Capital formation and its effects on financial performance and risk management of merchandising enterprises in Cavite /
by Helen Grace V. Araza, Shaery Mae D. Magno, and Alyssa B. Rotubia
- Indang, Cavite : Cavite State University- Main Campus, 2018.
- xxiv, 106 pages : illustrations ; 28 cm.
Thesis (Bachelor of Science in Business Management) Cavite State University
Includes bibliographical references.
College of Economics, Management and Development Studies (CEMDS), Department of Management College of Economics, Management and Development Studies (CEMDS), Department of Management
RAZA, HELEN GRACE V.; MAGNO, SHAERY MAE D. and ROTUBIA, ALYSSA B. Capital Formation and its Effects on Financial Performance and Risk Management of Merchandising Enterprises in Cavite. Undergraduate Thesis. Bachelor of Science in Business Management major in Financial Management. January 2018. Thesis Adviser: Mr.Zandro M. Catacutan. The study sought to find out the capital formation and its effects on financial performance and risk management of merchandising enterprises. It was conducted from March to November 2017 in selected cities of Cavite. This industry became the pivot of the study for its substantial contribution in the sectoral distribution in Micro, Small and Medium Enterprises. Furthermore, it generated the most number of jobs in the Philippines. Up until now, the recurrent debate on capitalization and its serious constraint towards growth and development is of great consideration in starting a new venture. Apart from this, managing a business involves handling risks and the progress of its impact on financial performance. This paper aimed to determine the business profile, compositions of capital formation, level of financial performance and risk management. This also constituted an effort to ascertain the analytical relationships and significant differences among variables. Descriptive and correlational research designs and probability sampling technique were used in the study. A total of 99 merchandising enterprises were surveyed to come up with the results. Descriptive tools were used to describe the data gathered; while, cross tabulation and Pearson Correlation Coefficient were used as statistical tool to find the relationship in the study. The results obtained reveal that majority of merchandisers financed their initial capital with personal savings and made use of business income to facilitate daily operations; these could be the reasons why owners perceived greater likelihood of occurrence for those risks that could jeopardize their investment. Merchandisers refrain from having obligations to external parties. Furthermore, they also exhibited the ability to control their costs efficiently and effectively in order to generate enough profit to cover operating expenses. They also showed a competitive performance in converting sales into actual profit and yield higher return for capital employed. The researchers found statistical evidence suggesting a positive link between financial performance and risk management, as the risk was being mitigated it created a cumulative effect on its performance. Likewise, majority of the variables proved to have a considerable effect with one another.