Universal Journal of Accounting and Finance Vol. 9(3), pp. 336 - 346
DOI: 10.13189/ujaf.2021.090307
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Budgeting Practices: Its Impact on the Profitability of Small and Medium Enterprises in Isabela


Christian Philip A. Fortuna *
College of Business and Management, Isabela State University, Cauayan Campus, Cauayan City, Isabela, 3305, Philippines

ABSTRACT

A budget is an economic tool for realizing and facilitating the vision of an organization. If a budget is to serve as a useful tool, then it is essential that all phases of budgeting are appropriately linked and managed [1]. This study made use of the three types of research by methods: descriptive research to gather the profile of respondents (size and type of business), budgeting practices (manager's participation, linking budget development to strategy, rational allocation of resources, flexibility continuous budget, and reduction of complexity and use of information technology) and level of profitability; causal-comparative research to determine differences between variables; and correlational research to determine the degree of relationship between variables and for hypothesis testing. Primarily, the 331 respondents of the study were from the four-commercial centers in Isabela, broken down as follows, Cauayan City (116), Ilagan City (58), Santiago City (121) and Municipality of Roxas (36). Results of the study showed that test of difference in respondents' budgeting practices regarding managers participation, reduction of complexity and use of information technology significantly differed between small and medium enterprises. Additionally, when the respondents were grouped according to the type of business, merchandising and servicing business varies with manufacturing business budgeting practices regarding managers participation and linking budget development to strategy. Conversely, small-sized and medium-sized businesses significantly differ as regards their level of profitability. Furthermore, the test of the relationship on respondents' perception of budgeting practices is used and their level of profitability reveals a direct and significant relationship.

KEYWORDS
Budgeting Practices, Profitability, Small and Medium Enterprises, Causal-Comparative, Correlation, Regression

Cite This Paper in IEEE or APA Citation Styles
(a). IEEE Format:
[1] Christian Philip A. Fortuna , "Budgeting Practices: Its Impact on the Profitability of Small and Medium Enterprises in Isabela," Universal Journal of Accounting and Finance, Vol. 9, No. 3, pp. 336 - 346, 2021. DOI: 10.13189/ujaf.2021.090307.

(b). APA Format:
Christian Philip A. Fortuna (2021). Budgeting Practices: Its Impact on the Profitability of Small and Medium Enterprises in Isabela. Universal Journal of Accounting and Finance, 9(3), 336 - 346. DOI: 10.13189/ujaf.2021.090307.