| dc.description.abstract | The study investigated the e effect of working capital management practices on the
financial performance of SMEs in Uganda taking Nakawa Market. The study objectives
were to establish the effect of cash management on financial performance of SMEs in
Uganda, to evaluate the effect of receivables management on financial performance of
SMEs in Uganda and assess effect of inventory management on financial performance of
SMEs in Uganda.
The research was conducted by using quantitative approach and adopting a case study
design. Data was collected using questionnaires, as well as review of day to day business
records. A total of 130 respondents who included business owners and staff working in
retail SMEs in Nakawa Market. Data was analysed using Statistical Package for social
scientists to generate descriptive and inferential statistics. Analyzed data was presented in
tables, graphs and charts.
The study found out that working capital management in SMEs was undertaken through
cash, receivables and inventory management. It was established that number of SMEs
had cash related problems; most of their cash was tied in debts, and had little or no
savings in the cash and at the bank. A positive relationship was established between cash
management and financial performance. It was further established that SMEs give credit
to their customers, although a number of these clients did not pay back affecting the sales
volumes. It was also found out that trade receivable management enhanced financial
performance. More so, the firms held various inventories depending on their lie of
business, although there were a few records related with inventory management. There
was a strong positive relationship between inventory management and financial
performance. The study concluded that there was a strong relationship between working
capital management and financial performance of SMEs.
Recommendations included that SMEs proprietors and Owners need to employ skilled
and well trained staff, regulate their cash needs, have a policy that guides them in
granting of debts to customers, improve on their scope of savings and investments, and
also have regular inventory management to regulate inventory flow and related costs.
The effect of saving and investment culture on financial performance as well as effect
of inventory flow record keeping on the financial performance of SMEs were
recommended for further research. | en_US |
