Abstract

The purpose of the study was to establish the relationship between cash management and profitability and in small and medium enterprises (SMEs). The study was conducted in

Mukono leisure gardens The objectives of the study were to find out examine the various cash management policies used in small and medium enterprises (SMEs), factors influencing their

profitability and to establish the relationship between cash management and profitability

in small and medium enterprises.

The methodology used included descriptive research design, interview and questionnaires as primary source of data and literature of various scholars as secondary source of data.

The data was presented, i1~terpreted and analyzed using tables and percentages. From the findings cash management was identified as a key to success of the organisation as seen from the study. This is because cash management provides a basis for vrofitability

and survival of the organisation in the short and long run. It was therefore noted by different scholars that SMEs should adopt cash management policies to stream line their cash management in order to be profitable.

Basing on the survey, majority of the respondents also agreed that it is vital for the organisation to adopt cash management polices that can enable it manage it cash for example working capital management cash budgeting, cash planning and Forecasting and investing the surplus· :;ash to other profitable venture. This enable the organisation to stream line it& cash and avoid cash problems.

It was concluded that cash management is strongly con·elated to influence profitability of the an organisation this is because when different cash management policies and tools are

used administered collectively in relation to other factors that influence profitability of small and medium enterprises (SMEs) then they will be able the to succeed and remain profitable.

It was recommended that the organisation revisit its cash management policies and streamline them with the organisation goals and also adopt more the different cash management policies that will enable it improve its profitability levels and net worth.