The impact of cash management on organizational performance. A case of SMEs · Electronic Theses and Dissertations

Author

Masarirambi, Simon

Title

The impact of cash management on organizational
performance. A case of SMEs

Abstract

The research was focusing on the impact of cash management on the overall performance of small
and medium-sized businesses in Bindura town. The objectives of the study were to identify
challenges being faced by SMEs in managing cash, to establish cash management techniques, they
use to hold optimum cash and determine the effect of cash management on Profitability. The aim
was to come up with solutions of efficiently and effectively handling management of cash in these
small businesses especially in this economy characterized by high interest rates, high inflation
rates and high exchange rates so as to improve performance of smes financially such as in terms
of net profit margin. Questionnaires were used to obtain data from a sample of 166 smes in Bindura
town from the sample only 127 managed to respond thereby providing a response rate of 76%, in
addition to this the random probability sampling technique was used to obtain the sample from a
total population of 738.The validity and reliability of the data was tested through SPSS version 20
and the reliability was found to be 0,879 which is recommend by this software and also a pilot
study was done on few smes to ensure the questionnaire was user friendly, free from errors and
bias so that necessary adjustments can be done on the questionnaire to make it line with the
research objectives and to yield the reliable expected outcome. The participants were consisting of
the smes in grocery shops and food outlets, clothing, electrical gadgets and a combination of all.
Data gathered or obtained from the research was presented through the use of bar graph and tables.
Following the research findings, it was proved that there is a positive relationship between cash
management and the level of net profit margin although some practices or techniques of managing
cash were insignificant or have less impact on the net profit margin as supported by the results
obtained from the regression analysis. The research recommends that future research must be done
considering smes in the whole country of Zimbabwe since this one is considering those in Bindura
only.

Date

2023

Publisher

BUSE

Keywords

Cash management

Organisational performance

Supervisor

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