Financial management practices and business profitability among small & medium scale enterprises (SMEs) in the media industry of Uganda. A case of Buganda broadcasting services (BBS) television.

Abstract

This study assessed the effect of financial management practices on business profitability among Small & Medium Scale Enterprises (SMEs) in the Media Industry of Uganda. A Case of Buganda Broadcasting Services (BBS) Television. The study specifically examined the effect of working capital management on business profitability of BBS Television, assessed the effect of cash flow management on business profitability of BBS Television, investigated the extent at which cash budgeting influence business profitability of BBS Television and examined the extent at which working environment and regulatory policy influence financial management practices and business profitability of BBS Television. The study adopted descriptive and case study research design and used both qualitative and quantitative approaches were used. A sample of 62 respondents was selected to participate in the study. Data was obtained using a structured questionnaire and interview guide for technical staff and key informants and there after analyzed using descriptive and inferential statistics for quantitative data while thematic content analysis was used for qualitative data. The findings of the study revealed that business profitability of BBs Television is explained by financial management practices in form of work capital management, cash flow management and cash budgeting mechanisms. Variations in business profitability of BBS Television was attributed to working capital management, variations in business profitability of BBS Television was attributed to cash flow management and variations in business profitability was attributed to cash budgeting. Basing on the findings and discussion, it can be deduced that financial management practices of SMEs (work capital management, cash flow management and cash budgeting mechanisms) in the media industry play a very significant role in their profitability and general performance. It is therefore recommended that management in particular needs to pay close attention to their working capital dynamics because these dynamics have a noteworthy effect on their profitability levels, Management of SMEs in the media industry, should ensure cash flow management for profitability and growth of these SMEs, industry should also monitor stock such that they are able to know what to add or what not to stock and should involve all stake holders like heads of departments and other technical staff in the budgeting process at the beginning of each financial year. Further research should be conducted in another media companies both public and private in Uganda and East Africa as a whole and on the effect of the internal control systems and staff development on performance SMEs in the Media Industry of Uganda.