Investigation of Availability and Uses of Financial Statements in Small Businesses in Tanzania

Mpili, Mohamed Ally (2013) Investigation of Availability and Uses of Financial Statements in Small Businesses in Tanzania. Masters thesis, The Open University of Tanzania.

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Abstract

This study was done to investigate availability and uses of financial statements in small businesses in Tanzania, the case of Dar es Salaamregion. The study involved survey of 92 SMEs located in Dar es Salaam. Descriptive analysis and multiple regression analysis were employed to establish quantitatively factors influencing preparation and uses of financial statements by small businesses. Factors determining preparation and uses of financial statements includes entrepreneurship knowledge, uses of collateral during securing loans and need for uses of financial statements for business decision. Furthermore, statistical evidence proved that understand financial statements, enough capital and level of education which determine firms profitability were also significant factors influencing the preparation and use of financial statement by SMEs. Additionally, the use of financial statements for decision making may also depend on type and nature of decision itself as well as nature of business in relation to decision under consideration. The implication from the study findings is that there is need to integrate approach to study financial management and decision making in entrepreneurship courses as capacity building to enable effective operations of SMEs.

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