MJAMR

Petty Cash Management and Financial Performance of Organizations, a Case Study of MTN Uganda, Lugogo Branch

Odeke Nicholas Emmy, Kirwisam Matovu


Abstract

This study was an attempt to examine cash management and financial performance of an organisation, a case study MTN Uganda, Lugogo branch. The key objective was to examine the impact of cash management and financial performance on an organization. The study followed a qualitative research approach, interviews with the General Managers, Internal Auditors, Chief Accountants, Human Resource Managers and Employees. This serves to demonstrate opportunities for and cause of the poor cash flow management and the financial performances in an organization. This study was backed by the theory; Trade-off Theory. According to the tradeoff theory, firms considered the marginal benefits and cost of holding cash to maximize the shareholder’s wealth (Dittmar et al., 2003). The benefits of cash holding stem from the theory of Keynes (1936), concerning the motive of liquidity assets: Transaction cost motive, precautionary motive, and speculative motive. In line with the transaction cost motive, holding cash allow firms to avoid or save transaction costs to raise funds or to liquidate assets. The success of any business venture is predicated on how the management has planned and controlled its cash flows. Cash shortage disrupts the firm’s smooth operation and can even lead to insolvency. Excessive cash will tie down unnecessarily long-term capital with a result that the return on capital employed will be low. Thus, cash management assumes more significance than other current assets because cash is the most important asset that a firm holds. Therefore, this study shall examine the impact of cash management and the financial performance on an organization.

Keywords

petty cash management financial performance and organizations
Metropolitan Journal of Academic Multidisciplinary Research

Cite This Article

Odeke Nicholas Emmy & Kirwisam Matovu (2023). Petty Cash Management and Financial Performance of Organizations, a Case Study of MTN Uganda, Lugogo Branch. Metropolitan Journal of Academic Multidisciplinary Research, 2(11). https://journals.miu.ac.ug/pages/article.php?article_id=1495

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