THE IMPACT OF FINANCIAL STRUCTURE ON FINANCIAL SUSTAINABILITY OF SMALL AND MEDIUM SIZED ENTERPRISES IN MUKONO TOWN.
| dc.contributor.author | Leon Godfrey Byarugaba | |
| dc.date.accessioned | 2024-12-04T13:11:21Z | |
| dc.date.available | 2024-12-04T13:11:21Z | |
| dc.date.issued | 2024-09-05 | |
| dc.description.abstract | Financial structure refers to a mix of debt and equity that a company uses to finance its operations whereas financial sustainability refers a business's ability to consistently have enough reserves to cover unexpected expenses without relying on borrowing or compromising essential services. This study aimed at to find out the impact of financial structure on financial sustainability of SMEs in mukono town. The objectives of the study were, To examine the impact of short-term debt levels on financial sustainability of small and medium sized enterprises, to assess the relationship between long-term debt levels and financial sustainability of small and medium sized enterprises and to examine the influence of equity on financial sustainability of small and medium sized enterprises. The sample size of the study was about 60 SMEs and the following were discovered the following, a significant majority 90% find equity financing preferable to debt financing, with 28%. While 46% of respondents acknowledge that equity investors bring valuable expertise, a notable 38% weren’t too sure. In terms of financial risk, 60% believe equity financing helps reduce it, though 20% disagree. Finally, 42% of respondents feel that equity investors demand significant control over business operations, with 32% expressing neutrality and a small minority 24% were not agreeing. A majority 64% agree that their business has experienced revenue growth over the past three years, with 22% strongly agreeing. Some of the conclusions included Short-term Debt, while its essential for daily operations and liquidity management, short-term debt is a double sided, it provides necessary funding but also poses significant risks to financial sustainability of SMEs in mukono town, long-term debt has been beneficial for business expansion and stability, but its associated costs and risks prove to be challenging to SMEs, making it a less favourable option for some businesses, equity financing is preferred by SMEs as it reduces financial risk. However, the potential for loss of control due to the involvement of equity investors is a notable drawback and some of the recommendations included, short-term Debt Management, SMEs in mukono should carefully assess their reliance on short-term debt, balancing the need for liquidity with the associated risks and Implementing strict financial management practices can help mitigate these risks and the long-term Debt Strategy, SMEs in mukono should consider long-term debt for business expansion and stability but should be cautious of the costs involved. It is recommended that businesses negotiate favourable terms and conditions to minimise the financial burden | |
| dc.identifier.uri | https://hdl.handle.net/20.500.12311/2409 | |
| dc.language.iso | en | |
| dc.publisher | Uganda Christian University | |
| dc.title | THE IMPACT OF FINANCIAL STRUCTURE ON FINANCIAL SUSTAINABILITY OF SMALL AND MEDIUM SIZED ENTERPRISES IN MUKONO TOWN. | |
| dc.type | Thesis |