Cash Management Practices and Performance of Small-Scale Enterprises in Kisumu County, Kenya
DOI:
https://doi.org/10.53819/81018102t3185Abstract
The study evaluated how well small businesses in Kisumu, Kenya applied their cash management strategies. The study achieved its objectives through three specific goals. First, the research studied how cash flow forecasting affected financial results. Second, it examined how cash budget practices influenced business outcomes. Third, the investigation explored how the cash conversion cycle affected small business operations. The research utilized information from the Miller-Orr Model, Beranek's Model, and the Baumol Model of Cash Management. In the study, descriptive research methodology was utilized to analyse Kisumu County, where 21,448 small businesses were located. Stratified simple random sampling techniques were applied to get 399 respondents in the study. Primary data was collected via semi-structured interviews, while the secondary data was retrieved from books, journals, and other unpublished literature. The research involved the use of qualitative and quantitative data analysis methods. Quantitative data analysis, with results shown through tables. Qualitative data were analysed using content analysis techniques, whereby emerging themes, patterns, and perspectives were systematically identified, categorized, and interpreted. The findings were subsequently presented in both narrative and descriptive prose formats to facilitate a comprehensive understanding of the participants’ views and experiences. Furthermore, all research activities were conducted in strict adherence to established ethical principles and research protocols. The study concludes that cash forecast has a post give significantly high affected on performance of SSEs in Kisumu County (p<0.01; r= 0.618; β = 0.446)., cash budget has a significantly positive effects of affected performance of SSEs in Kisumu County (p<0.01; r=;0.756 =0.168), cash conversion cycle has a positive significant strong effect of performance of SSEs in Kisumu County in, Kenya (p<0.01; r= 0.770; β= 0.599) and there is a significant effect of Cash investment on the performance of SSEs in Kisumu County, Kenya (p<0.01; r= 0.5.2.5; β=0.316). All the variables demonstrate that SSEs have adopted cash management techniques is and find them useful for performance improvement. The custody recommends that these enterprise should incorporate and update their cash flow forecasts to improve their planning processes and maintain sufficient liquidity, ensure that cash budgeting systems is adopted for more effective resource allocation and better control of their finances, ensure that cash flow management is improved through optimization, concentrate on making smart investments.
Keywords: Cash Budget; Cash Conversion Cycle; Cash Flow Forecasting; Cash Investment; Cash Management Practices; Financial Performance; Small Scale Enterprises
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