Cash Management and Profitability of Small and Medium Scale Enterprises in Manufacturing Industries in Delta State

Abstract

The ability of a business to survive and make a profit is still largely dependent on its ability to manage its cash, especially for SMEs in the industrial sectors of developing countries. This study examines the financial management and profitability of manufacturing SMEs in Delta State, Nigeria. The study explores the effects of important cash management elements, such as the cash conversion cycle (CCC), cash flow management procedures, collection and accounting, and working capital management literature, payment practices and digital payment uptake on business profitability as measured by net profit margin and return on assets (ROA). The study will collect cross-sectional survey data from a purposive sample of Delta State manufacturing SMEs using a mixed-methods methodology. Quantitative results will be supplemented by key informant interviews with supply chain supervisors, owners, and accountants. The quantitative analysis will include multiple regression, correlation, and descriptive statistics, while the qualitative data will be examined through thematic analysis. According to the study, use of digital payments both moderates and strengthens the positive association between higher profitability and disciplined payables and receivables management, more stringent cash conversion cycles, and stronger cash flow forecasting. The findings will give managers and legislators practical cash-management strategies to improve the manufacturing SMEs in Delta State's financial performance and resilience.