Professional Documents
Culture Documents
Catchonite, Jesel
October 2021
INTRODUCTION
Don’t just copy and paste try to put your own words, by answering the questions:
why you choose to study this topic, what are your observations, why is it worth exploring? I
think you were confused with introduction and review of related literature… please try to
check it out. The introduction need not to be long. But a RRL is longer.
You may narrate the history of SMEs in the Philippines it was just few years ago that
Small and Medium Enterprises are crucial to a country’s economic development. Due to their
considerable contributions to the economies of both developed and developing countries, the
relevance of SMEs has gained a lot of international attention in recent years (Asiedu, 2010).
Small and medium-sized enterprises (SMEs) are critical sources of employment, economic
growth, and foreign currency throughout Asia and are important to almost all economies in the
world, especially to those in developing countries and within that broad category and to those
with major employment and income distribution challenges. In Indonesia, SMEs are appreciated
for their ability to produce employment, generate foreign currency through export, and grow into
Also, Small and Medium Enterprise (SMEs) play an important role in the Philippine Economy.
Philippines. The Securities and Exchange Commission defines these businesses as having "total
assets between P3,000,000 and P350,000,000 or total liabilities between P3,000,000 and
P250,000,000" (Valix,et al, 2016, p.697). According to the Department of Trade and Industry,
they are one of the country's economic support systems, accounting for 99.6% of all registered
businesses and employing 60% of the workforce (Camposano,2014). The leaders of our national
government have seen its significance thus they focus on the role of the small and medium-sized
enterprises (SME) with a goal to help boost the economy in order to eradicate unemployment,
poverty, and their potential to grow into larger enterprises. (Edwards, 2018).
Starting and operating a small business includes a possibility of success as well as failure.
Because of their small structure, a simple management error is likely to result in the collapse of a
small business, as management has no opportunity to learn from previous mistakes. Small
business failure has been attributed to a lack of strategy, improper financing, and inadequate
management. Lack of credit has also been regarded as one of the most severe restrictions that
However according to survey, despite their significance, three out of five businesses fail within
the first few months of operation due to several challenges. (Longenecker, et al., 2015). Yanson
(2014) even mentioned that one of the causes of the stagnant growth of SMEs is its inadequate
cash management practices. Because of this, SMEs are not able to identify and maintain their
cash and the overall performance of their business; and if they could not identify these, they
would not know how to have financial stability. According to Amissah (2011), one of the core
reasons why SMEs cannot have accurate financial statements is due to improper practices of
recording and bookkeeping of their transactions from the beginning. Depending on the adequacy
of practice, recording business transactions can either be a big solution or a big problem for
company entities.
With that, researchers cited the importance of cash management practices in the success of the
one’s business. Cash management, according to Macharia (2009), is the most important aspect
performance because in it the business will be able to know the availability of current assets,
particularly cash, influences whether or not a company will continue. In fact, it is the most basic
input required to make the business a going concern (Weda,2015). Also, according to Katz and
Green (2009), the cash management practices to managing liquidity has been widely utilized as a
With that the goal of this study is to derived from the experiences of the Small and Medium
Enterprise (SMEs) owners and their cash management practices whether these factors are really
Biblical Foundation
Try to use grammarly to practically correct some basic grammar. Maybe you could
include the parable of the talents.. that speaks more about management…
Our lives can seem to revolve on making and spending money at times. Cash or money is
equated to success and power, as well as recognition and status, accomplishment, and
significance. However, some only has a short-term enjoyment on the riches and wealth they have
because they get addicted to it and all the privileges it brings only to realize that they already
have nothing because they have spent it unwisely. That is why we have to remember that we’re
called to properly steward what God has given us and foster a healthy relationship with money
by having a cash management practices such as always keeping track with the inflows and
outflows of our cash through recording. In doing this, we can say our acts is in line with our
Creator.
In the Bible, we can read that God keeps a record of everything we do. All of our actions,
whether good or terrible, are recorded in three books: the books of life, death, and remembrance.
He does not keep these books with him because he has a proclivity to forget. Instead, He do this
because we, finite beings, are the ones who might forget.
Also, living in a world that was entirely level and fair, good practices and choices would
lead to provision and wealth, and poor choices to poverty. The reality of proverbs like "All toil
leads to profit, but frivolous chatter leads only to poverty" (Proverbs 14:23) would make perfect
having no good practices and addictive behavior are all natural causes of poverty. On the other
hand, hard work, careful consumption, healthy self-discipline and freedom from addictions
would result in wealth. This could be true for millions or billions of people around the world
today, with their relative prosperity or poverty owing to their own excellent decisions, practices
God desires that we, as His creation, succeed in whatever endeavor we undertake. Many
tales of achievement and the causes for such successes may be found in the Bible. In order for a
man to succeed, he must have good management of herself or himself, that is in congruence with
the law. In Joshua 1:8, Joshua counseled, “This book of the law shall not depart out of thy
mouth; but thou shalt meditate therein day and night, that thou mayest observe to do according
to all that is written therein: for then thou shalt make thy way prosperous, and then thou shalt
have good success.” Joshua's success is due to his diligence in searching the books of Moses,
where he had diligently recorded God's instructions, requirements, reproofs, and prohibitions,
lest he proceed unwisely. Joshua was afraid to trust his own instincts or wisdom. Hence, he
have cash management practices such as recording their activities because it enables them to
keep track the inflows and outflows of cash that would lead them to have more control over their
activities. Furthermore, keeping records demonstrates that we are good stewards of God's
resources.
Conceptual Framework
Please discuss more about cash management and not much on financial literacy.. or
You need to internalize your problem… do not divert the topic..please read more about
financial decisions (Lusardi & Mitchell, 2014). Financial literacy has been shown to be essential
achieving their objectives (Koitaba,2013). Increasing the chances of success among SMEs would
have huge implications for the growth and socio-economic well being of a country (Asian-
Pacific Economic Cooperation, 2004). Many SMEs owners encounter problems during their
lifetime and as a result, many firms perform dismally and fail to grow and internally, most SMEs
lack training and management skills to enable to manage funds effectively (Chepngetich, 2016).
Thus from the mentioned sentences, the conceptual framework for this study isfinancial literacy
theory as developed by Bernheim in 1995. Bernheim initially explored financial literacy theory
by studying adults who failed to link low levels of household savings to economic
vulnerabilities. Individuals are considered financially literate if they are competent and can
demonstrate they have used knowledge they have learned. As people become more literate they
become increasingly more financially sophisticated and it is conjectured that this may also mean
that an individual may be more competent (Moore, 2003). Financial literacy is an essential skill
for SME owners because it is inextricably linked to wealth accumulation and economic growth
(Belle Isle, Freudenberg, & Sarker, 2018; Lusardi & Mitchell, 2014). Therefore, an SME
owner’s level of financial literacy can affect his or her business sustainability. Moreover, there is
a strong correlation between financial literacy and day-to-day financial management (Belle Isle
et al., 2018; Lusardi & Mitchell, 2014). This calls for financial literacy intervention to train the
SMEs owners on how to use the available means of accessing financial services to improve their
enterprises and also reduce the cost of doing business. Financial training is one of the factors that
impact positively on the growth of SMEs because entrepreneurs adequate financial literacy are
better placed to adapt their enterprises to constantly changing business environments (King &
McGrath, 2002). If the owner is financially literate he/she can manage the cash properly and with
Small and medium businesses (SMEs) play an important role in both developed and
developing economies (Afande,2015). You don’t need to quote this your may write your own
words here. What is your observation about Philippine settings? Hence, many governments have
been more interested in this sector in order to improve it. Thus, the purpose of this
financial performance of SMEs. At this stage in the research, understanding the experiences of
the business owners about their cash management practices intends to fully make researcher fully
understand how vitals these practices in helping Small and Medium Enterprise (SMEs) create or
improve their cash management practices in the possibility of having a stable financial
performance.
Research Questions
The study aims to uncover the impact of cash management practices on the financial
performance of Small and Medium Enterprise (SMEs). This will help other SME owners’
understand the importance of cash management practices and improve their practices in order to
have a stable financial performance and this will also help create and develop an improved
economy.
1.) How does cash management practices affect the financial performance of SMEs
remove it.
2.) What
3.) In what ways does the cash management impact the financial performance of SMEs?
SMEs contribute greatly to job creation and overall economic growth. According to the
OECD report from 2017, Enhancing the Contributions of SMEs in a Global and Digitalised
Economy, in the OECD area, SMEs account for approximately 99% of all firms. Moreover, they
contribute to about 70% of total employment and the ‘’ major contributors to value creation,
generating between 50% and 60% of value added on average’’. In developing economies, SMEs
contribute up to 45% of total employment and 33% of GDP. These facts clearly indicate that the
role of SMEs in Sustainability is of tremendous importance for Sustainability agenda to be
realized and prove that the relationship between SMEs and Sustainability is irrevocably tied.
Given the importance of SMEs to the national economy, the study of cash management is
necessary to improve SMEs owners’ ability to grow sustainable businesses that contribute to the
wellbeing of local economies. Therefore, this study is deemed significant and beneficial to the
following:
SMEs Owners. This study would help them in a way that the gathered data and interpreted
results would help them to improve their cash management to maintain their sustainability and
Managers. This study is also beneficial to managers who are struggling in managing the entity’s
financial performance. This would yield information on how to boost the financial performance
Employees. This study would help the employees to know how the entity’s financial
Business students. This study would help the business students to know the factors that affect the
business financial performance and could give them information about cash management that
they will be soon applied when they enter the business world or they can also apply on
themselves.
Business Aspirants. This study would be deemed beneficial to business aspirants because it
would yield information on what management practices or strategies they would implement
when they soon open their business. It would give them enough knowledge and strategy that will
serve as their starter pack in the field of business. They will learn what are the pros of cash
management in the sustainability of their soon-to-be business and the cons if they will not
Future Researcher. This study will serve as a source to other researchers interested in carrying
out further research and provide a new explanation to the given topic.
This study is designed to understand how cash management practices affect the financial
performance of an SMEs; therefore, this study intends to reasonably explain the cash
management practices of an SMEs and how they influence or impacts the entity’s financial
performance. This study aims to finish before the end of 2021 which means that the researchers
have 3 months left to finish this study. The area of this research is SMEs in Murcia and Bacolod
and for the researcher's accessibility as well. The participants of this research will be the SMEs
owners who will be answering a structured questionnaire which the researchers had prepared.
A study limitation is a potential weakness over which the researcher has no control
(Denzin & Lincoln, 2017). The first limitation of this study is that the availability of the
participant to be interviewed and there might be an instance that not all questions will be
properly addressed. The next limitation is the disclosure of interpreted results because it deals
with the personal experiences of SMEs owners and they might agree to be interviewed but
choose not to disclose whatever answer they have. Thus, the beneficiary of our study will not be
fully benefited. The last limitation that the researchers might encounter is difficulty in looking
for an SMEs owner who will participate in our study especially that this will be done virtually. It
will be time-consuming and needs a lot of patience in reaching out to the desired participant.
Definition of Terms
SME (Small and Medium Sized Entities)
Conceptually, SMEs is defined as Small and mid-size enterprises (SMEs) are businesses
Operationally, SMEs is the core context of this study. This is where our study is based.
Cash Management
cash flows.
Operationally, cash management is used in this study as the dependent variable on what
cash management practices does an SMEs owner have. This refer as to the ways or means that
the owner is practicing to manage the cash inflow and outflow to the sustainability of the
business.
Financial Performance
Conceptually, it is a subjective measure of how well a firm can use assets from its
primary mode of business and generate revenues. The term is also used as a general measure of a
wherein the entity is financially healthy based on the cash management practices that the owner