IIARD International Institute of Academic Research and Development

INTERNATIONAL JOURNAL OF ECONOMICS AND FINANCIAL MANAGEMENT (IJEFM )

E-ISSN 2545-5966
P-ISSN 2695-1932
VOL. 3 NO. 1 2018

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Budgetary Control and Financial Performance of Small and Medium Sized Enterprises in Rivers State

L. A. Nwanyanwu Ph.D & Ogbonnaya, Agatha Nkiru

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Abstract

This study examined the relationship between budgetary control and financial performance of Small and Medium-sized Enterprises in Rivers State. A population of 74 members list (manufacturing, Construction & engineering and services) of Port Harcourt Chambers of Commerce and sample size of 63 was determined using Taro-Yemen formula. Both primary and secondary data were used, where the hypothesis testing was mostly based on the primary data, and secondary data used in supportive role. Management accounting practices were studied from two dimensions, budgetary control and Marginal Costing while financial performance was measured by Net profit and Return on equity. Technology was employed as the moderating variable. Data were analyzed by using both parametric and non-parametric techniques complementarily. The findings showed that there is a significant relationship at 5% between budgetary control and financial performance. It is the conclusion of this study that budgetary control can be used to drive growth and sustainability of Small and Medium- sized Enterprises in Rivers State. The study recommends that Trade Associations and organized private sectors like the Port Harcourt Chamber of Commerce, Mines & Industries, Manufacturers Association of Nigeria, etc. should periodically organize sensitization workshops for Small and Medium-sized Enterprises on the benefits of implementing budgetary control in their businesses. It is also recommended that private-public-partnership sponsored internship programmes should be established to serve as pool of skilled manpower for Small and Medium-sized Enterprises whose recruitments cannot otherwise be afforded by Small and Medium-sized Enterprises.

keywords:

Budgetary Control, Net Profit, Return on Equity, Small and Medium Sized Enterprises

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