RESEARCH PROPOSAL

SOSC501 RESEARCH METHODS

(All project proposal must be 1000 - 2000 words including references and instructions)

Student ID 22217509
Name-Surname : AYAN ABDIQADIR ABDI SIMILARITY GRADE
Std. Number : 22217509

Program : ACCOUNTING & FINANCE

1. Research Title (max. 25 words) – 5 points

Impact of cash management on financial performance of food and beverage retailers in

Jubbaland, Somalia:
Kismayo City Case Study.

2. Introduction and Literature Review – 40 points

Retailers of food and beverages are crucial to maintaining and generating jobs in Puntland.
Any shop, big or small, who deals with cash frequently should put good cash management
procedures in place to make sure their firm is profitable and sustainable and lives up to their
expectations of success. Essential.

In light of the recent financial crisis, treasurers now need to concentrate their efforts on
figuring out how to enhance their cash management. Many businesses in Somalia are
currently concerned about their cash flow and financial management. In order to ensure
effective fund management, the Ministry of Finance and other pertinent government
organizations have concentrated on creating regulations and systems to make sure businesses
follow the law.

In 2001, Dropkin and Hayden Ineffective cash management reduces a company's liquidity,
raises the danger of default, raises operational costs, and eventually increases the company's
risk of going bankrupt. Any business, whether it is public or private, for profit or not for
profit, must have effective liquidity management. If cash management problems are not fixed,
businesses may experience a period of collapse due to their restricted liquidity (Zietlow,
2007).

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Companies bear the danger of not paying their suppliers and employees on time, according to
(Wayne & Harford, 2000). The company may be prosperous, according to its financial
statements, but it may have trouble completing its obligations on time due to inadequate
liquidity and cash flow management. Increased expenses like borrowing interest, late payment
fines, and lost supplier discounts as a result of late payments are the main causes of cash
problems for firms. Effective cash management is the secret to solving all of a company's
financial issues (Dropkin & Hayden, 2001).

According to (Guay & Harford, 2000), a company's liquidity is determined by its capacity to
turn assets into cash. This cover having access to or keeping funds from other places,
including banks. Two crucial markers of a firm's orderly cash flow are its capacity to fulfill all
of its obligations on schedule and how it makes use of its cash reserves (Coyle & B, 2000).

Corporate managers can minimize borrowing, optimize the opportunity cost of resources, and
control expenditure in accordance with defined budgets by implementing an efficient cash
management system. There are more inflows than outflows (Hughes & K, 2007). (Fabozzi &
Peterson, 2003) We come to the conclusion that managing cash is integral to all aspects of
business operations and that cash is the most recent asset a company may acquire.

Following coordination of group expenditure, effective budget use, lowering bank borrowing
costs, and raising the opportunity cost of resources are the following objectives of money
management (Fabozzi & Peterson, 2003). Macroeconomic and budgetary planning both
include cash management as a key component. However, there is currently no effective
technique for managing involvement (Foster, 1997).

2.1. The Problem and Purpose of the Research (5 points)

Retailers of food and drink in Garowe, Puntland, Somalia, play a significant role in the
development of the economy of the nation. The largest difficulty they faced was controlling
the company's cash flow so they could make money.

This study's primary goal is to determine how cash management impacts the bottom line of
food and beverage establishments in Jubaland, Somalia.

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2.2. The Importance and Contribution of the Research (5 points)
This study will be useful to academic scholars, particularly those in the financial and allied
professions, general retailers, and food and beverage stores.

This study will increase our understanding of money management and pave the way for more
academic and practical research in this area, particularly in Somalia.

2.3. Critical Literature Review (30 points)

Cash flow management is the process of tracking, analyzing, and adjusting a company's cash
flow (Dropkin & Hayden, 2001). All businesses rely on cash flow, which is also the most
crucial indicator of their overall health. Foster (1997) made the point that managing cash flow
is essential to figuring out how much cash is required to run a business at any given time. The
aforementioned arguments demonstrate the importance of cash management for any company
organization and the need for all managers to be encouraged to include it into their daily
operations (Fabozzi & Peterson, 2003).

emphasizes how crucial cash flow management is to a business's operations in order to make
sure that it has enough cash on hand to satisfy its immediate obligations. A balance between
cash and fixed assets should be maintained through effective cash flow management. This
necessitates the prudent monitoring of funding applications and sources (Hughes & K, 2007).

Effective cash management involves making a trade-off between the opportunity cost of
storing too much cash and the transaction costs of holding too little cash, according to
Godwin & R (2011). Therefore, deciding how much cash to maintain is best done through
careful planning and ongoing cash flow monitoring. Depending on the characteristics of the
business operating cycle, it is objectively used to manage and choose the optimum quantity of
cash required to run a business and invest in marketable assets, according to (Gitman & L. J.,
2009).

Cash and sales cycle patterns vary by industry, but in general, they involve supplying cash as
capital for a firm's startup expenditures, acquiring raw materials at a manufacturing company,
and delivering finished items at a marketing company. It entails obtaining and selling the final
good in exchange for quick cash. In contrast, when things are offered with credit terms, cash
produces debtors (Akinbuli & S.F, 2009).

Additionally, as it significantly affects firm performance, money management presents a

considerable challenge for most businesses (Ekwere & A.B., 1993). Any company's ability to

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plan for and manage its cash flows is crucial to its success (Allman-Ward, M., Sagner & J.,
2003).

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 3. Methodology (max. 1000 words) – 50 points

The city of Kismayo in the Jubarand region of Somalia serves as a case study for this study.
Using data collected from respondents through questionnaires, the researchers used a
quantitative approach to quantify incidents, describe the current situation, and assess the level
of cash management of 53 selected food and beverage retailers. and financial performance.
This study primarily uses a descriptive correlation design.

Researchers employ descriptive correlation design and quantitative methods to completely

comprehend and quantify the cash management of Javaland eateries. Descriptive correlation
design is the method that researchers prefer since it tries to establish correlations between
dependent and independent variables through quantifiable results.

Non-experimental descriptive research focuses on describing the traits of the people or groups
being examined. They put a lot of emphasis on finding connections between variables and
formulating hypotheses that help decision-makers and analysts draw post-result judgments.
The survey tool and questionnaire are intended to gather data directly from the restaurant.

Following the completion of data collection, the survey's results were compiled in a Microsoft
Excel spreadsheet. Researchers use frequency tables and percentages to do descriptive
statistical analysis after data collection. Both descriptive and inferential analyses are used in
this study.

To investigate the relationship between WCM and the company's gross margin, the mean,
standard deviation, and coefficient of variation are computed. In this investigation, hypotheses
are made. The null hypothesis states that regardless of how each merchant manages their cash,
at least one is different, whereas the alternative hypothesis states that at least one is the same.

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3.1. Application of Research Onion (think about research onion and define/explain the
following steps) (10 points)
-Deductive or inductive
Deductive
-Quantitative or qualitative
Quantitative approach
-Exploratory, descriptive or explanatory
A descriptive correlation design is used in this study.

-Cross sectional or longitudinal

3.2. Universe and Sample (sampling technique, sample size etc…) (10 points)
A non-probabilistic based sampling technique is used in this study.

3.3. Data Collection Tool (secondary/primary, if you plan to use questionnaire put sample
questions etc…) (10 points)
A questionnaire to collect primary data from food and beverage retailers.

3.4. Hypothetical Model (if applicable…)

3.5. Hypothesis or Research Questions (at least three research questions or three –relation,
effect and difference- hypotheses) (10 points)
1. What impact will cash conversion cycle management have on the financial performance of
food and beverage retailers in Jubaland, Somalia?

2. What is the impact of inventory management on the financial performance of food and
beverage retailers in Jubaland, Somalia?

3. What impact does accounts receivable management have on the financial performance of
food and beverage retailers in Jubaland, Somalia?

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4. What is the impact of accounts payable management on the financial performance of food
and beverage retailers in Javaland, Somalia?

3.6. Statistical Methods for Testing Hypothesis or Research Questions (10 points)
For inferential statistics, a regression model will be utilized to connect the dependent variable
(financial performance) with the independent variables (cash conversion cycle, inventory
management, receivables management, and payables management).

References (min. 5, max. 15… APA Style…) (5 points)

Dropkin, M., & Hayden, A. (2001). The Cash Flow Management Book for Nonprofits: A Step-by-Step
Guide for Managers, Consultants, and Boards. Jossey-Bass.

Zietlow, J., & Seidner, A. G. (2007). Cash & investment management for nonprofit organizations. John
Wiley & Sons.

Guay, W., & Harford, J. (2000). The cash-flow permanence and information content of dividend
increases versus repurchases. Journal of Financial economics, 57(3), 385-415.

Fabozzi, F. J., & Peterson, P. P. (2003). Financial management and analysis (Vol. 132). John Wiley &
Sons.

Sen, A., Sen, M. A., Foster, J. E., Amartya, S., & Foster, J. E. (1997). On economic inequality. Oxford
university press.

Fabozzi, F. J., & Peterson, P. P. (2003). Financial management and analysis (Vol. 132). John Wiley &
Sons.

Hughes, M., Ireland, R. D., & Morgan, R. E. (2007). Stimulating dynamic value: Social capital and
business incubation as a pathway to competitive success. Long Range Planning, 40(2), 154-
177.

Bari, M. A., Muturi, W., & Samantar, M. S. (2019). Effect of cash management on financial
performance of food and beverage retailers in puntland state of Somalia: A case of Garowe
District. International Journal of Contemporary Applied Researches, 6(3), 130-153.

Hamza, K., Mutala, Z., & Antwi, S. K. (2015). Cash management practices and financial performance
of small and medium enterprises (SMEs) in the Northern region of Ghana. International Journal
of Economics, Commerce and Management, 3(7), 456-480.

Abioro, M. (2013). The impact of cash management on the performance of manufacturing companies
in Nigeria. Uncertain Supply chain management, 1(3), 177-192.

Allman-Ward, M., & Sagner, J. S. (2003). Introduction to Managing Corporate Cash. Wiley Publishers,
Inc..

Signature Statement:

By writing my name and surname down, I declare that “The preparation of this assignment / project
consists of my own work and I did not get any help
7 from another person”.
Your name and surname: AYAN ABDIQADIR