Capital structure and financial performance of barangay micro business enterprises in selected areas of Cavite / by Danica Grace E. Co, Benedict A. Dollentas, and Milky T. Valenzula.

Thesis (Bachelor of Science in Business Management Major in Financial Management) Cavite State University.

Includes bibliographical references.

College of Economics, Management, and Development Studies (CEMDS)

CO, DANICA GRACE E., DOLLENTAS, BENEDICT A., and VALENZUELA, MILKY T. Capital Structure and Financial Performance of Barangay Micro Business Enterprises in Selected Areas of Cavite, Bachelor of Science in Business Management, Major in Financial Management, Cavite State University, Indang, Cavite, June 2018. Adviser: Prof. Sherrie Rhose M. Matel.
The study was conducted to present and discuss the capital structure and financial performance of Barangay Micro Business Enterprises (BMBE) in selected areas of Cavite. Specifically, it also sought answers to the following: determine the business profile of barangay micro business enterprises; determine the capital structure; determine which factors affect the capital structure decisions in terms of business risk, business tax position, financial flexibility and managerial aggressiveness; determine the financial performance of 244 barangay micro business enterprises in selected areas of Cavite; and ascertain the relationship of business profile to the capital structure; ascertain the relationship of business profile to the financial performance and ascertain the relationship of capital structure to financial performance of barangay micro enterprises in Cavite. Primary data was gathered through survey questionnaires which was adapted from the study of Cueno and Escover (2016). The survey questionnaires were given to the selected owners of barangay micro business enterprises. The researchers used Slovin's formula to determine the number of samples drawn from the total population and stratified random sampling technique was used for the selection of actual number of participants. The benchmark of financial ratios from CSIMarket (2017) was used to determine the financial performance of barangay micro business enterprises.
Based on the results, the majority of the 244 barangay micro business enterprises in Cavite were in retail business (59%) and had one to three employees (85%). Most of them were operating ranging from 1 to 5 years (64%). The majority of their capital came from investment and loan that ranging from P 1,000 to P 500,000. Eighty-three percent (83%) of their capital got from personal investment and five percent (5%) from loan.
Among all the factors affecting capital structure decisions of barangay micro business enterprise owners in terms of business risk, business tax position, financial flexibility and managerial aggressiveness, business risk affects the capital structure decisions the most.
The results showed that BMBE had a high gross profit margin of 73 percent above the 39.52 percent average GPM (CSIMarket, 2017), operating profit margin got an average of 24 percent higher than 12.67 percent OPM (CSIMarket, 2017), net profit margin had an average of 18 percent above the 7.13% average NPM (CSIMarket, 2017) and return on asset obtained an average of 18 percent higher than 3.13 average ROA (CSIMarket, 2017).
The results showed that sources of capital had a positive relationship to operating profit margin and return on assets. In addition, the current capital showed a negative relationship to the gross profit margin, operating profit margin, net profit margin and return on assets.

Submitted to the University Library August 14, 2018 T-7531