A STUDY ON WORKING CAPITAL MANAGEMENT: INFLUENCE ON THE FINANCIAL PERFORMANCE OF MICRO, SMALL AND MEDIUM ENTERPRISES IN MALUNGON, SARANGANI

Working capital management is important for businesses to get better financial performance. This study examines whether MSMEs in Malungon, Sarangani have working capital management and the influence of working capital management on their financial performance. The study used a quantitative research approach to determine the relationship between working capital management and financial performance. A sample of 30 MSMEs registered and operating in the year 2021 was used in this study, and 30 answers were received in all. The research acquired data through a questionnaire. Cash Management, Inventory Management, Receivable Management, and Payable Management were the Working Capital Management components employed in this study. The financial performance was measured using the Return on Assets (ROA). Multiple regression analysis was performed to test the relationship between working capital management and financial performance of MSMEs in Malungon, Sarangani. According to the findings of the survey, 100 percent of the respondents have good working capital management practices. However, among all 30 respondents, there were five (5) and seven (7) respondents who did not practice receivable and payable management, respectively. Furthermore, 86.7% out of 30 business owners indicate a good return on assets for the year 2021. From the multiple regression result, it shows that cash management practice has significantly affected the financial performance of the Micro, Small, and Medium enterprises in Malungon, Sarangani (r =.399, p =.029). Inventory management, receivable management, and payable management, on the other hand, did not significantly influence the financial performance of MSMEs in Malungon, Sarangani. Thus, with the data presented, results revealed that working capital management practices do not significantly influence the financial performance of the Micro, Small, and Medium enterprises in Malungon, Sarangani (r =-264, p =.158).