Financial management practices of micro, small and medium Enterprises in the Obuasi Municipality.
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Date
2016-08
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Publisher
KNUST
Abstract
This study was done to assess the of financial management practices in Micro, Small
and Medium Enterprises (MSME’s) in the Obuasi Municipality. The objectives of the
study were; to determine the extent of financial management employed by SMEs as to
these dimensions: to evaluate how MSME’s acquire their financial resources, to
examine how MSME’s anticipate their financial needs, to identify how MSME’s
allocate funds in their business, and to explore the challenges faced by MSME’s in
financial management practices. Questionnaires were appropriated to participants and
were the ones utilized for examination. The study used retrospective and prospective
designs together with descriptive design. The study notes that the most practiced
financial management practices by MSME’s in Obuasi Municipal are periodical budget
estimations, activity-based budgeting and financial analysis. This includes computation
of financial ratios and comparing their values with other business. The study notes that
some important financial management practices are not undertaken by the SMEs such
as drawing of financial statements on regular basis. The study reports that MSME’s
operating in the Obuasi Municipality perform some monitoring and control activities
which include recording of transactions of the businesses. The study brought up new
knowledge on how MSME’s apply financial management practices and the weaknesses
that were found out in their current operations hindering their efficiency in terms of
profitability and business growth. The recommendations from the study included; the
Ministry of Finance and Economic Planning, Bank of Ghana should provide a
favourable platform for MSME’s to access financing that can enable them to run their
businesses at a reasonable cost of financing and sensitize also, owners of MSME’s on
the relevance of bookkeeping, financial reporting and analysis. The study brought up
new knowledge on how MSME’s apply financial management practices and the
weaknesses that were found out in their current operations hindering their efficiency in
terms of profitability and business growth.
Description
A Thesis submitted to the Department of Accounting and Finance in partial fulfilment of the requirements for the degree of master of business administration(finance option).