Impact of Financial Management Practices on Performance Measurement of Small and Medium Enterprises in Tamil Nadu

Abstract

Small and medium enterprise (SME) development is essential for India’s economic expansion. SME is an important participant in the development of accessories that supports major industries. The current study is focused on the variables impacting performance measurement in SMEs, despite the fact that many small and medium businesses are experiencing significant losses and closures as a result of poor performance. The next goal is to determine the connection between small and medium business performance management and financial management practices. This study uses SME performance measurement as a dependent variable. Risk management, working capital management and credit management are three independent factors that can be used to assess SME financial management practices. The questionnaire that was used for each item was based on the earlier research. A five-point Likert scale was used to score each item scale used in this investigation. Working people in a few districts in South Tamil Nadu, India and used online structured questionnaires to gather data. The present sample size of the study is 157. The statistical data analysis has been carried out employing jamovi 1.8. For factor loading, reliability, sample size, model fit, regression analysis for hypothesis testing and structural education modelling were used. Policymakers and SME entrepreneurs who are familiar with performance measurement of many elements can benefit from the study’s findings. The study found a relationship between SMEs’ performance measurement and financial management practices.