personal expenditure

- Daily expense 10 Day 15.00 150.00

- Transportation 140.00 I40.00

2 service

- Secretary 200.00 200.00

- Binding 6 6.00 36.00

3 Stationary material

- Paper 1 90.00 90.00

- pen 6 3.50 21.00

- Floppy disk 2 7.50 15.00

- Photo copy 40 0.5 20.00

Miscellaneous 70.00

Total cost 742.00

References
Eugene F Brigham（1995) fundamental of financial management (5theditions).Published by haro
court school and quantitative research methods (8th edition)

Fees and warren (1998) Accounting principle (3rd edition)

I,Mpandey(2005) financial management(5th edition)

Brigham f.f (1995) financial management (7th edition): to illustrates major finance concept.

Fees and warren (1990) accounting principles Revised (16 th edition) Cincinnati: western
publishing.

15
Blanket (1996) fundamental of management finance (2ndedition)

Ross s. a, (2000) fundamentals and corporate finance (4th edition)

Prof.P.N.Abrol (2006). Dictionary of Accounting, New Delhi: Anmol Publications

PVT.LTD

Kothari (2004) research methodology: methods and techniques (2nd edition) new age
international publications-Dharma’s printer Delhi

Haddock (2003) collage accounting McGraw hill India.

APPENDIX

MADDAWALABU UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

16
 DEPARTEMENT OF ACCOUNTING AND FINANCE

Questionnaires on the assessment of current asset management practice of Micro Finance in case
of Gebre Guracha branch. Dear respondents I will like to thank in advance of your institution in
filling this questionnaires. Please don’t refrain from providing the existing reality ፣ because all
gathered data will be confidential and will be used for academic purpose only.

Thank you in advance

General instruction

No need of writing your name

Put ( ) on the space provided

Please give brief answers for the questions

Part I: Personal Information

• Level of education

Certificate Diploma Degree Master Other

• Work experience

Below one year 1-2 3-5 3-7

above

• Specialization

Accountant Economics Marketing Management

Other

Part II: Question related to cash management policy of the institutions

17
1. What types of recording system of transaction institution uses?

Double entry Single entry

2. What are cash management policies in your institution?

______________________________________________________________________________
______________________________________________________________________________
______________________________

3. How do you rank your institution cash management policy?

Very high High Medium Low

4. What are methods used to control cash collection and payment?

By authorizing every single document/ payment before and after cash is paid.

By authorizing every single document /payment before and after cash is received

By making agreement against ticket receipt and voucher at the time of cash collection

By depositing the collected cash in box and registering on the cash register

If other methods

5. What are source of the cash budget to your institution?

Interest charged on borrowers

Saving or deposit by customers

Penalty

Other specify

6. What are the institution necessary conditions or considerations to prepare cash budget?

Political situation of the country

The economic condition of the institution

18
 The available on the hand

Forest of demand in the future

If any other considerations specify

Part III: Question related to short term loan management systems

1. What are types of loan service provided by your institution?

Construction loan

Service loan

Manufacturing loan

Petty trading loan

Urban agriculture loan

Other specify

2. How do you rank your institution short term loan management?

Very high High Medium Low

3. How often do you visit the customer’s progress?

Weekly Monthly Quarterly Yearly

4. How do you visit the customer’s progress?

By phone

By going on the field

On both

5. What are the problems that institution face to collect loan?

Customers they do not ability to pay the liability

Low repayment periodically or on time

19
 Other specify

Part IV: Question related to advisory service of institutions

1. Does the institutions provide advisory service to its customer?
Strongly agree agree Neutral Disagree
2. for what purpose your institutions provides advisory service to its customer?
............................................................................................................................
............................................................................................
Part V: Question related to cash investment policy of the institutions
1. Do you have cash investment policy in your institution?
Agree Disagree Neutral

2. If the answer for question number “1” is disagree why?

……………………………………………………………..
……………………………………………
3. How do you rank your institutions cash investment policy?

High Medium Low

4. What criteria the institutions consider to invest its cash?

Maturity liquidity profitability other

20
 MADDAWALABU UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF ACCOUNTING AND FINANCE

Interview questions to be answered by the management of the institution (Gebre Guracha
branch).Thank you in advance for your willingness to answer these interviews. The purpose of
this interview is for academic affairs only and the information would keep in secured ways. So
please try to answer the question in detail way.

1. Does the institution its float? When, How?

2. What are the factors that affect cash management?
3. What are the methods of credit delivery of the institutions?
4. Does the institution have auditor to control its cash?

THANK YOU!

21