Home⇛Journal of Interdisciplinary Perspectives⇛vol. 3 no. 6 (2025)

Financial Management Practices and Business Performance of Micro and Small Enterprises in the Food Retail Industry

Leslie A. Deligero | Ma. Teresa B. Ballados

Discipline: business studies

 

Abstract:

The research problem highlights the significant challenges confronting micro and small enterprises (MSEs), specifically within the food retailing sector, resulting from financial constraints, inflationary pressures, and increasing costs. This study investigates the extent of financial management practices, specifically costing, budgeting, and financing, and their effect on the business performance of 136 micro and small enterprises (MSEs) within the food retailing sector of Enrique B. Magalona as a second-class municipality in the province of Negros Occidental. Using a descriptive-correlational research design, data were collected through an adapted questionnaire administered to a stratified sample of business owners and managers. Statistical analyses were utilized to assess the relationships and differences in financial management and performance indicators, including mean, standard deviation, Mann-Whitney U test, and Spearman's rho correlation. The principal findings reveal that while MSEs demonstrate a good grasp of costing and budgeting practices, their overall business performance remains inconsistent. Significant variations in performance were noted across different business profiles, particularly concerning the number of years in operation and employee count. Notably, a weak correlation was observed between the extent of financial management practices and business performance, suggesting that MSEs may struggle with practical implementation. The study concludes that a robust focus on financial management is essential for enhancing profitability and operational efficiency. Recommendations include investing in training programs to improve the regular application of financial practices and developing tailored strategies for better cash flow management.



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