Accounting Practices and the Profitability of Small Businesses in Santa Cruz, Laguna

• Author(s): Tamis, Joanna Marie C. ; Magtibay, Ma. Zyrelle I. ; Nabia, Sarah Mie L.; Bautista, Anjolina B.; Biete, Vincent Andrei P. ; Calma, Samantha Nichole D.; Darasin, Mhirasol B.; Gibas, Sheina Mae R. ; Magora, Royette P.; Solmerano, John Patrick E.; Tony Angelo C. Alvaran
• Paper ID: 1705758
• Page: 50-57
• Published Date: 07-05-2024
• Published In: Iconic Research And Engineering Journals
• Publisher: IRE Journals
• e-ISSN: 2456-8880
• Volume/Issue: Volume 7 Issue 11 May-2024

Abstract

This study examined the relationship between the accounting practices and profitability of small businesses in Santa Cruz, Laguna. Accounting practices were examined in terms of bookkeeping, inventory and supply management, and budgeting, while profitability was examined using the gross profit margin ratio, net profit, and return on equity. The study includes the profile of the business, the extent of awareness of accounting practices, and the level of profitability of small businesses. Data were gathered from 143 small business owners, managers, or accounting staff such as bookkeepers and accountants through the administration of the survey. The study further adopted the use of Pearson r correlation to test the hypotheses with 5% significance. The study found that accounting practices and the profitability of small businesses have a significant relationship. Specifically, the finding revealed that budgeting and inventory and supplies management has significant low to very low correlation with net profit, gross profit margin ratio and return on equity. However, the findings also revealed that bookkeeping has significant relationship with net profit and return on equity but not with gross profit margin ratio. Moreover, the study concluded that small businesses in Santa Cruz, Laguna, have existed for more than 10 years and are mostly service-oriented businesses that are strongly profitable and aware of accounting practices to a great extent.

Keywords

Accounting Practices, Profitability, Small Businesses

Citations

IRE Journals:
Tamis, Joanna Marie C. , Magtibay, Ma. Zyrelle I. , Nabia, Sarah Mie L.; Bautista, Anjolina B.; Biete, Vincent Andrei P. , Calma, Samantha Nichole D.; Darasin, Mhirasol B.; Gibas, Sheina Mae R. , Magora, Royette P.; Solmerano, John Patrick E.; Tony Angelo C. Alvaran "Accounting Practices and the Profitability of Small Businesses in Santa Cruz, Laguna" Iconic Research And Engineering Journals Volume 7 Issue 11 2024 Page 50-57

IEEE:
Tamis, Joanna Marie C. , Magtibay, Ma. Zyrelle I. , Nabia, Sarah Mie L.; Bautista, Anjolina B.; Biete, Vincent Andrei P. , Calma, Samantha Nichole D.; Darasin, Mhirasol B.; Gibas, Sheina Mae R. , Magora, Royette P.; Solmerano, John Patrick E.; Tony Angelo C. Alvaran "Accounting Practices and the Profitability of Small Businesses in Santa Cruz, Laguna" Iconic Research And Engineering Journals, 7(11)