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COLLEGE OF BUSINESS ADMINISTRATION AND ACCOUNTANCY

RESEARCH PROPOSAL TEMPLATE

1.0 (Working)/ Title :

The Effectiveness of Cash Flow in Barangay Micro Business Enterprises in Las Pinas City
2.0 Name of Proponent(s) 2.1 College/Department

Orcine, John Tyronn U. Bachelor of Science in Accounting Technolo

Subico, Noniel Anthony T. College of Business Administration and
Enriquez, Marc Jay M. Accountancy

3.0 Background of the Study (Discuss the significance of the study, how the study contributes to existing knowledge, social relevanc
study, basic assumptions as well as the scope and limitation of the study)

The life of a business depends on its cash flow. A company's cash flow at any point in time is the difference between its cash
the beginning of an accounting period and at the end. This includes operating expenses, investment income, sale of assets, pur
assets and loan proceeds. A business with inadequate cash flow could result to insolvency. Every day, small business owners f
deliver products and services for their customers, but with 50 percent of small businesses going out of business within five ye
opening their doors (Chriss, 2019) The problem with small businesses is that they do not have enough funds in their pipeline.
business owners struggle to maintain and optimize their cash flows. To analyze the profitability of a business the equation of a
including accounts receivables less accounts payable is used. Having to wait to receive a check via mail and then deposit it int
accountant result to us not having the cash we need for days or even weeks. (Scarola, 2019) In financial accounting, the statem
cash flows shows how changes in balance sheet accounts and income affect cash and cash equivalents, and breaks the analysis
operating, investing, and financing activities. It is important for a business to analyze cash flow to measure how well it manag
position in order to pay its debt and obligations and acquire funds for its operating expenses. The republic Act No. 9178 was si
President Gloria Macapagal-Arroyo on November 13, 2002. This article contain the law for Barangay Micro Business Enterpr
shows that the total assets of not more than P3 million is considered as micro business
4.0 Statement of the Problem / Objectives of the Study/Hypothesis (Formulate the research SOP, objectives and hypothesis)

In this paper, the researchers address the management’s decision-making process and examine the effect cash flow and in
reader on what cash flows practice are used in small businesses. The major source of data to this research is primary data
administration of questionnaires.

1. What is the demographic profile of the respondents in terms of?

1.1 Name of micro business
1.2 Years of existence
1.3 What type of micro-business they operate
2. Evaluating the effectiveness of cash flow in BMBE?
2.1 How often is the business cash flow reviewed?
2.2 How much is the capital?
2.3 How much income does the business make in a month?
2.4 How often do they update their transactions?
2.5 How often do they restock their products?
2.6 What kind of property does the business occupy?
2.7 What component of the business affects cash flow the most?
2.8 What type of financial instruments are used to measure profitability?
2.9 Who handles the management of cash flow in the business?

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COLLEGE OF BUSINESS ADMINISTRATION AND ACCOUNTANCY

5.0 Significance of the Study

The research's purpose is to shows how effective are the cash flows are in micro businesses in the are Las Pinas City. This fin
be important to barangays to help them determine if the business of the cash flow in the micro business is not profitable

Future Researchers
This research will be helpful to those who wants to investigate further about the effect of cash flows in barangay micro busine
enterprise

Accounting Students
To give knowledge to accounting students on the effects of cash flow on micro businesses so that they may have a better
understanding on starting up a business and the management of adequate cash flow.

Accounting Professors
The study is useful to accounting professors on sharing the cycle of business cash inflows and outflows and the relationship
on a business’s profitability to students.

Microbusiness Entrepreneurs
This study aims to give knowledge to microbusiness entrepreneurs on the analysis of cash flows and determining solvency to
an in depth study on how to maximize the profitability of their business.

Barangay
This study may be used as a tool to identify the weak profiting micro businesses and help them determine what they may fo
their cash flows to improve their net income.

6.0 Scope and Limitation (with population and sample)

This research conducted to evaluate the effectiveness cash flows of selected Barangay Micro Business in Las pinas City. The
respondents are micro business owners, regardless of age and gender. The target of this research is atleast 258 respondents sel
different barangays in Las Pinas City

7.0 Review of Related Literature and Synthesis (Minimum of 30 literatures both Local/International cited not later than 5
Cash Flow
It is the total amount of money being transferred from in the business and out. When determining a business’ solvency is by c
cyle of cash inflows and outflows. According to the study performed by Jessie Hagen of US Bank proper monitoring of cash f
critical, because poor management of cash flow causes 82% of the business’ chances of failure.

AL-Attar, 2003, This article examined the ability of current accounting data to explain
future cash flows for UK firms, as disclosed under FRS1 (1991). Rather than examining price
data - from which cash flow implications have to be inferred - he followed the more direct
approach used in several recent US studies, in which actual future cash flow data are
examined. Specifically, his methodology is a development of the OLS regression framework
employed by Barth et al. (2001). He provides a replication of their main OLS analysis, and
then extends this to deal with fixed effects and time trends in the levels of cash flow data. His
Journal of Advanced Social Research Vol.2 No.4, June 2012, 231-243
study found that the disaggregating of earnings into cash flows and accruals, generates
superior explanatory power with regard to future cash flows.

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Cash Flow Analysis
It is the study showing the cycle of your business’s cash inflow and outflows. Maintaining adequate cash flow for your busine
provide the basis for cash flow management. It also involves examining the components of the cash flow that affects your bus
as accounts receivable, credit terms, inventory and accounts payable.Comparing the total of your unpaid purchases against the
due at each end of the month is a quicker and easier way to perform cash flow analysis.

Solving Cash Flow Problems

Cash flow issues are mostly results of poor bookkeeping practices. Most self employed contrarctors with day to day business
have a hard time keeping their books up to date and also tend to fall behind on paying invoiving paying bills, and collecting p
from customers. There is a remedy for many businesses is to use accounting software the generates invoices, pays bills, and cr
flow statements and accounts receivable reports.

Role of Cash Flow

The role of cash flow in explaining the change in company liquidity Since Liquidity is considered a crucial input for financial
a major point of interest is whether earnings  which include accruals  or cash flows provide the superior explanatory abili
respect to Liquidity. Cash flow according to international accounting standards: IAS 7 has the ability to evaluate company’s li
and its ability to face short term and long term obligations.

5 Best Practices of Cash Flow Management

Most businesses have this unwavering focus on “profits”, which isn’t a bad thing at all. However, that’s only half the story. In
it’s the cash flow that’s the most important thing a business should be focused on. Profits might look good on paper but it’s w
ng more than the paper itself if there’s no positive cash flow to back it up.
Cash flow is the bedrock of every business. Truly profitable businesses have positive cash flows, most of the time. A great de
positive cash flow – everything else being the same – depends on your ability and attention to detail when it comes to managin
flow.

Understanding Cash Flow

Profit isn’t the same as cash flow. To put it in simple terms, business profit equals revenue minus expenses and tax. Invoicing
customer is revenue, but actually getting the payment into the bank account is cash.
If you were to total the sum of all invoices you sent out in a particular month to clients, you’d get the revenue. You’d have a f
about your expenses too. Put these two numbers into the equation and you’d get profit. But it’s not profit until the entire amou
invoiced total is realized as cash.

Increase Sales, Not Expenses

Don’t confuse growth with profitability. The only kind of growth that matters is when you sell more and hence realize more c
more people than you need, opening more offices across the nation, and investing in resources before you need them might all
“you are growing” but you really aren’t. What’s happening, however, is that you are putting a huge strain on your cash flow.
Make customer acquisition your primary focus, and even though it seems like a no-brainer, it’s harder to make it happen. Find
acquire customers at low costs, optimize every channel available for your sales and marketing, deploy cross-selling and up-se
your existing base of customers. Doing so boosts your sales numbers. As long as you minimize your accounts receivables, you
right path to improve your cash flow.

Credit? Minimize or Eliminate

The almost operate on default, and that’s true for businesses all over the world. Just because 30-day or 90-day credit is commo
industries, businesses that work within the walls of the industry tend to take that as default practice and accept the status quo.
deny credit. If no other business has done that before, your business could be the first one.

Opt Out of Discounting & Low Pricing

Too many businesses resort to low-balling bids, lowering pricing, or offering discounts. While it’s not to say that these strateg
work, these exact strategies have the potential to derail your cash flow (or even put you out of business). If your products and
are the best in the market and there’s no close second to the value you offer, there’s no need to sweeten the deal.
Depending on the type of business you are in, you might want to tweak the strategy a bit. Instead of offering discounts just lik
could offer discounts for clients when they pay upfront, or when they choose to pay you monthly (or early).

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COLLEGE OF BUSINESS ADMINISTRATION AND ACCOUNTANCY

If you can, or if you have the ability to do so, avoid discounting altogether. Have you ever seen a brand new Apple product on
at an Apple store (despite competition and the availability of many other competitive products)?

Back it up with technology

For small businesses, cash flow problems also come about because or disorganized financial management. Invoices are lost, o
missed, and cash collection is random. By using the right technology, every small business can operate just as big as any Fortu
company.
NetSuite, for instance, allows you manage your cash flow (and your entire financial system) better with built-in real-time dash
reporting, analytics, and more. All of that, backed by robust cloud infrastructure without the need to maintain servers or hardw
management.
Cloud computing is the biggest time saver (life saver) for your business. Using technology, you can find ways to invoice faste
global, establish payment arrangements to minimize debtor days, offer customers new ways to invoice, make it easier for cust
pay you, and a lot more.
Barangay Micro Business Enterprise
Barangay Micro Business Enterprises (BMBEs) Act of 2002 A BMBE is defined as any business enterprise engaged in producti
processing, or manufacturing of products, including agro-processing, as well as trading and services, with total assets of not
P3 million. Such assets shall include those arising from loans but not the land on which the plant and equipment are located

The Cash Flow Sensitivity of Cash

The effect of financial constraints is captured by the firm's propensity to save cash out of cash flows (the cash flow sensitivity

Level of Management Practices of Micro and Small Businesses in Ilocos Norte

This study focused on the similarities and differences of the management practices of micro business and small business owne
Province of Ilocos Norte. It looked into the entrepreneur profile such as personal characteristics, entrepreneurs’ competencies
organizational profile and management practices

Extensive Implementation of the BMBE Law: An Assessment Across Metro Manila

The study reveals that the BMBE Law is not effective. There is a significant difference between the ideal and actual level of p
(in terms of awareness of microentrepreneurs) of the BMBE Law in Metro Manila across the 17 cities and identified Sectors.
8.0 Theoretical and Conceptual Framework (Provide own diagram of Conceptual Framework)

Conceptual Framework

- Barangay Micro -Making questionnaire - Evaluating of

Business -Conducting a survey effectiveness of
Enterprise -Analyzing the data the cashflow to
- Micro Retail through the use of Barangay Micro
Stores deceptive and Business
independent t-test Enterprises in Las
Pinas

INPUT PROCESS OUTPUT

Theoretical Framework
Cash flow is essentially the movement of money into and out of your business; it's the
cycle of cash inflows and cash outflows that determine your business' solvency. Cash flow

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COLLEGE OF BUSINESS ADMINISTRATION AND ACCOUNTANCY

analysis is the study of the cycle of your business' cash inflows and outflows, with the
purpose of maintaining an adequate cash flow for your business, and to provide the basis for
cash flow management. Cash flow analysis involves examining the components of your
business that affect cash flow, such as accounts receivable, inventory, accounts payable, and
credit terms. By performing a cash flow analysis on these separate components, you'll be able
to more easily identify cash flow problems and find ways to improve your cash flow.
A quick and easy way to perform a cash flow analysis is to compare the total unpaid
purchases to the total sales due at the end of each month. If the total unpaid purchases are
greater than the total sales due, you'll need to spend more cash than you receive in the next
month, indicating a potential cash flow problem. The diagram shown below is the type often
used to illustrate the cash flow cycle using the analogy of water. (In the next page)
When cash flow statements are used in conjunction with the other financial statements, it
provides such information which enables the users to evaluate the changes in net assets of an
enterprise, its financial structure, its liquidity and solvency position and its ability to affect
the amounts and timing of cash flows in order to adapt to changing circumstances and
opportunities. The ability of the enterprises to generate cash and cash equivalents can be
accessed through studying the cash flow statements. It enables the users to develop models to
assess and compare the present value of the future cash flows of different enterprises and
enhances the comparability of the reporting of operating performance by different enterprises
because in eliminates the effects of using different accounting treatments for the same
transactions and events. Historical cash flow information is used as an indicator of the
amount, timing and certainty of future cash flows. It is also useful in checking the accuracy of
past assessments of future cash flows and in examining the relationship between profitability
and net cash flow and the impact of changing prices.
The information in the Cash Flow Statement enables the users to determine whether the
enterprise is investing adequately in the maintenance of its operating capacity, failure of
which may prejudice future profitability for the sake of current liquidity and distributions to
owners. An example of the circumstance, where the cash and cash equivalent balances held
by an enterprise but not available for use by it, is holding them by a subsidiary that operates
in a country where exchange controls or other legal restrictions apply when the balances are
not available for general use by that enterprise.

9.0 Methodology of the Study (Provide research methods used, research design, sampling technique, locale of the study, Po
of the study, Sample size, data gathering procedure, validation of data, statistical tool used in the study)

This chapter discussed the approaches and techniques the researchers used when collecting data, analyzing the data and prese
findings. These include the research design, target population and sample, data gathering methods and data analysis techn

10.0 Working Bibliography (Include bibliography and web bibliography)

https://pdfs.semanticscholar.org/e929/71863fd52cf26b86ece406af4fcc7344616a.pdf
https://www.researchgate.net/publication/257066312_The_Role_of_Cash_Flow_in_Explaining_the_Change_in_Company_L
https://pdfs.semanticscholar.org/e929/71863fd52cf26b86ece406af4fcc7344616a.pdf
https://sererra.com/5-best-practices-cash-flow-management/
https://pdfs.semanticscholar.org/db0a/cc7b93f4e5b1c894fbcc134147941e339582.pdf
https://www.researchgate.net/publication/257066312_The_Role_of_Cash_Flow_in_Explaining_the_Change_in_Company_L
http://bulacanchamber.ph/images/downloads/RA%209178%20BMBE%20Handbook.PDFbv
https://www.degruyter.com/view/j/bejeap.2010.10.1/bejeap.2010.10.1.2302/bejeap.2010.10.1.2302.xml

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https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1540-6261.2004.00679.x
http://hrmars.com/hrmars_papers/Level_of_Management_Practices_of_Micro_and_Small_Businesses_in_Ilocos_
http://bulacanchamber.ph/images/downloads/RA%209178%20BMBE%20Handbook.PDF

11.0 Gantt Chart of Activities

Type of Activity Month 1 Month 2 Month 3 Month 4

Gantt Chart

12.0 Research Related Costs

Details Amount (in Pesos)

13.0 Profile of Researcher/s

Panel Fees P 5,100.00/per paper

Statistician Fee & Certificate 1,000

Turnitin processing Fee & Certificate 600
Grammarian & Certificate 600

Proposal Evaluation Rating: ____

Endorsed by: Evaluated by: Evaluated by:

________________________ _____________________ ____________________

Research Adviser: Research Panelist Research Panelist

Evaluated by:

_______________________
Panel Chair

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