The effect of financial planning on financial performance of small and medium enterprises in Adjumani district, a case study of Pakele sub county:
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Date
2019-09
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Kampala International University, College of Economics and Management.
Abstract
The purpose of this study was to find out the effect of financial planning on financial
performance of SMEs in Pakele Sub County, Adjumani district. The specific objectives of the
study was to determine the effects of accounts receivable management on financial
performance of SMEs, to determine the effects of liquidity management on the financial
performance of SMEs, and to determine the effects of cash disbursement management on the
financial performance of SMEs. The study was conducted in Pakele Sub County in adjumani
district, and Data was collected fI~om 44 respondents using questionnaires.
The researcher used descriptive research design in collecting data from respondents where
both qualitative and quantitative approaches were used. The findings indicated financial
planning had a positive effect on the financial performance of SMEs. In conclusion, the study
was carried to a much success out and all the objectives were fulfilled.
The first objective was accomplished where it was found that liquidity management has a
positive, moderate significant effect on financial performance. The second objective was
fulfilled where it was found that accounts receivables also had a positive and significant
effect on financial performance of SMEs.
The final objective of the study sought to evaluate the effect of cash disbursement
management on the financial performance of SMEs. The study also revealed that proper cash
disbursement management had a positive effect on the financial performance of SMEs. The
findings concluded that financial planning activities helped the businesses to keep capital,
managed risks, increased the efficiency of operations, and expanded the capacity of the
businesses to embrace opportunities.
The study found that some of the SMEs do not practice financial planning, which renders
their business prone to anticipated business risks and some inefficiency.
Therefore it was recommended that awareness be created by policy makers and the relevant
authorities of Uganda to the business owners in preparation of financial documents which are
very important in financial planning in business operations.
Description
a research report submitted to the college of economics and management in partial fulfillment of the requirements for the award of bachelor’s degree of business administration-accounting and finance at Kampala international university.
Keywords
financial planning, financial performance, small and medium enterprises