MJAMR

Credit Management, Cash Flow Management And Financial Performance Among Petroleum Companies In Uganda

Atuheire Alexander


Abstract

World over, the issue of financial performance has attracted a lot of debate among scholars especially after the collapse of world giants like World Com, Enron, Adelphia, among others. Similar situations in Uganda have seen institutions in the petroleum sector register poor financial results. Accordingly, a study was conducted to examine the relationship between credit management, cash flow management and financial performance of companies within the petroleum sector of Uganda. The study was guided by the objectives of assessing the relationship between credit management and financial performance, identifying the relationship between cash flow management and financial performance as well as establishing the relationship between credit management, cash flow management and financial performance among petroleum companies in Uganda. Literature for different scholars was reviewed with a view of identifying the agreements and disagreements among scholars. Using a cross sectional research study and employing a quantitative research design, the study was able to solicit views from 156 staffs of petroleum companies in Uganda. The study used close-ended questionnaires for data collection after which data was sorted, edited, and entered into SPSS to pave way for data processing, analysis and interpretation. The study indicated that there was a statistically significant positive correlation between credit management and financial performance within petroleum firms and that the nature of the correlation is strong. In relation to cash flow management and financial performance, the study revealed a moderate and significant positive correlation between the variables. Moreover, the study findings revealed that both credit management and cash flow management were significant predictors of financial performance within petroleum firms. Based on these findings, the researcher recommended that petroleum companies should put in place effective credit policies to boost financial performance through analyzing the entire cash cycle and designing procedures that extend credit sensibly, keep an eye on accounts receivable and collect overdue bills promptly. Also, petroleum firms should design employee retention strategies to ensure that they keep experienced employees for longer. Based on the study limitations, the study proposed the effect of employees’ skills and seniority on financial performance, and the effect of organizational characteristics on financial performance within firms as areas for further study.

Keywords

Credit Management Cash Flow Management and Financial Performance Among Petroleum
Metropolitan Journal of Academic Multidisciplinary Research

Cite This Article

Atuheire Alexander (2024). Credit Management, Cash Flow Management And Financial Performance Among Petroleum Companies In Uganda. Metropolitan Journal of Academic Multidisciplinary Research, 3(1). https://journals.miu.ac.ug/pages/article.php?article_id=1213

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