International Journal of Research in Finance and Management
2019, Vol. 2, Issue 1
Financial performance adopted by sme’s in the import sector of Ghana
The main objective of the study is to examine the financial performance by describing the financial measures adopted by SME’s in the import sector of Ghana. The study adopted a mixed method approach (that is quantitative and qualitative). The units of analysis were the members or elements of the population, and are Small and Medium Enterprises in the import Sector of Ghana. It was revealed that, poor accounting records keeping is a major challenge to the management SMEs, lack the resources to manage their trade debtors (receivables) effectively, lack proper debt procedures, such as prompt invoicing and sending out regular statements, lack of market power which leads to weak position when negotiating credit terms with large businesses, lack of financial management skills which often create problems in managing stock in an efficient and effective way was also revealed by majority of the respondents as a major problem. The study found that most of the SMEs used financial ratios to measure their financial performance, but to a very limited extent. Very few ratios were used by individual SMEs and most of the ratios used were not the best indicators as mentioned in the literature. The study is the first of its kind as it concentrates on import sector SMEs in Ghana.