The Role of Financial Statements to the Financial Performance of Small and Medium Sized Entreprises Case Study: Selected Sme’s in Masaka Municipality

Abstract

The research was about the role of financial statements to the financial performance of SME’S in Masaka Municipality. The general objective of the study was to find out the role of financial statements to the financial performance of Small and medium sized businesses in selected SME’s in Masaka Municipality. The specific objectives were to examine the role of keeping a balance sheet, an income statement and cash flow statements to the financial performance of SME’s in Masaka municipality and the research study covered a period between 2017 to 2018. The case study research design was used in the research where a target population of 130 people was expected with 97 respondents as the sample size. A simple purposive sampling technique was used. The collected data from the questionnaires was edited, coded, tabulated and analyzed and there after simple descriptive statistics, frequencies and percentages were computed, discussed and presented. The sample population was composed of 54 males and the 43 were females. The majority were in the age bracket of 20- 40 years and those above 60 being the least. In addition of the respondents were dominated by degree holders who were 41, diploma holders who were 33 people who were also12 people other qualifications. It was found out that most businesses keep all the three financial statements considered, some few keep two sets and some do not keep the financial statements at all. Continued training of finance officers of accountants about financial statements Departmental or branch financial statements should be requested by the head quarters in order to encourage many of the SME’s prepare and keep financial statements.

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