Republic of the Philippines

SURIGAO DEL SUR STATE UNIVERSITY

Tandag City, Surigao del Sur

GRADUATE SCHOOL

Chapter 3

RESEARCH METHODOLOGY

This chapter presents the research design, research locale, research

respondents, research instrument, data gathering procedures and statistical treatment

of data to get the valid and reliable result of the study effects of financial management

practices on profitability of small and medium enterprises in San Francisco, Agusan del

Sur.

Research Design

The method used to obtain results associated with the problem is a descriptive

quantitative research method. It emphasizes objective measurements and the

statistical, mathematical, or numerical analysis of data collected through polls,

questionnaires, and surveys. And hence, in order to achieve a fact-finding results in the

effects of financial management practices on profitability of small and medium

enterprises in San Francisco, Agusan del Sur., the descriptive method is appropriate for

this study.

Research Locale

The birth of San Francisco has always been associated with the history of the

provinces of Agusan and Surigao del Sur. Before San Francisco came to what the

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 Republic of the Philippines
SURIGAO DEL SUR STATE UNIVERSITY
Tandag City, Surigao del Sur

GRADUATE SCHOOL

municipality is now, it was once part of the District of Gibong which was then governed

by the late Deputy Governor Francisco Caraylo.

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 Republic of the Philippines
SURIGAO DEL SUR STATE UNIVERSITY
Tandag City, Surigao del Sur

GRADUATE SCHOOL

Figure 2: Map of San Francisco, Agusan del Sur

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 Republic of the Philippines
SURIGAO DEL SUR STATE UNIVERSITY
Tandag City, Surigao del Sur

GRADUATE SCHOOL

Sta. Ana is the site of the seat of government. It was comprised of several sitios

in which Sitio Hagpa belonged, the site of the present-day San Francisco. Hagpa was

coined from a Manobo word for “swampy” as the sitio itself was once was, a small

village nestled along the Adlayan River and inhabited by Manobo tribes. Hagpa was

later renamed San Francisco in honor of Deputy District Governor Francisco Cataylo. In

the early part of 1955, the first local government was established as San Francisco was

created as a Municipal District. The late Mrs. Francisca Tesoro Samson was appointed

as the first Municipal District Mayor by the then Provincial Governor Felixberto Dagani.

On June 21, 1959, by virtue of Republic Act No. 2518, San Francisco was

officially created into a regular municipality of the Province of Agusan. In this same year,

the first local officials of the municipality were elected with the Atty. Paquito Fuentes as

the first elected municipal mayor, who served for three consecutive terms of office. Eight

years after its creation as a regular municipality, on June 17, 1967, by virtue of Republic

Act No. 4979, the Province of Agusan was divided into the Provinces of Agusan del

Norte and Agusan del Sur, in which San Francisco was part of the latter.

The continued growth of Agusan del Sur also saw the development of the

municipality of San Francisco. Its growing population later paved the way for the

creation of the municipality of Rosario through Republic Act No. 5760 approved by

President Diosdado Macapagal on June 21, 1969, just two years after the creation of

Agusan del Sur.

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 Republic of the Philippines
SURIGAO DEL SUR STATE UNIVERSITY
Tandag City, Surigao del Sur

GRADUATE SCHOOL

Today, San Francisco is a 1st class municipality in the province of Agusan del

Sur, Philippines. According to the 2015 census, it has a population of 74,542 people. In

2013, San Francisco topped first as the "Most Competitive Municipality in the

Philippines" according to the National Competitiveness Council (NCC) from out of the

163 first-class municipalities covered by their index.

The town is also popular for its Irosin stone crafts, which has been the cottage

industry of many indigenous families in the area for hundreds of years. Due to the

town's commendable folk arts and crafts made in stone, many scholars have suggested

for its nomination in the UNESCO Creative Cities Network.

Research Respondents

The respondents of the study are the small and medium enterprises in the

municipality of San Francisco, Agusan del Sur. The sample was selected using stratified

random sampling technique by considering the SMEs in all sectors (i.e. manufacturing,

construction, service, trade, and urban agriculture) as strata. The samples from each

stratum were drawn by applying the percentage equivalent. 50% of the total population

of SMEs were chosen to be the sample size of this study.

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 Republic of the Philippines
SURIGAO DEL SUR STATE UNIVERSITY
Tandag City, Surigao del Sur

GRADUATE SCHOOL

Table 1

Total Number of SME’s per Sector

Sector Population Percentage

Manufacturing 23 13.22%
Construction 12 6.90%
Service 112 64.36%
Trade 16 9.20%
Agriculture 11 6.32%
TOTAL 174 100%

Table 2

Distribution of Respondents

Sector Percentage Sample

Manufacturing 13.22% 11
Construction 6.90% 6
Service 64.36% 56
Trade 9.20% 8
Agriculture 6.32% 6
TOTAL 100% 87

Research Instrument

The Study will use an adopted questionnaire from the research entitled “Financial

management and Profitability of Small and Medium Enterprises in Ho Chi Minh City,

Vietnam” by Kieu Minh Nguyen of Southern Cross University, N.S.W., Australia.

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 Republic of the Philippines
SURIGAO DEL SUR STATE UNIVERSITY
Tandag City, Surigao del Sur

GRADUATE SCHOOL

The questionnaire has three (3) parts: the first part contains the demographic

profile of the respondents such as designation/position, educational attainment and etc.

including other business details. The second part contains the financial management

practices of the business such as accounting information system, financial reporting and

analysis, cash management practices, receivable management practices, inventory

management practices, fixed asset management practices, and financial planning

practices. The last part contains the financial characteristics of the business such as

Current ratio, Debt-to-equity ratio and etc.

Data Gathering Procedure

The researcher will undergo the step by step process or protocol in gathering the

data. First, he will ask an approval letter from the Dean of the Graduate Studies to

conduct his survey, then after the letter was approved he will now reproduce the

questionnaire together with the Survey letter. After it was reproduced, he will arranged it

and staple, put it in a sliding folder and now it’s ready for distribution.

The researcher will now distribute the survey questionnaire to the respondents.

He will personally administer with the help of enumerators to conduct the survey to the

respondents. He will assist the respondents in answering the survey questionnaire.

After the survey questionnaire was given to the respondents, he will now collect it back

for tallying. The questionnaires that was retrieved were now being tallied. After all of the

questionnaires are tallied, its time for analyzing them with the help of a software

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 Republic of the Philippines
SURIGAO DEL SUR STATE UNIVERSITY
Tandag City, Surigao del Sur

GRADUATE SCHOOL

program. Then, after the data was analyzed it will be now interpreted. All of the results

in the interpretation of the data will be now put into writing.

Statistical Treatment

Descriptive statistics such as means, frequency, tabulation, and cross-tabulation

were used to summarize and describe characteristics of financial management

practices of SMEs in sample. More complicated statistical analysis techniques such as

bivariate analysis, multivariate analysis, and factor analysis were used to determine

whether a relationship exists between efficient financial management and SME

profitability, and to explain this relationship.

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