Financial Management Practices Among Small and Medium Enterprises in Kenya [MBA Thesis] PDF Download

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Languages : en
Pages : 67

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Author:
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Languages : en
Pages : 71

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The purpose of this study which was to investigate the current asset management practices of small and medium enterprises in Nairobi County. The research was guided by the following research objectives: firstly to determine the cash management practices of SMEs; secondly to ascertain the account receivables management practices of SMEs; finally to examine the inventory management practices of SMEs. Descriptive research design was adopted due to the population under study. Stratified random sampling was used because the population can be segregated into several mutually exclusive subpopulations, or strata therefore, it was easier to make inferences on the specific groups of the population because the groups share attributes or characteristics. There were five strata representing sectors. The first represented agriculture sector, the second was the industry and manufacturing, the third one was technology, the fourth one hospitality and the final one the energy sector. Data was collected using a structured questionnaire while analysis was done using Statistical Package for Social Sciences (SPSS) and spreadsheet and presented by way of figures and tables. In terms of findings, the study revealed that The SMEs used mostly used their own cash sources to finance their business. Most of the SMEs do not regularly set cash targets for their business. In the event of cash shortages the financial institutions are mostly used in order to plug this gap. The SMEs are ambivalent on the need of budgeting their cash. Furthermore the SMEs used the banks as a source of both storage and source of cash. All SMEs record their daily cash transactions. Finally, the surplus cash generated by the SMEs is re-invested back into the business. More than half of the SMEs sell their products and services on credit. The average collection period is 30 days, although this varies depending on the individual agreements between the SMEs and their buyers. The fear of credit defaults makes some of the SMEs not to sell their goods and services on credit. The SMEs also use formal credit investigation to determine the credit worthiness of their debtors. They check the debtors? credit history with their business and also cross reference with other businesses. In case of a default most of the SMEs take legal action against the defaulters or cease from supplying them with their products and services. The SMEs record the credit history on IOUs and delivery notes The SMEs source their inventory both in the local market and in the foreign market with some using a hybrid of the two markets. In order to prevent large inventory holding costs most SMEs do not stock-pile their inventories. Inventory record is well entrenched practice with these SMEs. Some SMEs conduct regular stock takes, with the stock take on average happening periodically on a monthly basis. The SMEs lack re-order level policies to monitor the inventory re-order levels. In conclusion the findings from this study show that most of the investors conformed to the conventional liquidity management mechanisms of business institutions. They did this by safeguarding financial records, supplementing cash shortages with loans from the bank, saving profits on a daily basis and spending within their financial capability. Investors also use credit sales geared to promote growth in their industries. Furthermore buying of stocks from local companies at moderate quantities and regular stock-taking were the strategies used by the operators in managing their inventory machineries. On the basis of the findings, it is recommended that in order to optimize cash asset management SMEs need to identify their investment priorities particularly those that are crucial in sustaining their businesses in the long run. They should pursue strategies that can generate sufficient funds to augment their cash target. The medium and small entrepreneurs should also formulate a credible credit policy for their enterprises. In crafting such a policy criteria should be set as to the conditions and terms for credit granting. On the inventory front a re-order level policy should be established that will create an enabling environment for them to request for the supply of moderate and high quality stocks therefore optimizing their cash utility.

Author: Daniel Nthenge
Publisher:
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Languages : en
Pages : 27

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Financial management is an important element of the management of any business. This study was therefore, designed to establish the effect of financial management practices on financial performance of small and medium enterprises in Kiambu town in Kenya. Three variables namely Working Capital Management, Investment decisions and financing decisions [independent variables] were used to measure financial performance [dependent variable]. The study used descriptive research design utilizing qualitative data captured using a self-administered questionnaire. The study showed that considered individually, there is a positive relationship between working capital management; investment decisions; financial decisions and financial performance. The study showed that the combined effect of financial management practices [working capital management, investment decision, financial decision] have a moderate positive relationship between financial management practices and financial performance. The study recommends that to enhance financial performance, the organizations [SMEs] should adopt credit policies to guide credit sales. The policies should create a balance between customer retention and adequate the cash flow. Secondly the study recommends that the government should ensure creation of favourable policy and economic environment through legislation that facilitate access to affordable sources of funding for SMEs and attract venture capitalist. Third, developing appropriate strategies and policies that enhance financial decisions will be critical for the SMEs in enhancing their financial performance. Fourth, a study that covers other parts of the country with unique business environments would be welcome.

Author: Mathew Marembo
Publisher:
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Category : Business enterprises
Languages : en
Pages : 352

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Author: Isaac Nketsiah
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Languages : en
Pages : 1

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Proper financial management is essential for business survival because firm's inability to identify and implement relevant financial management practices can affect its performance. This study examines financial management practices and their relationship with performance of small and medium enterprises (SMEs) in the Sekondi-Takoradi Metropolis. The financial management practices covered financial records keeping, asset management, receivables management, cash management, inventory management and payables management. A sample of 147 SMEs made up of 133 small firms and 14 medium enterprises were used. Multiple linear regression analysis model was used to test the relationship between financial management practices and SMEs performance. The results show that receivable management, cash management, inventory management and asset management practices influence SMEs performance. Firm's age has a moderating effect on the association between financial management practice and SMEs performance. It is recommended that SMEs should incorporate good financial management practices such as credit management, cash management, inventory management and asset management in their operations.

Author:
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Category : Small business
Languages : en
Pages : 38

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Category :
Languages : en
Pages : 53

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Author: K. W. Chau
Publisher: Springer
ISBN: 9811061904
Category : Business & Economics
Languages : en
Pages : 1500

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This book presents the proceedings of CRIOCM_2016, 21st International Conference on Advancement of Construction Management and Real Estate, sharing the latest developments in real estate and construction management around the globe. The conference was organized by the Chinese Research Institute of Construction Management (CRIOCM) working in close collaboration with the University of Hong Kong. Written by international academics and professionals, the proceedings discuss the latest achievements, research findings and advances in frontier disciplines in the field of construction management and real estate. Covering a wide range of topics, including building information modelling, big data, geographic information systems, housing policies, management of infrastructure projects, occupational health and safety, real estate finance and economics, urban planning, and sustainability, the discussions provide valuable insights into the implementation of advanced construction project management and the real estate market in China and abroad. The book is an outstanding reference resource for academics and professionals alike.

Author:
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Category :
Languages : en
Pages : 82

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Author: Meghana Ayyagari
Publisher: World Bank Publications
ISBN:
Category : Pequeą y mediana empresa (PYME)
Languages : en
Pages : 40

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This paper describes a new cross-country database on the importance of small and medium enterprises (SMEs). This database is unique in that it presents consistent and comparable information on the contribution of the SME sector to total employment and GDP across different countries. The dataset improves on existing publicly available datasets on several grounds. First, it extends coverage to a broader set of developing and industrial economies. Second, it provides information on the contribution of the SME sector using a uniform definition of SMEs across different countries, allowing for consistent cross-country comparisons. Third, while we follow the traditional definition of the SME sector as being part of the formal sector, the new database also includes the size of the SME sector relative to the informal sector. This paper describes the sources and the construction of the different indicators, presents descriptive statistics, and explores correlations with other socioeconomic variables. This paper--a product of Finance, Development Research Group--is part of a larger effort in the group to study SME-related issues.