Home⇛Psychology and Education: A Multidisciplinary Journal⇛vol. 39 no. 2 (2025)

Cash Flow Mastery: Fueling Micro-Enterprises’ Financial Stability

Myffer Lamatao | Judith Sanchez

Discipline: Finance

 

Abstract:

Cash flow management is essential for sustaining operations and enabling growth, but microenterprises often struggle due to irregular income, limited resources, and high interest rates. These challenges can lead to cash shortages, operational instability, and increased risk of business failure, making effective financial strategies vital for their survival. The study examines the cash flow management of micro-enterprises in San Francisco, Agusan del Sur, and its impact on financial performance. Cash Flow Management Practices are measured using cash flow management techniques, financial literacy, access to financial services, record-keeping practices, cash flow sources and uses, and external economic factors. Financial Performance is evaluated by examining profitability, sustainability, and stability. Challenges encountered by micro-enterprises in implementing cash flow management practices and the enterprises’ coping mechanisms are also examined. The study employed a descriptive-correlational approach and surveyed 289 micro-enterprises respondents among the five (5) Poblacion Barangay of the Municipality. The findings revealed that the micro-enterprises in the locality moderately practiced the techniques of cash flow management having an overall mean of 3.24 which prompted the profitability, sustainability, and stability performance of micro-enterprises into oftentimes with a mean of 3.24. This shows a statistically significant relationship between cash flow management practices and the extent of financial performance with a p-value of 0.000. The study also revealed that microenterprises experience moderate challenges in employing cash flow management practices with an overall mean of 3.19 with coping mechanisms oftentimes practiced. Lastly, there is a highly significant difference in the challenges encountered by micro-enterprises when grouped according to the barangay. These findings highlight the importance of cash flow management practices in attaining profitability, sustainability, and stability. They also show the need for a comprehensive program catered to the needs of micro-enterprises to address the gap in cash flow challenges.



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