Guiguinto National Vocational High School

Poblacion, Guiguinto, Bulacan

SENIOR HIGH SCHOOL DEPARTMENT
S. Y. 2022-2023

SARI-SARI STORE OWNERS’ LEVEL OF KNOWLEDGE IN

FINANCIAL MANAGEMENT WITHIN STA. RITA, GUIGUINTO,
BULACAN

A Qualitative Research Presented to

The Faculty of Senior High School Department
Guiguinto National Vocational High School
Poblacion, Guiguinto, Bulacan

In Partial Fulfilment
of the Requirements for the Academic Track
ABM - Strand

By;

Dionisio, Kyla Mae B.

Espinosa, Jacob Angelo C.
Gascon, Carina Faye B.
Gatmaitan, Angel Anne J.
Gavieres, Jessie Boy S.
Gratil, Mhica Mae
Herrera, Danielbert Paul L.
Laude, Ashlee Mae N.
Ordoñez, Rennalyn R.
Santiago, Liya Mae B.
Vargas, Marielle M.

Grade 11– ABM C

Anna Veronica D. Sabariaga

Subject Teacher

June, 2023

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 Table of Contents

Page

Chapter 1: The Problem and Its Background

Introduction …………………………………………………………..... 4
Background of the Study ……………………………………………..... 4-6
Significance of the Study …………………………………………...…. 6-7
Theoretical/Conceptual Framework ………………….………………... 7-8
Statement of the Problem ……………………………………………… 9
Hypothesis of the Study .……………………………………………..... 10
Scope and Delimitation of the Study ………………………………..... 10
Definition of Terms …………………………………………………..... 10-12

Chapter 2: Review of Related Literature and Studies *edit using your

own research title

Sari-Sari Stores …………………………… …………………………. 13

Sari-Sari stores as part of MSMEs .…………………………………… 14
Financial Management ….…………………………………………….. 14-16
Investing ……………….…………..………………………………….. 16-17
Operating ….…………………….…………………………………….. 17-18
Financing …………….….…………………………………………….. 18-20
Age …………………..….…………………………………………….. 20
Gender …….…………….…………………………………………….. 21
Educational Attainment ….…………………………………………….. 21-22

Chapter 3: Methodology of the Study

Research design ……………………………………………………….. 23

Methods and Techniques ………………..…………………………….. 23-24
Respondents of the Study ……………….……………………………... 24
Instruments of the Study ………………………………………………. 24
Data Gathering Procedure …………………………………………….. 25
Plan for Data Analysis …………………………...………………….… 25

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Chapter 4: Results and Discussion

Results and Findings ………………………………………………… 26-27

Qualitative Textual Evidences ………………………………………. 27-29
Summary of Findings ……………………………………………….. 30

Chapter 5: Conclusions and, Recommendations

Conclusions…………………………………………………………….. 31-32
Recommendations……………………………………………………… 32-33

References… ………...……………………………………………………...... 34-35

Curriculum Vitae…………………..…………………………………………

Chapter I

INTRODUCTION

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This chapter of the paper presents the problem and its setting. It includes the background of

the study and the statement of the problem.

Introduction

For this study paper, we would want to focus on a retail shop named sari-sari store and the

level of knowledge in financial management of its store owners, in order to better our

understanding of small business financial management. This is a qualitative study that aims to

provide insights into small business financial management strategies. This will benefit those

who want to start a retail business, current store owners, customers, and lending institutions,

as well as future researchers.

Background of the Study

The sari-sari store is a part of the average Filipino's daily life. Any essential household item

that may be missing from one's pantry can be conveniently purchased from a nearby sari-sari

store at a reasonable price, portioned amounts, and sometimes on credit. According to Wilkie

(2010), most stores have insufficient funds due to a lack of investment, and price-conscious

entrepreneurs would like to purchase goods at historical cost in order to profit at the same

time.

Sari-sari stores can be found everywhere in the Philippines. The Sari-Sari Shop is a small

neighborhood store that caters to locals. Basic items such as canned food, instant noodles,

coffee, soda, and other items commonly purchased by Filipinos are typically sold in the store.

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The name is derived from the Filipino word for variety (sari). Every sari-sari store you visit

may offer similar products, but the number of products they carry will always be as varied as

a glass of halo-halo. (Primer, 2016).

It's common to refer to sari-sari stores as uniquely Filipino businesses. Although its roots in

the Philippines, Chinese traders dominated the sari-sari store market for the longest time. It

all started soon after Spain discovered this place, when all of the Chinese business people

were relocated and their land was taken away. Many clever Chinese decided to build roadside

kiosks to circumvent the land ownership limits and sell their wares to both Filipino settlers

and Spanish settlers. (Valderrama, 2013)

A sari-sari store is a small-scale enterprise that is accessible to everyone with a small amount

of capital. The sari-sari business reduced unemployment and eased the Philippines’ poverty.

These establishments play a significant economic and social role in the Filipino community.

Small and Medium Enterprises are very popular and can be a great factor in an economy

especially in a developing nation (Ramakrishnan, 2013). Small businesses like retail store

really aid a nation on its escalation. The size doesn’t matter because it allows flexibility and

more rapidly decision – making because of its distinctiveness of innovation, drive and

competence (Kropp, Lindsay & Shoham, 2006).

Every sari-sari store needs an effective financial management, it will lead them to success

and maintain the profitability of their business. According to (Longenecker, Moore & Palich,

2006) If a small enterprise be unsuccessful, the major causes is lack of planning,

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unacceptable financing and poor management. When starting a small business, there are only

two possibilities, achievement or failure. Because of its size, mismanagement will certainly

result its own death and it cannot learn from its own mistakes. Also, Nitto (2020) said that the

specific business problem is that some small entertainment business owners lack financial

management strategies to improve productivity and profitability. With that, Sari-sari store

owners are advised to learn proper accounting and financing methods in order to earn large

margins in their small-time business ventures.

Significance of the Study

Store Owners. The study's findings will mostly benefit them, therefore would aid store

owners in making decisions as they run their businesses.

Future Entrepreneurs. The study's findings will inspire aspiring business people having a

limited budget to invest in business and knowing how to launch their own company.

Lending Company. The study's findings will increase their understanding of small

businesses in raising money.

Customers. The study's findings will help the business succeed and eventually customers

will receive appropriate and satisfactory service.

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The Researchers. The study's findings will educate students as the Researchers would like to

run their own businesses and study how to create a financial administration

Other Researcher. The study's findings will be useful to other researchers in the future

studies as reference.

Conceptual Framework

Independent Variable Dependent Variable

Owner’s Profile Level of Knowledge

Age Financial Management

Sex Investing

Educational Attainment Financing

Operating

This framework would merely elaborate the study of level of knowledge in financial

management among sari-sari store owners in Sta. Rita, Guiguinto, Bulacan. The independent

variables of this study are the sari-sari store owner’s profiles which comprise the age, gender

and educational background.

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The level of knowledge in financial management may vary depending on the age of the sari-

sari store owners. It’s like age which will help determine how experienced they were as an

owner and how they apply financial management to their store.

Male and female have different perception about a business and they both have their

weaknesses and strengths when making a decision. In the level of financial management,

gender will be a great factor to the magnitude of application.

Lastly will be the educational attainment. School learning will enhance the knowledge on

how to properly apply the financial management. Educational attainment especially when an

owner is a professional has great factor. Level of knowledge in financial management in

terms of investing, financing and operating should be measured. These terms will be the basis

on how to properly apply financial management. Investing will measure how an owner will

use its asset to grow much faster in a proper venture and exercising the most potential effort

of an asset. Financing will measure how to acquire own resources and the risks of it.

Operating will measure the productivity of the business.

Statement of the Problem

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The study generally aims to examine the knowledge level of sari-sari store owners in

financial management.

Specifically, this study shall seek answers to the following questions:

1. What are the demographic profile of Sari-Sari Store owners in terms of:

1.1 Sex

1.2 Age

1.3 Educational Attainment

2. What is the level of knowledge in financial management of sari-sari store owners in terms

of;

2.1 Investing

2.2 Financing

2.3 Operating

3. How does the sari-sari store owner's profile affect their level of financial management

knowledge?

Hypothesis of the Study

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Sari-sari store owners profile has a significant effect on the owners' financial management

knowledge.

Scope and Delimitation of the Study

This study is primarily focused on examining the level of financial management

knowledge of owners. The respondents were limited to sari-sari store owners residing in Sta.

Rita, Guiguinto, Bulacan through the process of purposive sampling. There will only be three

respondents for this study.

Definition of Terms

To further understand the study, some terminologies were given conceptual and/or

operational definitions.

Capital - In business refers to the sum of financial assets that are required to produce goods

or services. These funds can be used to initiate operations, meet daily expenses or grow and

expand the business.

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Enterprise - A project or undertaking that is especially difficult, complicated, or risky. A

unit of economic organization or activity. Especially: a business organization. A systematic

purposeful activity.

Financial management - Refers to applying management concepts to budgeting, forecasting,

managing, and controlling a company’s financial resources to achieve its objective. It aims to

maximize investors profit by optimizing the firm’s money usage.

Margins - In the business world, margin is the difference between the price at which a

product is sold and the costs associated with making or selling the product (or cost of goods

sold). Broadly speaking, a company's margin is its ratio of profit to revenue.

Profitability - a measure of an organization's profit relative to its expenses. Organizations

that are more efficient will realize more profit as a percentage of its expenses than a less-

efficient organization, which must spend more to generate the same profit.

Sari-sari Store/Retail store - A sari-sari store, anglicized as neighborhood sundry store, is

a convenience store found in the Philippines. The word sari-sari is Tagalog meaning "variety"

or "sundry". Such stores occupy an important economic and social location in

a Filipino community and are ubiquitous in neighborhoods and along streets.

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Retail shops - Business enterprise that sells goods directly to ultimate consumers. The goods

are generally sold at marked-up prices.

Residential areas - Land used as a permanent residence or domicile, such as a house,

apartment, nursing home, school, child care facility or prison, land zoned for such uses, or

land where no zoning is in place.

Convenience stores - Store with extended opening hours and in a convenient location,

stocking a limited range of household goods and groceries.

Retail industry - Companies that sell goods and services to consumers.

Micro small medium sized enterprise (MSME) - Classification used in many countries, to

categorize businesses based on their size and investment.

Chapter 2

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 Review of Related Literature

This section of the study presents the review of related literature and studies on the

local and foreign source, which added more relevance and depth of the research study.

Sari-Sari Stores

Sari-sari stores are small retail shops commonly found in residential areas across the

Philippines, selling a wide range of consumer goods, from food and beverages to household

items. These humble convenience stores (tindahan) have been around for many years; it is

believed that the first stores were built more than 500 years ago; it is a piece of the past that is

still present today and will be there in the future. The majority of Philippine towns are

characterized by home-based neighborhood shops, also referred to as "sari-sari stores"

locally. These are tiny to medium-sized trading establishments, similar to convenience stores

in the West, where customers purchase things sparingly. The retail industry in the Philippines

accounts for about more than 75% of all transactions done in the nation. It is one of the most

active economic sectors in the Philippines, with yearly growth rates that were close to 10%

from 2010 to 2015 (AC Nielsen, 2016).

Sari-sari stores as part of MSME’s

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Sari-sari stores are actually considered as “Micro, Small and Medium Enterprises” (MSMEs),

they are tiny enterprises characterized by the size of their investment, under Republic Act

(RA) No. 6977, “The Magna Carta for Small Enterprises”, as amended by RA No. 8289, the

Magna Carta for MSMEs is a significant piece of legislation that the Philippine Congress

passed in 1991 as Republic Act 6977 and later revised by Republic Acts. Its goal is to foster

the entrepreneurial spirit of Filipinos by fostering an environment that is friendly to MSMEs.

The Small and Medium Enterprise Development (SMED) Council, established under said

Magna Carta to aid in the promotion and development of MSMEs, organizes and oversees

Negosyo Centers alongside DTI as one of the administration's flagship programs.

According to (IJRFM, 2017) Micro, Small, and Medium-Sized Businesses (MSMEs) are

critical for current economic growth and the continuous development of a contemporary

knowledge-based economy. The significance of financial management, which is well

acknowledged, is a crucial factor in the successful growth and survival of MSMEs.

Financial Management

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Meredith (2003) said that financial management is one of the areas of management which

play the fundamental role to the fulfillment of any small business. In addition, Peel, Pope and

Wilson (2001), financial management and profitability can also be called as liquidity and

profitability. Amin (2010) acknowledged that there are troubles being faced by retailers that

hold back their success. Industry in India faced lack of power supply, lack of credit

management and corruption. Industry in India was plagued by a shortage of power, poor

credit management, and corruption.

Small enterprises, such as retail stores, can significantly help a country's growth. The size

does not matter because its distinctiveness of invention, drive, and expertise allows for

greater flexibility and faster decision making (Kropp, Lindsay, & Shoham, 2006).

Owning a small business offers advantages and cons. Advantages include the fact that you

cannot be fired; you can choose your own hours; and you can get extensive knowledge and

chances in business. Disadvantages include money and savings consumption, onerous

obligations, and an unpleasant experience with capital loss (Collins, 2013). If a small

business fails, the main reasons are a lack of strategy, inadequate money, and poor

management. When launching a small business, there are only two outcomes: success or

failure. Mismanagement will almost surely result in its own mortality due to its enormity, and

it cannot learn from its own mistakes (Longenecker et al., 2006).

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Common knowledge is that business owners rarely pay attention to financial concerns. The

reasons might be that they lack financial knowledge and abilities or that they are distracted

with other commercial operations like purchasing, production, and managing human

relations. As every aspect of a business' operations has a financial impact, financial

management is a vital and essential component of business management. Business may

collapse if critical financial management choices, such as those regarding working capital,

long-term capital budgeting, capital structure, and dividend policy, are not made on the basis

of reliable financial data and with the proper use of financial tools and processes. (IJRFM,

2017)

Investing

According to Cooley and Pullen (2001), businesses should have a cash management program

so that they can properly allocate the resources they have and spend them appropriately. In

order to avoid cash overhead and maximize its assets, use deposit certificates, treasury bills,

repurchase agreements, commercial papers, shares, bonds, and other investments

Small enterprises must invest their resources wisely if they want to avoid insolvency and

achieve positive cash flows (Wellalage & Locke, 2010). Small firms should invest more in

the quality of service they provide to their customers since customer satisfaction will be a

significant benefit in their operations (Peck, 2005).

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According to Zeitun, Tian, and Keen (2007), it is critical for a manager or owner of a

business to be informed about managing cash in business operations in order to achieve a

beneficial outcome. The investment function assesses a company effort, such as acquiring

fixed assets for use in the business (Brealey, 2006)

Operating

Retailers have the power to choose their own supplier. Retail and suppliers should collaborate

because they both deal with the distribution of goods (Pearson, 2013). According to the

findings of an Indian survey, the majority of retailers (86.50%) obtain raw goods from the

open market. Retailers should be convenient and create plans such as proper store

atmosphere, product variety and procurement, and appropriate product positioning within the

retail business. (Selvakumar & Muthumoni, 2011).

According to Pamaos (2014), sari-sari stores acquire their goods through "bagsakan," or

middlemen who buy in bulk from suppliers at regular and bulk discounts. According to

Selvakumar and Muthumoni (2011), in order to compete, retailers must be unique and

relevant to their customers' demands. The fundamental retailing method is to provide the

highest quality to the customer; this will properly lead the retailer to success.

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According to Reyes (2012), small business owners should understand how to manage the

outflow of their inventory, how much to accumulate, and when to buy items. Furthermore,

Nielsen (2012) highlighted that sari-sari store operators should innovate due to the rapid rise

of convenience stores and the presence of tough competition. Sari-sari establishments must

deal with the ever changing tastes of their client. Small businesses in India have certain

advantages, such as focusing on a relatively small market and facilitating the effective use of

capital and expertise that could otherwise go unutilized. (Shah & Khedkar, 2006).

According to Richardson (2004), people in Zambia choose to operate on an informal basis

because it is easier to trade outside of formal frameworks for registration .taxation and

regulation. For Ramakrishnan (2013), most of the small enterprises function weak because it

lacks proper computation of total expenses, total revenue, profit etc., for they do not keep an

organized record.

Financing

According to (Al-Afifi, 2019; Mittal & Raman, 2020). The most important factor when

starting or growing a business is the choice of funding. There are numerous external and

internal ways to finance small businesses, whether they go for the conventional route or try

something innovative.

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Obtaining a source of capital for a small business is a constant challenge for them most of the

time. This could be owing to the banks' low approval rate. Furthermore, defaults of good

companies are created by borrowers who utilize the cash for personal gain at the expense of

the company, causing banks to be more careful in scrutinizing loans to reduce defaults.

Malaysia's Central Bank. They introduced a micro-finance model that is suitable for small

businesses in Malaysia, which account for 80% of the firm. (Aris, 2007)

According to (Kuruppu & Azeez, 2016). The choice of financing is based on the owners'

preferences as well as the availability of funds in the financial system. According to

(Melesse, 2019) Since firms' willingness to participate in the credit market influences their

likelihood of getting external financing, it is crucial to distinguish between organizations that

are actually credit constrained and those that are not while researching access to external

credit restricting variables. In this context, a study on manufacturing businesses in Ethiopia's

Amhara Regional State found that the majority of businesses did not initially seek out

external finance due to a variety of factors.

According to (Mole & Namusonge, 2016) One of the determining factors of credit access is

interest rate. The cost of credit is determined by the interest rate applied to credit. The cost

credit is the sum that the borrower must pay in addition to the main amount of the loan.

Credit becomes more expensive when interest rates are high. High interest rates on credit

may make borrowing more difficult for MSSEs, which would reduce their access to credit.

High interest rates have a detrimental effect on MSSEs' ability to obtain debt funding from

financial institutions.

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Therefore, the less access to finance there is, and vice versa, the higher the interest rate is.

Owners use internal sources to avoid paying higher interest while keeping the aforementioned

in mind. The degree of intermediation will decrease with a higher interest rate in accordance

with the rule of demand and supply. Because financial institutions demand high interest rates,

MSSEs have less access to debt funding. When financing a firm, the owner should have a

strong standing in which it is their source of finances (Miculeac, 2013).

Age

Studies show that the association between an entrepreneur’s age and the performance of

SMEs are contradictory. Studies by (Davidsson, 1991; Storey, 1994), indicated that firms that

are managed by young owners or managers are more successful than older owners or

manager because they have more liveliness, ambitions, commitment to work long hours

whereas performance or advancement of firms is given little attention by older owners or

managers as they are likely to have reached their final goals. On the other hand, studies by

(Harada, 2003; Littunen & Virtanen, 2006) shows SMEs managed by older owner/managers

are more probably effective than those SMEs managed by younger owners or managers since

older managers/owners have more experience and have passed many hindrances, and thus

they are stronger and more confident.

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Gender

Another demographic factor that could influence credit management practices, as well as

micro-enterprises is gender. Kibera (1997), presented in his previous studies that women run

at least 70% of business enterprise. The performance gaps between male- and female-owned

businesses are further widened, in this opinion, by the socialization discrepancies between

men and women. To put it another way, female-owned businesses learn to organize and

create goods and services differently because women have different motivations, incentives,

goals, and modes of thought than males (Johnsen and McMahon, 2005).

Educational attainment

According to Febriyanti et al. (2016), The more time spent studying the business industry,

the more knowledge there is about consumer preferences or habits. By preparing students for

significant financial decisions, school-based education can be transformative. In 2012 and

2015, the OECD's Programme for International Student Assessment (PISA) discovered that,

on average, just 10% of 15-year-olds demonstrated the highest level of skill on a five-point

financial literacy scale. According to the OECD (2017), as of 2015, one in five pupils lacked

even the most fundamental financial knowledge.

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According to Amoros & Bosma (2014), the absence of business education and training

among small firm owners, managers and employees is the key reasons of SME failure in

South Africa, according to this report. As a result, it is clear that continuing business

education and training will assist SME members in updating, upgrading and maintaining

skills, knowledge and attitudes throughout their working lives, ensuring that their firms

prosper and remain viable.

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 Chapter 3

Methodology of the Study

This chapter presents the methods and techniques in the study, the respondents of the study,

the instruments, and the data processing and statistical treatment to answer the sub-problems

given in Chapter 1.

Research Design

The researchers undertook a qualitative investigation to meet the study's goal. The

Phenomenology research technique was appropriate because participant replies give a more

specific understanding of the owners' behavior and attitudes about financial management.

This phenomenological research explored and comprehended the owners' experiences using

information acquired from key participants who run a sari-sari store business in Brgy. Sta.

Rita.

Methods and Techniques

The researchers analyzed the owners' lived experiences with operating, investing, and

financing through semi-structured interviews. Semi-structured interviews were chosen for

this research study because they will allow individuals to elaborate, give the researcher

greater flexibility, range, and therefore the ability to extract more information from the

subject.

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Semi-Structured interviews permit scope for individuals to answer questions more on their

own terms than the standardized interview permits, yet still provide a good structure for

comparability over that of the focused interview (May 1997).

RESPONDENTS OF THE STUDY

The respondents of the study was the owners of sari-sari store who was selected using

purposive sampling.

Purposive sampling is a technique for identifying and selecting circumstances that make the

best use of limited research resources. It is used to select respondents who are most likely to

produce appropriate and meaningful data. (Campbell et al., 2020)

The Instrument(s)

In this study, the researcher was the primary research instrument. During the interview, the

researcher’s role was to elicit information.

In qualitative research, there are two types of instruments: primary instruments and secondary

instruments. According to Ary (2010), “In qualitative studies, the human investigator is the

primary instrument for data collection and analysis.” The primary instrument in this study

was the researcher themselves. The interview method will be used in this study.

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Data Gathering Procedure

The data was gathered through one-on-one interviews. The semi-structured questions was

asked to each of the respondents. The researchers collected data in the following manner:

• Video recording and audio recording was used as a process of recording interview data.

• The researcher asked permission from the selected respondents for video recording of the

interview.

• The data was collected through the recorded video and audio record taken during the

interview.

Plan for Data Analysis

The researcher thoroughly analyzed and transcribed the results of the interviews in

order to address the questions raised in the problem description. Since thematic analysis

places a strong emphasis on spotting, deciphering, and interpreting the patterns in qualitative

data, the researchers utilized it. The researchers was able to view qualitative data in a certain

way with the help of this analysis. Typically, it refers to a collection of texts, such as a

transcript of an interview or a collection of interviews.

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 Chapter 4

Results and Disccussion

This chapter presents analyses, and interprets the data collected in the study. For
clarity of presentation and consistency in the discussion, the data are presented following the
order and sequence of the questions raised in Chapter 1, (1)What is the demographic profile
of sari-sari store owners?; (2) What is the level of knowledge in the financial management of
sari-sari store owners; (3) What is the effect of sari-sari store owners profile on their level of
knowledge in financial management?

4. Results and Findings

Table 4.1: Sari-Sari Store Owners Profile

Variable Owners Characteristics Dominant Frequency Dominant %

15-24, 25-34, 35-43, 44-54, 55-64,

Age 55-64 3 60%
over 65

Gender Male;Female Female 4 80%

Educational Elementary Graduate, HS Graduate, College

3 60%
Attainment College Graduate Graduate

Table 1 summarized the owner's characteristics in terms of percentages, highlighting the

highest percentage indicating the owner’s attributes. Between the ages of 15 and 65, statistics
indicate that the majority of owners are between the ages of 55-64, showing that most of
them are old. Over half of the proprietors are female, showing that women are more self
employed than men. There is a greater proportion of owners who are college graduates.

As a result of a lack of employment opportunities, the study anticipated that the majority of
owners view self-employment as the best alternative to unemployment.

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