Financial management practices and profitability of business enterprises in Obuasi.

Thumbnail Image
MAY, 2016
Journal Title
Journal ISSN
Volume Title
Business enterprises play a key role in the growth of the Ghanaian economy. These enterprises contribute to the creation of jobs. However, to ensure survival and efficient operations, firms need to make enough profit on capital invested and ensure financial management practices. This study therefore investigates the impact of financial management practices on the profitability of business enterprises in the Obuasi Municipality. The study focused on two financial management practices, working capital and capital budgeting management. Primary data was collected by using questionnaire from ninety-eight enterprises. The study found that business enterprises profitability (measured by using return on sales) is related to financial management practices. The study also revealed that working capital management has a positive and significant effect on the profitability of business enterprises. The study recommends financial managers or owner managers should pay much attention to their financial management practices due to its positive effect on profitability of the firm.
A thesis presented to the Department of Economics in partial fulfilment of the requirement for the award of degree of Master of Science in Economics.