摘要：Small and medium Enterprises are seen as a driving force for the promotion of an economy. The purpose of the study was to establish the relationship between financial management practices and business performance of SMEs in western Uganda with a view to establishing a coherent model directed at improving business performance and it was hypothesized that financial management practices positively influences Business performance. The study adopted a positivist (quantitative paradigm) with cross sectional and correlational designs. The study used a respondent sample of 335 SMEs operating in Mbarara, Sheema and Bushenyi whose owners/managers were the unit of enquiry. Structural Equations Modeling with Analysis of Moment Structures were used to for statistical modeling. The findings in respect of the main purpose of the study indicated that financial management practices accounted for 33.8% of the variance in business performance of SMEs. The results also indicated that working capital management influences highly since it predicts over 22% of the variance in business performance. The present study supported a multi-theoretic approach in explaining business performance of SMEs in Uganda. The study supports the pecking order theory in explaining the financing of SMEs together with resource based view as the theories that help in explaining business performance of SMEs. The study confirmed efficient financial management practices factor structure of observed variables and the latent variables. As a result, the study provided models for efficient financial management practices. These models can then used to provide a trajectory for improving business performance of SMEs in Uganda. Policy makers, ICPAU, PSFU and SMEs owners may use these findings as a way of improving business performance of SMEs in Uganda since the SMEs are great contributors to the Ugandan economy. The owners of SMEs should develop a positive attitude towards adopting financial management practices so as to achieve desired business performance.
关键词：Financial Management; Business Performance; SMEs
