European Journal of Economics, Finance and Administrative Sciences

ISSN 1450-2275 Issue 12 (2008)

© EuroJournals, Inc. 2008
http://www.eurojournalsn.com

Budget and Budgetary Control for Improved Performance: A

Consideration for Selected Food and Beverages
Companies in Nigeria

Ishola Rufus Akintoye

Room 116, Department of Economics, Faculty of the Social Sciences
University of Ibadan, Oyo State, Nigeria, West Africa
Tel: 234-8035369293, 8082130269
E-mail: irakintoye@yahoo.com

Abstract
Budget and Budgetary control, both at management and operational level looks at the
future and lays down what has to be achieved. Control checks whether or not the plans are
realized, and puts into effect corrective measures where deviation or shortfall is occurring.
This study examines how budget and budgetary control can impact on the performance of
the selected food and beverages companies in Nigeria, as considered in this study, being a
sample of the entire population of the firms in the Nigerian Manufacturing Industry.
We reviewed the performance of the Nigeria manufacturing industry in previous
and recent times. We found out that the performance of this industry leaves much to be
desired due to factors such as neglect of the industry due to over dependence on crude oil,
epileptic power supply, collapsing infrastructures, unfavourable sectoral reforming among
others and have resulted in low capacity utilization of the manufacturing industry.
An empirical investigation was undertaken, using the simple correlation analytics
technique specifically the Pearson product movement correlation coefficient. In most of he
cases considered, established the presence of strong relationship between turnover as a
variable of budget and performance indicators – EPS, DPS and NAS, of the selected food
and beverages companies. Following our findings, we advise managers and business
operators (not only in the manufacturing industry) to pay more attention to their budgetary
control systems, for those without an existing budgetary control system, they should put
one in place, and those with a dummy or passive budgetary control system, it is time they
re-established a result-oriented budgetary control system as it goes a long way in
repositioning the manufacturing industry from its creeping performance level to an
improved high capacity utilization point.

Introduction
Following the uncertainties prevailing in the Nigerian business environment today, managers and
stakeholders must be poised and prepared to compete favorably under these rapidly shifting conditions.
Inorder to survive under these environmental complexities and vagueness managers and stakeholders
of the manufacturing sector need sharp tools, proven management techniques to forecast the major
changes which are likely to affect the business while they choose future direction and dimension of
resources needed to attain selected goals.
Budgetary control as proven management tool (Chandler, 1990) helps organization
management, and enhances improved performance of any economy in different ways. Its primary
8 European Journal of Economics, Finance And Administrative Sciences - Issue 12 (2008)
function is to serve as a guide in financial planning operators, it also establishes limits for departmental
excesses. It helps administrative officials to make careful analysis of all existing operations, thereby
justifying expanding, eliminating or restricting present practice. (Musselman and Hughes 1981).
Budgeting and control entails a distinct pattern of decisions in an organization which is capable
of determining its objectives, purposes or goals, and how these goals are achieved by establishing
principal policies and plans. However, the inability to recognize the problem concerned and fixing a
boundary off investigation creates an obstacle for the successful implementation of budgeting and
control. Some organizations only look for narrow ranges of alternatives which they arrive at from their
past expenses and present situation, other management levels even avoid long-term planning and
budgeting in favor of today’s problems thereby making the problems of tomorrow more severe
(Steward 1993). The foregoing reflects on the need for organizations to set up a formal mechanism for
scanning its environment for opportunities and give early signs of future problems, this course of
action will improve the system of budgeting and control, resulting in an apriori expectation of
improved performance, in the manufacturing sector as seen in this study.

Literature Review and Theoretical Framework

“Budget” and “Budgeting” are concepts traceable to the bible days, precisely the days of Joseph in
Egypt. It was reported that “nothing was given out of the treasure without a written order”. History has
it that Joseph budgeted and stored grains which lasted the Egyptians throughout the seven years of
famine.
Budgets were first introduced in the 1920s as a tool to manage costs and cashflows in large
industrial organizations. Johnson (1996) states that it was during the 1960s that companies began to use
budgets to dictate what people needed to do. In the 1970s performance improvement was based on
meeting financial targets rather than effectiveness companies then faced problems in the 1980s and
1990s when they were not willing to spend money on innovations inorder to stay with the rigid
budgets, they were no longer concerned about how customers were being treated, only meeting sales
targets became essential.
Budgeting in business organizations are formally associated with the advent of industrial
capitalism for the industrial revolution of the eighteenth century, which presented a challenge for
industrial management.
Glautier and Under (1987) state that “the emergence of scientific management philosophy with
its emphasis on detailed info’ as a basis for taking decision provided a tremendous impetus for the
development of management accounting and indeed budgeting techniques”.
However, budgeting at the early stage of its development was concerned with preparing and
presenting credible information to legitimize accountability and to permit correct performance
evaluation and consequently, rewards.
Over the years, the function and focus of budgeting has shifted considerably and business
organization become more complex and their environment becomes dynamic coupled with the
emergence trend, the term budget and budgeting have been differently defined and examined by
various scholars in several ways.
Omolehinwa (1989) defined a budget as a plan of dominant individuals in an organization
expressed in monetary terms and subject to the constraints imposed by the participants and the
environments, indicating how the available resources may be utilized, to achieve whatever the
dominant individuals agreed to be the organisation’s priorities. The impressive thing about this
definition is that, it recognizes the constraint imposed on budget by other participants who are to
ensure that the objectives and targets enunciated in the budget are achieved.
Pandey (2003) defines budget as a short term financial plan. It is an action plan to guide
managers in achieving the objectives of the firm. Lucey (20030 in his formal definition, defines budget
as “a qualitative statement, for a defined period of time, which may include planned revenue, expenses,
assets, liabilities and cashflows. A budget provides a focus for the organization, aids the co-ordination
9 European Journal of Economics, Finance And Administrative Sciences - Issue 12 (2008)
of activities and facilitates control whereas control is generally exercised through the comparison of
actual costs with a flexible budget”.
Lucey (2003) in his recent definition of budget defines it as “a quantitative expression of a plan
of action prepared for the business as a whole for departments, for functions such as sales and
production or for financial resource items such as cash, capital expenditure, manpower purchase, etc.
The process of preparing and agreeing budgets is a means of translating the overall objectives of the
organization into detailed, feasible plans of action” Welsh (2003) opines that budgeting is the only
comprehensive approach to managing so far developed that, if utilized with sophistication and good
judgement fully recognizes the dominant role of the manager and provides a framework for
implementing such fundamental aspects of scientific management as management by objectives,
effective communication, participative management, dynamic control, continuous feedback,
responsibility accounting management by exception and management flexibility.
The Tennessee board of Regents (2006) defines budgeting as the process whereby the plans of
an institutions are translated into an itemized, authorized and systematic plan of operation, expressed in
dollars for a given period.
Budgeting, at both management level and operation level looks at the future and lays down
what has to be achieved. Control checks whether the plans are being realized and put into effect
corrective measures, where deviation or short-fall is occurring (Egan, 1997). Egan emphasized that
without effective controls, an enterprise will be at the mercy of internal and external forces who can
disrupt its efficiency, and be unaware, such enterprise will not be able to combat such forces. When a
budgeting and control system is in use, budgets are established which set out in financial terms, the
responsibility of managers in relation to the requirement of the overall policy of the company.
Continuous comparison is made between the actual and budgeted results, which is intended to either
secure, thorough action of managers, the objectives of policy or to even provide a basis for policy
revision.
Morgan (1997) opines that the budget had grown beyond a financial tool. It is above all
managerial tool, in essence, it is the best tool for making sure that key resources, especially
performance resource are assigned to priorities and to results. It is a tool that enables the manager to
know when to review and revise plans, either because results are different from expectation or due to
environmental, economic conditions, market conditions or technologies change, which no longer
correspond to the assumptions of the budget. Morgan emphasized that budgets should be used as a tool
for planning and control. According to Hudson and Andrew (1996), control involves the making of
decisions based on relevant information which leads to plans and actions that improve the utilization of
the productive assets and services available to organizations management. Effective control is said to
be based on standards with which actual performance can be compared. If there are no standards, then
there can be no effective measure of attainment. Hudson and Andrew identified and elaborated on five
categories into which standards fall, they are: quantity, quality, time, complaint and value.
Effective control is a key management task which ensures that efforts produced at all levels are
commensurate with those required to ensure the long-term future effectiveness and success of the
organization (Stewart, 1997).

Budgeting: Financial and Human resources

According to McBain, budgeting is not a substitute for effective decision making. Most budgets
provide only for finances and specify where and how it should be spent, they do not provide for people
(Mcbain, 1999). People think, perform, have competence, need finances to be sure, however without
the people, finance alone is insufficient in arriving at an improved performance of any organization. In
essence managers should also look into human resource budgeting and see how improvement in this
results in better performance.
In addition to being the managers’ planning tool, budgeting is also one of the most effective
tool of communication and integration. It shows how each part of the organization relates to the end
and needs of the whole. Budgeting therefore requires that the manager in charge of the whole and each
10 European Journal of Economics, Finance And Administrative Sciences - Issue 12 (2008)
person in charge of parts discuss the budget jointly inorder to arrive at better result (Adedeji, A.O.
2004).

Problems associated with budgeting and control

Having reviewed the concepts “Budget” “budgeting” and “control” which are key to this study, stating
their purpose and importance, there is need to consider some of the problems that are associated with
these concepts, so that organizations who seek to survive in the complex economic environment will be
familiar with these likely problems and apply necessary tools in by-passing them so as to experience
improvement in the organizations performance.
To remain competitive, companies need to align their budgetary planning and control systems
with the overall strategy. The following questions confront all top level managers, as they formulate
budgetary plans and allocate capital; which is better for a firm? Investing outrageous amount of capital,
or scale back on capital investment? To reduce employment so as to raise the amount of assets at work
per employee or elevate employment to meet the demands created by new investments? These
questions become more compelling as investors demand that corporations consistently deliver
shareholders value regardless of their long-term strategy for deploying human and financial capital. An
important factor that distinguishes the winners from the losers in creating shareholder value is the
equality in investment decisions, which in turn depends on the soundness of such budgetary planning
and control system (Thaker, 1998).
Unfortunately, many organizations make poor investment decisions from investing too little in
positive NPV (Net Present Value) projects and much in negative NPV projects, resulting in investment
myopia. Thaker, noted that such distortions can distract companies from what they ought to do, causing
them to sink million of dollars in wrong products and ideas. For instance, coca-cola invested in pastes
and wine, products for which its rate of return were not only below those of its soft drinks business, but
also below its costs of capital. Such errors deplete shareholders value and lead to corporate control
contests that results in chief executive officer replacements and hostile takeovers.
Boquist (1998) observed that companies continue to blunder and fail because they have flawed
budgetary planning and control systems, which they apparently fail to recognize. Some firms sense
weakness of their budgetary analysis but viewed them as individual problems rather than systematic
deficiencies. They misdirect efforts and produce greater frustration. As a result, corporate strategy and
capital allocation become misaligned and remain so, despite disapproving financial performance.
Boquist pointed out some of the drawbacks organizations encounter in the course of implementing
budgetary planning and control systems. They include:

(a) Lack of dynamic structure

Present day economic environment demands that organization adapt new and instructure practices.
Given the new competitive realities, there is need for management of embrace flexible and adaptable
budgetary planning and control system which has the ability to quickly respond to environmental
changes and complexities. A good budgetary planning and control system must involve not only an
analysis of capital allocation requests when the project is executed, but also an analysis of all the
capital needed to generate information such as market research, prior to investing in the project.

(b) Absence of connection between compensation and financial measures

Many companies adopt the NPV criterion in selecting a project but compensate managers based on
product earnings or rate of returns. This misaligns their interest with those of shareholders. The reason
for misalignment between compensation and budgetary allocation system is that the NPV cannot be
used to determine compensation because it (NPV) is a stock/summary measure, based on projected
cash flows and not on realized performance. Organisations are expected to adopt flow measures which
are computed periodically, either quarterly or yearly as soon as they are realized.
11 European Journal of Economics, Finance And Administrative Sciences - Issue 12 (2008)
(c) Lack of Integration
Most often, capital budgeting and expense budgeting are distinct processes for instance organizations
that do practice capital budgeting make assumptions about future cashflows that are dependent on
certain advertising and sales promotion outlays. However, these outlays are typically covered by the
expense budget. Boquist noted that even in organizations in which the determination of the expense
request is tied at the outset of capital request, the people approving the two requests do not necessarily
try to ensure consistency between the two budgets.

(d) Finance function not a strategic partner

Financial analysts doing budgetary planning are often seen as traffic caps than strategic partners. They
often get into the budgetary process near the end, merely to rubber-stamp a conclusion that a marketing
or manufacturing executive realized earlier. Budgetary planning then becomes a mere exercise, rather
than values that produced the desired result, consequently, the quality of information for budgetary
planning and control is seriously compromised.

(e) Poorly trained financial professionals

In recent time, training outlays are typically treated as expenses rather than investments (Hope and
Frazer, 2003). If the most sophisticated budgetary planning and control system is put in place, absence
of the necessary investment in upgrading those involved in budgeting, will only result in expecting to
win a battle by sending in people with unfamiliar guns, which all together amount to total failure of
such budgeting system (Adedeji, 2004).

Performance of the Nigerian manufacturing industry: General Overview

The Nigerian manufacturing industry is relatively small compared to its foreign counterparts. Between
1970 and 1990 it contributed an average of 8 percent to the GDP. The sector as a whole has not grown
remarkably over the years due to factors such as; dummy budgetary control, neglect of the sector from
over dependence on crude oil, epileptic power supply, collapsing infrastructures, among others. It
employs about 1 percent of labour force (Sonola, 2004). Although the Nigerian Government maintains
that the industry is the main instrument of rapid growth, structural change, and self sufficiency, it had
however unwillingly pursued policies which had impaired the performance of same industry.
Available data shows that the contribution of the industry to the GDP in 1981 stood at 9.89 and
11.20 in 1982 but fell gradually to 7.82 percent in 1984.The share of 8.57 and 8.04 was maintained in
1985 and 1986 respectively. Between 1987 and 1993 the percentage share of manufacturing industry to
the GDP hovered around 8.0 percent. On the average, the percentage contribution during the period
stood at 8.40 percent. Considering the growth rate of the sector, negative growth rates were recorded in
1983, 1984, and 1986. In 1982 a growth rate of 11.40 percent was recorded. In 1985, the rate was
16.55 percent between 1987 and 1993 the growth rate fluctuated between 1.62 and 11.39 percent
during same period(Onwioduokit and Nwachukwu,1998)
In 1994 and 2000, the growth rate also increased to 7.21 and 5.92 percent respectively, between
2001 and 2002 the manufacturing sector growth rate fluctuate to 5.92 and 6.08 percent. From the data
available, the performance of the industry leaves much to be desired, but as this study progresses in
establishing the relationship or otherwise between budget and performance of the selected food and
beverages companies which are sample of the manufacturing sector) we hope to advice for or against
the impact of the budgetary control system on performance of the sector from our findings and results.

Methodology
The method of analysis for this study is the use of simple correlation analytical technique specifically
the Pearson Product Movement Correlation co-efficient which is computed to establish a relationship
between budgetary and control and performance of the five selected food and beverage companies in
Nigeria. We shall make use of secondary data precisely financial statement, of these companies, The
12 European Journal of Economics, Finance And Administrative Sciences - Issue 12 (2008)
Nigeria Stock Exchange fact book, textbooks among others using turnover as the budget variable and
earnings per share (EPS), dividends per share (DPS), Net Asset per share (NAS) as performance,
indicators.
The selected companies are: Cadbury Nigeria Plc, Flourmills Nig Plc, Nestle Nig Plc, Nigerian
Bottling company Plc, 7up bottling Company Plc.
It is important to state here that the budget variable is the independent variable (X) while
performance indicators are the dependent variable represented by y.
The Pearson Product Movement Correlation Co-efficient PPMC is represented below as:
√nεxy - εx εy
r=
Vn εx2 – (εx) 2 (nεy2 – (εy) 2
To test for its significance we use:
rVn-2 Decision criteria, where tc < tx, accept Ho, reject H1
t=
V1 – r2
To interpret r, Oyesiku (1995) came up with the rough idea equivalent stated below:
When r > 0.70 = very strong relationship
0.50 ≤ r < 0.70 = strong relationship
0.20 ≤ r ≤ 0.50 = moderate relationship
0.10 ≤ r < 0.20 = weak relationship
r < 0.10 = none or negative relationship
For the purpose of this study, we restate our hypothesis:
Ho: There is no relationship between budget and performance of the selected food and
beverages companies considered in our study.
H1: There is relationship between the budget and performance of the selected food and
beverages companies considered in our study.

Data Presentation and Analysis

The data utilized for this study consists of turnover as the budget variable, while the performance
indicators for each of the companies are Earnings per share, Dividend per share and Net asset per
share. We simply calculated the percentage change (% Δ) in Turnover between budget and actual
figures to justify the efficiency of control and same to performance indicators. The table containing
these data are presented below for each of the companies under consideration for a clearer
understanding.
13 European Journal of Economics, Finance And Administrative Sciences - Issue 12 (2008)
Table 1: Cadbury Nigeria Plc

Years X (% Δ Turnover) Y(% Δ performance) XY X2 Y2

EPS
01 30 56 1680 900 3136
02 21 36 756 441 1296
03 28 19 532 784 361
04 8 5 40 64 25
Ex = 87 Ey = 116 Exy = 3008 Ex2 = 2189 Ey2 = 4818
01 30 DPS 1980 900 4356
66
02 21 17 357 441 289
03 28 17 476 784 284
04 8 22 176 64 484
Ex = 87 Ey = 122 Exy = 2989 Ex2 = 2189 Ey2 = 5418
01 30 NAS 780 900 676
26
02 21 107 2247 441 11449
03 28 20 560 784 400
04 8 15 120 64 225
Ex = 87 Ey = 168 Exy = 3707 Ex2 = 2189 Ey2=12750

n Exy - Ex Ey
Turnover, EPS =
nEx2 – (Ex) 2 (nEy2 – (Ey) 2
4(3008 - (87 x 116)
=
4(2189 – (87) 2 (4(4818 – (116) 2
4(3008) – 10092)
=
4(2189) – 7569) (19272 – 13456)
1940
= = 1940
1187 (5816) 2627.5
r t,Eps
= 0.74
Since r >0.70, the relationship between turnover as a budget variable and EPS as performance
indicator is VERY STRONG.
rt, DPS = 4(2989) – 10614
4 (2189) – 7569) 4(5418) – 14884
1342 1342
= =
1187 (6788) 8057356
1342
=
2839
rt,DPS
= 0.47
from the above r 0.≤50 shows that there a STRONG RELATIONSHP between turnover and DPS.
4(3707) – 14616
Rt, NAS =
4(2189) – 7569) (4(12750) – 28224
212 212
= =
1187 (22776) 5200
r = 0.04
14 European Journal of Economics, Finance And Administrative Sciences - Issue 12 (2008)
:. From the above r t,NAS < 0.10, therefore we conclude that there is no relationship between
turnover and NAS.

Table 2: 7up Bottling Company Plc

Years X (% Δ Turnover) Y(% Δ performance) XY X2 Y2

EPS
2001 18 432 324 576
24
2002 20 5 100 400 25
2003 46 19 874 2116 361
2004 20 20 400 400 400
Ex = 87 Ey = 68 Exy = 1806 Ex2 = 3240 Ey2 = 1362
DPS
2001 18 280 324 196
14
2002 20 25 500 400 625
2003 46 50 2300 2116 2500
2004 20 25 500 400 625
Ex = 104 Ey = 114 Exy = 3580 Ex2 = 3240 Ey2 = 3946
NAS
2001 18 432 324 576
24
2002 20 2 40 400 4
2003 46 72 3310 2116 5184
2004 20 50 1000 400 2500
Ex = 104 Ey = 148 Exy = 4784 Ex2 = 3240 Ey2 = 8264

rt, EPS = 4(1806) – 7072

4 (3240) – 10816) 4(1362) – 4624
152 152
= =
2144 (824) 1329
rt,EPS
= 0.11
The result shows that there is weak relationship between turnover and EPS for 7-up bottling
company Plc.
r
t, DPS = 4(3580) – 11856
4 (3240) – 10816) 4(3946) – 12996
2464 2464
= =
2144 (2788) 2444
rt,DPS
= 1.00
There is a VERY STRONG relationship between turnover and DPS of 7up bottling company
plc.
rt, NAS = 4(4784) – 15392
4 (3240) – 10816) 4(8264) – 21904
3744
=
2144 (11152)
r
t,NAS = 0.77
There is a VERY STRONG relationship between turnover and NAS of 7up bottling company.
15 European Journal of Economics, Finance And Administrative Sciences - Issue 12 (2008)
Table 3: Flourmills Nigeria Plc

Years X (% Δ Turnover) Y(% Δ performance) XY X2 Y2

EPS
2001 40 11520 1600 82944
288
2002 - - - - -
2003 27 436 11772 729 190096
2004 25 7 175 625 49
Ex = 92 Ey = 731 Exy = 23462 Ex2 = 2954 Ey2 = 273089
DPS
2001 40 240 1600 36
6
2002 - - - - -
2003 27 76 2052 729 5776
2004 25 59 1475 625 3481
Ex = 92 Ey = 141 Exy = 3767 Ex2 = 2954 Ey2 = 9293
NAS
2001 40 1120 1600 784
28
2002 - - - - -
2003 27 17 459 729 289
2004 25 96 2400 625 9216
Ex = 92 Ey = 141 Exy = 3979 Ex2 = 2954 Ey2 = 10289

rt, EPS = 4(23467) – 67252

4 (2954) – 8464) 4(273089) – 534361
26616
=
3352 (557995)
r
t,EPS = 0.62
There is Strong relationship between turnover and EPS for Flourmills Nig Plc.
rt, DPS = 4(3767) – 12972
4 (2954) – 8464) 4(9293) – 19881
2096 2096
= =
3352 (17291) 7613
r= 0.28
There is a MODERATE ship between turnover and DPS of Flourmills Nig Plc.
rt, NAS = 4(3979) - 12972
4 (2954) – 8464) 4(10289) – 19881
2944
=
3352 (21275)
rt,NAS
= 0.35
There is a MODERATE relationship between turnover and NAS for Flourmills Nig Plc.
16 European Journal of Economics, Finance And Administrative Sciences - Issue 12 (2008)
Table 4: Nestle Nigeria Plc

Years X (% Δ Turnover) Y(% Δ performance) XY X2 Y2

EPS
2001 41 1927 1681 2209
47
2002 38 26 988 1444 676
2003 26 - 26 676 -
2004 16 0.8 12.8 256 0.64
Ex = 121 Ey = 74 Exy = 2954 Ex2 = 24057 Ey2 = 2885
DPS
2001 41 1927 1681 2209
47
2002 38 36 1368 1444 1296
2003 26 17 442 676 289
2004 16 - 16.0 256 -
Ex = 121 Ey = 100 Exy = 3753 Ex2 = 4057 Ey2 = 3794
NAS
2001 41 656 1681 256
16
2002 38 - 38 1444 -
2003 26 7 18.2 676 49
2004 16 9 144 256 81
Ex = 121 Ey = 32 Exy = 1020 Ex2 = 4057 Ey2 = 386

rt, EPS = 4(2954) – 8954

4 (4057) – 14641) 4(2885) – 5476
2862
=
1587 (6064)
t,EPS r = 0.92
Since rt, EPS > 0.70, there is VERY STRONG relationship between turnover and EPS of
Nestle Nig. Plc.
r
t, DPS = 4(3753) – 12100
4 (4057) – 14641) 4(3794) – 10000
2912
=
1587 (5176)
r= 1.02
The above result show that there is a VERY STRONG relationship between turnover and DPS
of Nestle Nig. Plc.
r
t, NAS = 4(1020) - 3872
4 (4057) – 14641) 4(386) – 1024
3208
=
1587 (520)
rt,NAS = 3.5
There is a VERY STRONG relationship between turnover and NAS of Nestle Nig. Plc.

Conclusion and Recommendation

This study examined the relationship between budget and performance of the selected food and
beverage companies considered. We reviewed previous literature and contributions to this study, the
problems associated with budgetary control, performance of the Nigerian manufacturing industry in
17 European Journal of Economics, Finance And Administrative Sciences - Issue 12 (2008)
previous and recent times, among other salient issues relevant to the subject of study. We found out
that the performance of manufacturing sector which the selected food and beverages companies
represent, leaves much to be desired, as a result of factors such as; over dependence on crude oil,
neglect of the industry due to epileptic power supply, collapsing infrastructures, unfavourable sectoral
reforms, among other factors, which altogether have resulted in low capacity utilization of the
manufacturing industry..
However, an empirical investigation was undertaken, using the simple correlation analytical
technique, specifically the Pearson product movement correlation coefficient (PPMC) to aid easy
understanding of the layman who is also expected to maximize the advantage of the result-oriented
budgetary control system. In most of the cases, considered, the result established the presence of a
strong relationship between turnover as a budget variable and performance indicators i.e EPs (Earnings
per share), DPs (Dividend per share) and NAs, (Net Asset per share) of the selected food and beverages
companies.
Following our findings, we hereby advise managers and business operators (not only in the
manufacturing industry) to pay more attention to their budgetary control systems, while those without
any should endeavour to ensure the set-up of a result-oriented system as it goes a long way in
repositioning businesses and organizations from their creeping performance level to an improved and
high capacity utilization point.

References
1] Dangote, A.(2001) Developing manufacturing Industry in Nigeria. Paper Presented at the First
CBN Annual Monetary Policy Forum, Abuja.
2] CBN (1995) Economic and Financial Department, Lagos Nigeria
3] CBN (1996) CBN Briefs, Research Department, Lagos Nigeria
4] CBN (2002) CBN Briefs, Research Department, Lagos Nigeria
5] Nnanna O.J (1987) “Assessment of Performance of the second tier foreign exchange market”.
CBN Bullion Vol. 11, No. 2. April/June 1987.
6] Oguma P.A (1995) “Revitalizing the manufacturing sector in Nigeria”. CBN Bullion, Vol 19(2)
April/June 1995.
7] The Nigeria Stock Exchange Fact Book (2005).