Financial Management Practices of Small and Medium Enterprises in Quetta

Abstract

Small and Medium Enterprises play a vital part in the development of developing nations by contributing in the economy growth in multiple ways. The target of this study is to know the effects of financial management practices on the performance of SMEs in Quetta. Five financial management practices were selected as independent variables, i.e., Working Capital management, Capital structure management, Investment Appraisal practices, financial reporting, and accounting information system; on the other hand, the performance of SMEs is chosen as the dependent variable. The data of SMEs were collected from SMEDA, and 79 SMEs of Quetta City listed in the data were selected as the study sample. A structured questionnaire was used to collect primary data. Data were analyzed through SPSS, and the results of Descriptive Analysis, correlation analysis, and multiple regression analysis were obtained. Results show that there is a positive effect of financial management practices on the performance of SMEs. Among all of them, capital management practices have a significant positive effect on the performance of SMEs.