An Assessment of Financial Management Practices Among Micro, Small, and Medium Enterprises (MSMEs) in the Retail Sector in Nueva Ecija

Abstract

Abstract: This study assessed the financial management practices of Micro, Small, and Medium Enterprises (MSMEs) in the retail sector of Nueva Ecija, focusing on budgeting, working capital, record-keeping, financing decisions, and cash flow management. Using a descriptive-quantitative design, 150 MSME owners and managers were surveyed through a validated questionnaire. Results showed that most MSMEs are microenterprises under sole proprietorships with fewer than five employees. Findings revealed strengths in budgeting adjustments, managing supplier relationships, and aligning financial decisions with business goals. However, gaps were noted in budget reviews, inventory control, compliance with record-keeping standards, and cash flow forecasting.         The main challenges encountered included regulatory compliance, absence of modern accounting systems, financing constraints, and limited manpower. Correlation analysis indicated significant negative relationships between enterprise size, workforce, and effectiveness of working capital, record-keeping, and cash flow practices. The study concludes that while MSMEs value financial management, limitations in resources and knowledge hinder full implementation. Recommendations include financial literacy programs, simplified tax processes, digital adoption, and improved access to financing to enhance MSME sustainability.