Journal
Metropolitan Journal of Academic Multidisciplinary Research
MJAMR
Relationship Between Cash Management And Financial Performance Of Small Business Enterprises In Main Market, Arua City.
Kitakufe Takiu, Kabanda Richard
| Journal | Metropolitan Journal of Academic Multidisciplinary Research (MJAMR) |
| Volume / Issue | Vol. 4, No. 12 |
| Published | 31 December 2025 |
| ISSN | 3006-4384 |
Abstract
The study investigated the relationship between cash management practices and financial performance of small business enterprises (SBEs) operating in Main Market, Arua City, Northwestern Uganda. The research was necessitated by high business failure rates attributed to poor financial management and liquidity challenges among small enterprises. A cross-sectional survey design was employed, collecting data from 156 SBE owners and managers through structured questionnaires and interviews. Quantitative data were analyzed using descriptive statistics, Pearson correlation, and multiple regression analysis. The findings revealed a significant positive relationship between cash management and financial performance (r=0.814, p<0.01). Regression analysis demonstrated that cash management practices explained 66.3% of variance in financial performance (R²=0.663, F=51.289, p<0.001). Specific results showed that cash flow planning (β=0.418, p<0.001), receivables management (β=0.356, p<0.01), and cash control systems (β=0.298, p<0.01) were significant predictors of financial performance. Businesses with formal cash budgets reported 47% higher profitability and 52% better liquidity ratios compared to those without. The study concluded that effective cash management was critical for SBE survival and growth, with cash flow planning being the most influential factor. Key recommendations included: adopting formal cash budgeting systems, implementing credit policies to manage receivables, maintaining optimal cash reserves, utilizing mobile money and digital payment platforms, and participating in financial literacy training programs. The research contributed to the understanding of financial management practices in informal market settings and provided practical guidance for entrepreneurs and business development service providers seeking to enhance SBE performance in Uganda's regional urban centers.
Keywords
Cash Management
Financial Performance
Small Business Enterprises
Cash Flow
Working
Cite This Article
Kitakufe Takiu & Kabanda Richard (2025). Relationship Between Cash Management And Financial Performance Of Small Business Enterprises In Main Market, Arua City. Metropolitan Journal of Academic Multidisciplinary Research, 4(12). https://journals.miu.ac.ug/pages/article.php?article_id=542
More in This Issue
View full issue →
21
Relationship Between Digital Literacy And Performance Of Small And Medium-Sized Electronic Enterprises In Kampala District, Uganda.
Digital literacy
SME performance
electronic enterprises
Kampala District
22
Relationship between E-Funds Transfer And Financial Performance Of Commercial Banks Of Stanbic Bank At Kawempe Branch
E-funds transfer
financial performance
commercial banks
digital banking
23
Relationship Between Electronic Medical Records And Healthcare Service Delivery In Entebbe Regional Referral Hospital And Dr Ronald Bata Hospital.
Electronic Medical Records
Healthcare Service Delivery
Hospital Information Systems
Patient
24
Relationship Between External Business Environment And Effective Pricing Among Clearing And Forwarding Logistics Enterprises In Nakawa Division, Kampala.
External business environment
pricing effectiveness
logistics industry
clearing and forwarding
25
Relationship Between Financial Reporting Standards And The Financial Performance Of Centenary Bank Kassanda
Financial reporting standards
IFRS
financial performance
profitability