Financial management practices and performance of petroleum companies in Uganda: A case of Hass Petroleum Uganda

Abstract

The study was set out to examine financial management practices and performance in the petroleum companies, using a case of Hass Petroleum Uganda. The study was based on three objectives: establish how liquidity management practices advances performance of Hass Petroleum; to examine whether budgeting and budgetary control improves performance and how working capital management improves performance of Hass Petroleum Uganda. The study used a population of 320 selected from Hass Petroleum Uganda staffs and a sample of 178 respondents was selected using Neumann’s formula (2000), but the study focused only on 176 respondents who returned questionnaires for analysis. Cross sectional research design was used and both quantitative and qualitative approaches of data collection were used. The used questionnaires, interview guide and documentary checklist to collect data from the field. Data were analyzed using descriptive statistics and multiple regression analysis; where the statistics proved that R2=0.786; significance level was found and the hypothesis testing proved that there is a positive relationship between financial management practices and performance in Hass Petroleum Uganda.

The multiple correlation results of .788 or 78.8% revealed that effective liquidity management practices; proper budgeting and budgetary controls and working capital management enhance performance of Hass Petroleum Uganda

The study concluded that effective liquidity management practices have improved financial performance; budgeting and budgetary control and working capital management have enhanced financial performance of Hass Petroleum Uganda.

The study recommended that petroleum companies should adopt a general framework for liquidity management to assure a sufficient liquidity for executing their works efficiently, and there is a need to make an analytical study of the liquidity evolution rates to assess the petroleum companies’ ability to achieve a balance between sources and uses of funds.