Influence of Cash Requirements and Business Cycle on Medium Scale Enterprises in Akwa Ibom State

Abstract

This study determined the extent to which cash requirements and business cycle influence management of financial obligations in medium scale businesses in Akwa Ibom State. Two research questions and two null hypotheses guided the study. Descriptive survey research design was used in the study. The population of the study comprised 247 managers of medium scale enterprises in Akwa Ibom State. Simple random sampling technique was used to draw a sample of 152 respondents from the population. A validated 40-item structured questionnaire was used for data collection. Cronbach Alpha method was used in determining the reliability of the instrument and a correlation coefficient index of 0.82 was obtained. Simple linear regression was used to answer the research questions and to test the null hypotheses at .05 level of significance. The findings of the study indicate that cash requirement and business cycle have high influence on medium scale enterprises in Akwa Ibom State. It study concluded that it is eminent that cash requirements and fluctuations in the business cycle significantly influence how MSEs manage their financial obligations. It is recommended that Managers of business organisations should develop a comprehensive risk management strategy to mitigate financial risk.