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 →
26
Relationship Between Forensic Auditing And Fraud Risk Management. A Case Study Of ABSA Bank, Kampala
Forensic auditing
fraud risk management
fraud detection
fraud prevention
27
Relationship between internal control and organization management. A Case Study Of Brac Kampala Office.
internal control
organization management
BRAC Uganda
control environment
28
Relationship Between Inventory Management And Organizational Performance At Uganda Clay
financial reporting
service delivery
local government
Kakumiro Municipal Council
29
Relationship Between Inventory Management And Performance Of Coca-Cola Company Namanve Branch.
Financial Control
Financial Stability
Budgetary Control
Internal Audit
30
Relationship Between Managerial Competence And Working Capital Management Within Logistics Companies In Kampala
inventory management
organizational performance
inventory control
inventory optimization