scholarly journals Impact of Financial Management Practices on Performance of Small and Medium Enterprises – Legitimacy Theory Perspectives

2021 ◽  
Vol 10 (1) ◽  
pp. 43
Author(s):  
T. Tharmini ◽  
A. M. I. Lakshan
Keyword(s):  
Financial Management ◽  
Management Practices ◽  
Small And Medium Enterprises ◽  
Legitimacy Theory ◽  
Medium Enterprises

scholarly journals Impact of Financial Management Practices on SMEs Profitability with Moderating Role of Agency Cost

2017 ◽  
Vol 9 (1) ◽  
pp. 23-30 ◽  
Author(s):  
Saqib Muneer ◽  
Rao Abrar Ahmad ◽  
Azhar Ali
Keyword(s):  
Financial Management ◽  
Structural Equation ◽  
Management Practices ◽  
Small And Medium Enterprises ◽  
Agency Cost ◽  
Partial Least Square ◽  
Least Square ◽  
Primary Data ◽  
Medium Enterprises ◽  
The Impact

The importance of Small and medium enterprises (SMEs) towards economic development and growth is considerable. Some SMEs are facing difficulties to their development due to the lack of financial resources and management experience. The objective of this study is to check the relationships of financial management practices on profitability of small and medium enterprises and also to check the impact of agency cost on this relationship. This study consists of data analysis of two hundred SMEs from Faisalabad Pakistan. The study used primary data predominantly. SPSS 23 is used for descriptive analysis and Structural Equation Model (SEM) through Partial Least Square (PLS) 3 for hypothesis testing. The findings of this study indicate the presence of positive relationship between financial management practices and SMEs profitability but agency cost as a moderator has no effect on this relationship. The study strongly recommends higher adherence to financial management practices. Policy makers, developments partners, owners, and managers of SMEs may use these findings for sustainability of their business in Pakistan.

scholarly journals Microfinance Credit Accessibility and Financial Performance of Small and Medium Enterprises in Machakos County, Kenya

2020 ◽  
Vol 4 (1) ◽  
pp. 71
Author(s):  
Muema Joseph Munguti ◽  
Lucy Wamugo
Keyword(s):  
Financial Performance ◽  
Financial Management ◽  
Management Practices ◽  
Banking Sector ◽  
Small And Medium Enterprises ◽  
Small Population ◽  
Financial Access ◽  
Income Ratio ◽  
Medium Enterprises ◽  
Positive Effect

SMEs in Machakos County have been characterized by poor financial performance which has been linked to financial access. Financial access is one of the keys that drive the development of SME in the country, particularly access to bank financing since banking sector plays a key role in serving this segment. This study specifically sought to determine the influence of collateral security, loan-income ratio and geographical branch penetration on financial performance of SMEs. Study adopted census survey due to small population size. Respondents were supplied with semi-structured questionnaires with aim of getting their views regarding financial accessibility and SME performance. Findings of the study indicated that collateral security, loan-income ratio, and geographical branch penetration has a significant positive effect on financial performance in Machakos County, Kenya. This research recommends that SME’s should improve their core capital, strengthen their financial management practices, foster financial innovation, and literacy within firms.

scholarly journals Financial management practices in successful Small and Medium Enterprises (SMEs)

2015 ◽  
Vol 7 (1) ◽  
pp. 88 ◽  
Author(s):  
Hendrik Petrus Wolmarans ◽  
Quentin Meintjes
Keyword(s):  
South African ◽  
Financial Management ◽  
Management Practices ◽  
Small And Medium Enterprises ◽  
Balance Sheet ◽  
Management Skills ◽  
Body Of Knowledge ◽  
Frequency Of Use ◽  
Medium Enterprises ◽  
Financial Practices

<p>Although the success of small, medium and micro enterprises (SMEs) is extremely important for the South African economy, their failure rate is amongst the highest in the world; some researchers estimate as high as 90 percent. Research has shown that the lack of financial management skills and application of financial management practices are some of the biggest factors contributing to SME failure. However, it is not clear from the literature which of these skills and practices are more important than others. This study aims to fill this gap by determining which financial management skills are relevant for successful SMEs. A survey was done on a sample of owner-managers of successful SMEs who had been asked, firstly, whether they performed different financial management practices and, secondly, how frequently they performed these in their companies. The study concludes that practices regarding working capital as well as profitability are much more relevant than those regarding a balance sheet or strategic finance. Similarly, financial practices related to cash flow and decision making are more relevant than those related to planning or analysing. It may be true, due to the high risk and volatile environment of SMEs, as well as the challenges that are often underestimated, that financial practices which academics regard as important are not always implemented by these companies.  This study contributes to the existing body of knowledge as it determines the relative relevance and frequency of use of financial management practices by successful SMEs.</p><p><strong>KEY WORDS </strong></p><p>Small and medium enterprises, Financial management practices, Successful SMEs, Entrepreneurship education</p>

scholarly journals THE USE OF FINANCIAL MANAGEMENT PRACTICE BY BATIK PEKALONGAN MSMEs

2020 ◽  
Keyword(s):  
Financial Management ◽  
Management Practices ◽  
Small And Medium Enterprises ◽  
Management Practice ◽  
Qualitative Approach ◽  
Structured Interviews ◽  
Medium Enterprises

Micro, Small, and Medium Enterprises (MSMEs) are recognized worldwide as the main source of dynamism, innovation, and flexibility. This study aims to analyze the financial management practices used by the Pekalongan batik craft SMEs. The method used is descriptive with a qualitative approach. Data were collected by structured interviews with a samples are 30 determined by snowballs sampling. The results show that the owner’s knowledge of financial management is still limited, did not prepared a financial budget regularly, and rarely compare the budget with the actual results. Most owners had check supplies once a week and did not evaluate the feasibility before started to invest. Range for ROA were 2% to 5%, and NPM 10% to 20%. All owners are satisfied with doing the business, and no one to thinks of moving to other businesses in other fields.

Assessment of Financial Management Practices of Small and Medium Enterprises (SMEs) in Nasugbu, Batangas

2021 ◽  
Vol 1 (2) ◽  
pp. 24
Author(s):  
Marvin C. Hernandez ◽  
Corinna S. Balboa ◽  
Rommel C. Cuenca ◽  
Nik Ki Dale G. Quilantang
Keyword(s):  
Financial Management ◽  
Business Performance ◽  
Management Practices ◽  
Small And Medium Enterprises ◽  
Working Capital Management ◽  
Significant Difference ◽  
Main Instrument ◽  
Medium Enterprises ◽  
Descriptive Method ◽  
Gathering Data

The Small and Medium Enterprises have been identified as important contributors to economic development who are facing a range of challenges which work against their progress, one of which is financial management. This study aimed to assess the financial management practices of small and medium enterprises in Nasugbu, Batangas. The researchers used the descriptive method with a questionnaire as the main instrument in gathering data from 34 respondents. Frequency, percentage, and mean were used as statistical tools in the study, and analysis of variance was used to determine the significant differences between variables. The data gathered were tallied, analyzed and interpreted. The results of the study revealed that majority of the respondents implement financial management practices. Financial management practices such as financial planning, investment, and working capital management are highly applied by small and medium enterprises in Nasugbu, Batangas. It was also revealed that there is a significant difference in the application of financial management practices of small and medium enterprises when they are grouped according to business profile. The outcome of this study may be useful for the entrepreneurs to focus on financial management practices in order to enhance their business performance. 

scholarly journals The Effect of Financial Management Practices on Performance of SMEs in Sri Lanka

2020 ◽  
Vol 8 (05) ◽  
pp. 1789-1803
Author(s):  
Somathilake HMDN ◽  
Pathirawasam C
Keyword(s):  
Sri Lanka ◽  
Capital Structure ◽  
Financial Management ◽  
Management Practices ◽  
Small And Medium Enterprises ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Medium Enterprises ◽  
Positive Effect

Small and Medium Enterprises (SMEs) play an important role in every developing country contributing to the growth of the economy in many ways. The aim of this study is to identify the effect of financial management practices on performance of SMEs in Sri Lanka: Special Reference to North Central Province (NCP). Working capital management practices, Investment appraisal practices, Capital structure management practices, financial reporting & analysis practices and Accounting information system practices were identified as independent variables and Performance of SMEs was identified as the dependent variable of this study. All SMEs (nearly 2000 SMEs) operating in NCP during the year 2019 was identified as the population of this study. Out of that, 322 SMEs were selected as the sample based on disproportionate stratified random sampling method and final sample was 245 manufacturing, service and trade SMEs operating in NCP. Data was collected through a structured questionnaire distributed among SMEs functioning in NCP. Descriptive statistics and inferential statistics like Pearson correlation analysis and multiple regression analysis were used to analyze data using the SPSS package. Results of the study revealed that there is a positive effect of financial management practices on performance of SMEs. Among financial management practices, working capital management practices and capital structure management practices have a significant positive effect on SMEs performance. Keywords: Capital structure, Financial Management, Performance, Small and Medium Enterprises, Sri Lanka, Working capital.

scholarly journals Identification of strengths and barriers among Pakistani SMEs: A financial management viewpoint

2017 ◽  
pp. 110-120
Author(s):  
Asif Ali Shah Et al.,
Keyword(s):  
Financial Management ◽  
Financial Risk ◽  
Management Practices ◽  
Small And Medium Enterprises ◽  
Study Finding ◽  
Structured Interviews ◽  
Agriculture Sector ◽  
External Capital ◽  
The Status ◽  
Medium Enterprises

In Pakistan, Small and Medium Enterprises (SMEs) are considered as key indicators of the status of the national economy through contributing 90% in total businesses establishments and 80% employments in the non-agriculture sector. Pakistani government with the assistance of Small and Medium Enterprise Development Authority (SMEDA) and other associated organizations are undertaking multiple activities to boost awareness and importance of adopting prudent financial management practices by SMEs. This research endeavor aimed at exploring the strengths and barriers faced by SMEs in planning and undertaking sound financial management practices. Keeping in view the exploratory nature of this research, based on qualitative research paradigm, semi-structured interviews were conducted with managers/owners of thirty SMEs. The study findings demonstrated that the component of capital found to act as strength and barrier among SMEs. On one side, the absence of external capital (loan) appeared beneficial for SMEs due to minimizing financial risk for the business and offering more freedom to managers in their decision making without having any fear regarding any restrictions imposed by external finance. However, on the other side, lack of financial resources due to having difficulty in acquiring external capital (loan) might restrict SMEs capability to undertake viable business opportunities. This study highlights the crucial role of adopting appropriate financial management practices in developing a sound capital structure for SMEs. This study finding could provide useful insight to SMEs pertinent to dealing with multiple business challenges and acquiring sustainable profitability.

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