Liquidity and Investment Practices: Its influence Towards Financial Performance of MSMEs at Koronadal City

This research aimed to determine the influence of liquidity and investment practices on the financial performance of micro, small and medium-sized enterprises (MSMEs) at Koronadal City. This research aimed to determine the level of liquidity and investment practices of micro, small and medium-sized enterprises (MSMEs) at Koronadal City, as well as examine the significant relationship between liquidity and investment practice of MSMEs at Koronadal City. The majority of studies have primarily focused on the impact of single financial management choice on the financial performance of firms. On the basis of this assumption, there exists a knowledge gap about the collective strategic financial management strategies used by MSMEs at Koronadal City, hence necessitating the present research. This study used a descriptive research design in which a census of all the targeted population of 177 enterprises from a total of 318 registered MSMEs at Koronadal City was conducted. To test hypotheses on the relationship between variables, inferential statistical methods, such as correlation analysis using Pearson R, were used. The null hypotheses for liquidity practices were rejected, indicating a substantial relationship between liquidity practices and financial performance. Consequently, the null hypothesis was rejected as investment practices indicated a significant relationship with financial performance. Therefore, it is recommended that enterprises keep their profits in order to reinvest and achieve better returns on investments and shareholder equity. In addition, it is strongly recommended that MSMEs account for all company transactions or perform accounting on regular basis in order to effectively manage business operations. This study indicates the need for more research on economic variables other than financial management techniques that impact the financial performance of micro, small and medium-sized enterprises (MSMEs) at Koronadal city.