Financial Management Practices and Profitability of Small-Scale Business Enterprises in Uganda: A Case Study of Selected Small-Scale Industries in Kabale Municipality.
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Date
2023
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Kabale University
Abstract
This study was about on financial management and profitability of small-scale business Enterprises in Uganda a case study of selected small-scale industries in Kabale Municipality. It had three objectives; to establish the financial management practices of small and medium scale enterprises in Kabale Municipality, to determine the profitability of small and medium scale enterprises in Kabale Municipality, and to find out other ways that lead to the profitability of small and medium enterprises in Kabale Municipality. A cross-sectional research design was employed to guide the study. The design formulated important principles of knowledge and solutions to the existing problems. A qualitative technique was used to be able to generate detailed information about die study to establish the patterns, trends, and relationships among variables as they existed at that particular moment. In this study, the sample size included 50 respondents from a population of 57 with a confidence of 95% (0.05), the sample selection considered different factors such as the purpose of the study, time allocated for the research, and availability of required information for the study. The study findings show that when a specific component of financial management practices is properly adopted and implemented, SMEs' performance will improve in terms of profitability and growth. The results revealed that SMEs that want to improve their financial performance must ensure good working capital management practices, adopt and implement good financing reporting and bookkeeping practices relevant to decision-making, manage their capital structure well, and adopt capital budgeting techniques and fixed assets management. The study concludes that there are those proportions of the profits SMEs save annually keep increasing the responses, SM Es incomes often exceed the expenses we incur, SM Es stock has been increasing the last few months, SMEs' profits have been increasing over time, These findings made the researcher conclude that SMEs in Kabale Municipality have grown. The study recommends that; SME owners should be advised to strengthen and put up policies regarding debtors on how to collect receivables, be able to know when to write off bad debts to minimize losses that accrue as a result of none payment, the Ministry of Finance and Economic Planning, Bank of Uganda should provide a favorable platform for SM Es to access financing that can enable them to run their businesses at a reasonable cost of financing and trainings should be organized for SMEs owners to help them understand why they should keep updated books to know their levels of performance on whether they are making profits or losses as well as know how to control costs through looking at the previous data.
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Nimusiima, Dichus (2023). Financial Management Practices and Profitability of Small-Scale Business Enterprises in Uganda: A Case Study of Selected Small-Scale Industries in Kabale Municipality. Kabale: Kabale University.