Financial management practices and profitability among selected SMEs in Panabo City

Abstract

The study aimed to determine the relationship between financial management practices and profitability of selected SMEs in Panabo City. 31 participants of SMEs in Panabo City were the respondents of this research. The researchers used descriptive-correlation method and convenient sampling technique to determine the number of respondents. The statistical tools used were mean and pearson-r. The result revealed that the level of financial management practices of SMEs in Panabo City in terms of investment practices, liquidity statement, financial control and financial reporting practices was very high. For the level of profitability of SMEs in Panabo City in terms of inventory holding period, accounts receivable period, account payable period and cash conversion cycle was very high. Since the result of this study concludes that financial management practices and profitability in Panabo City is very high, the researchers strongly recommend to continue and enhance the activities, seminars and programs in order, to keep the SMEs owners updated the new trend and to sustain the very high and good performance. Therefore, it was found out that there was a significant relationship between financial management practices and profitability of SMEs in Panabo City. The computed r-value is 0.564 and associated with the P-value of 0.00, which is less than 0.05. It simply means that the null hypothesis is rejected.