Effect of Financial Management Practices on Profitability of Small-Scale Enterprise: Case Study Hawassa City Administration, Ethiopia
Journal Title: IOSR journal of Business and Management - Year 2018, Vol 20, Issue 6
Abstract
Small-Scale Enterprises are very important to the economic growth and development of a country. SensibleFinancial Management Practices can help Small-Scale Enterprises to become profitable and stays in business for a long period of time. This study aims to examine theeffect of Financial Management practices on profitability of Small-scale Enterprise in Hawassa City Administration. Questionnaires were used to collect primary data while secondary data were collected from various documents. The surveyinvolves 116 Small-Scale Enterprise for empiricalexamination of fixed asset management practice, accounting information systems practice, capital budgeting management practice, working capital management practice and capital structure management practice of Small-scale enterprises.Descriptive, correlation and regression analysis were used to analyze the data. Results revealed that a good financial management practice is abackbone to Small-Scale enterprises profitability, success and expansion. Analytical finding revealed that, fixed asset management practices, accounting information system and financial reporting analysis, working capital management practices, and capital budgeting managementpractices have positive relationship with profitability; but capital structure management practices has negative relationship with profitability. Accordingly, policy makersare recommended to design supportivepolicy tosmall scale enterprisesas far as the variables are concerned.
Authors and Affiliations
Desta Yohanes, Kenenisa Lemie Debela, Woldemichael Shibru
Keywords
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- EP ID EP411561
- DOI 10.9790/487X-2006023945.
- Views 67
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