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 →
36
The Effect Of Mukwano Tea Leave On Employment Of Local Communities. A Case Of Mukwano Group Of Companies Kampala
Mukwano tea leaves
employment creation
local communities
Mukwano Group of Companies
37
The Effect Of Objective - Based Appraisal Workers’ Productivity In Mubende District Local Government
Objective-based appraisal
workers' productivity
performance management
Mubende District
38
The Impact Of Local Revenue Collection And Service Delivery In Lower Local Government In Nansana Municipality Kampala.
Local Revenue Collection
Service Delivery
Lower Local Government
Decentralization
39
The Influence Of Electronic System Management On Organizational Management Of Nansana Municipality
Electronic System Management
Organizational Management
Local Government
Nansana
40
The Mediation Effect Of Knowledge Resources In The Relationship Between Project Complexity Management And Project Performance Of SCADA, Yaka And AMR Projects.
project complexity management
knowledge resources
project performance
SCADA projects