Financial Management Practices of Selected Agribusiness Enterprises in Marinduque

Abstract

Financial resources, being the lifeblood of any enterprise, when utilized and managed efficiently result to optimal business performance and survival in times of financial crisis. Hence, the paper sought to assess the financial management practices of selected manufacturing agribusiness under the Small Enterprise Technology Upgrading Program (SETUP) and Grants-In-Aid (GIA) programs of the Department of Science and Technology (DOST) Marinduque. The study used descriptive methods in gathering and analyzing data with the aid of a survey questionnaire and interview guide. Out of the 35 participating enterprises, 13 or 42% are GIA and 18 or 58% are SETUP. Using non-financial descriptors, the analysis resulted to the following mean values interpreted as very satisfactory: record keeping and management (3.81), profitability (3,64), sales (3.65), and income (3.57) while mean values for liquidity (3.39) and leverage (3.15) are interpreted as satisfactory. The majority of the enterprises do not have regular bookkeepers. For GIA recipients, treasurers are assigned, while under SETUP, part-timers are hired occasionally or every end of the year to prepare Financial Statements. Financial management practices need further attention. Thus, beneficiaries of GIA need to: a) install a proper auditing policy for checks and balances, and b) increase sales to generate higher income. For SETUP, there is a need to manage receivables so as not to escalate and to avoid bad debts. The practice of applying credit to finance production and maximize government loans and grants is acceptable, but the use of credit to finance daily production can be used as a leverage to a) grow the business, b) increase available cash to finance other needs, c) increase trust relationship with the lenders to manifest positive firm performance in paying debts, and d) minimize the risk of bankruptcy.