MJAMR

Cash Flow Management And Its Impact On Financial Performance Of Petroleum Companies In Uganda

Ahumuza Audrey


Abstract

The study aimed at the effect of cash flow management on financial performance of petroleum companies in Uganda. Extensive secondary desktop research was initially conducted, delving deeply into theoretical frameworks and empirical findings regarding the relationship between effective working capital administration and organizational productivity, liquidity, and profitability. Financial statements spanning 10 years were also meticulously analyzed for 5 major petroleum retailers to discern trends correlated between cash flow volatility containment and key performance metrics over time. The Pearson correlation coefficient between cash flow management and financial performance was 0.819. The significance value (Sig. 2-tailed) was 0.000, which was less than 0.05. This means the correlation between the two variables was statistically significant. The N value indicated that the correlation was based on 186 observations/data points for each variable. A Pearson correlation coefficient close to 1 indicated a strong positive linear relationship between the two variables. It was therefore recommended that petroleum firms in Uganda place greater strategic emphasis on cash flow management and view it as a top priority rather than just another operational metric. Senior leadership must implement robust cash flow policies, systems and controls throughout the organization to actively monitor cash inflows and outflows. Timely collection of revenue, judicious inventory levels and careful payment terms with suppliers can free up liquidity for profitable investment opportunities.

Keywords

cash flow management financial performance and petroleum companies
Metropolitan Journal of Academic Multidisciplinary Research

Cite This Article

Ahumuza Audrey (2024). Cash Flow Management And Its Impact On Financial Performance Of Petroleum Companies In Uganda. Metropolitan Journal of Academic Multidisciplinary Research, 3(1). https://journals.miu.ac.ug/pages/article.php?article_id=1230

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