Influence of financial management practices on the cash flow management strategies and growth of micro-small enterprises in Babak District

Abstract

This research investigated the impact of financial management practices on cash flow management strategies and the subsequent growth of micro and small enterprises (MSEs) in Babak District. Despite their crucial role in economic development, MSEs often face challenges due to limited financial resources and managerial expertise. The study draws upon the Resource-Based View, Pecking Order Theory, and Agency Theory to examine the interrelationships between financial management practices, cash flow management, and business growth. To pick a sample size of 120 MSEs' a stratified sampling method was utilized to select a sample from the target population. Analysis of MSEs in Babak District reveals the presence of distinct financial management practices, with investment practices exhibiting the most robust emphasis, while accounting information system practices require further development. Cash flow management strategies are also evident, particularly in monitoring activities; however, aspects related to planning necessitate improvement. The study establishes statistically significant correlations between various financial management practices, cash flow management, and MSE growth.