The Role of Cash Management on the Financial Performance of Organisations in Masaka Municipality: a Case Study of Hotel Brovad (U) Limited

Abstract

Cash management is a fundamental approach to an organization and has a strong impact on the financial performance of organizations. (Bobitan and Mioc, 2011) The researcher focused on examining the role of cash management on the financial performance of organizations; a case study of Hotel Brovard (U) Ltd. The objectives of the study included, to establish the relationship between cash collection and financial performance of Hotel Brovard, examine the effects of cash disbursement and financial performance of Hotel Brovard and to find out the effect of cash budgeting on the financial performance of Hotel Brovard. The study was conducted using the monetary theoretic theory, financial theoretic theory and operational theory as developed by Kytonen, (2002) In order for the researcher to have an in-depth study, the study took a descriptive case study research design a case study of Hotel Brovard, to establish the relationship between the independent variable, cash management, with the dependent variable, financial performance. Correlation was carried out to determine the relationship between the independent variables and dependent variable and results revealed that cash collection had the highest correlation coefficient 0.767, followed by cash disbursements with 0.760 and lastly cash budgeting with 0.680 to the financial performance. The findings revealed that cash collection affects the financial performance of Hotel Brovard, Cash disbursement also has a great impact on the financial performance of Hotel Brovard and lastly also cash budgeting has a great effect on the financial performance of organizations. However it can be said that out of all the cash management tools used cash collection has the most significant influence and plays a great role in determining the financial performance of Hotel Brovard according to the respondent’s views The recommendations to Hotel Brovard included, continuation to uphold the variables to continue with a sound financial performance, continuation with practicing of cash collection, cash disbursement and cash budgeting techniques. Furthermore, Hotel Brovard should continue carrying out cash budgets, preparing these budgets depending on the needs of the different departments and should also compare planned results with actual results that to attain financial performance.

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