EFFECTS OF FINANCIAL MANAGEMENT PRACTICES ON PROFITABILITY OF SELECTED FLOUR FACTORIES IN SOUTHERN REGION, ETHIOPIA.

ABSTRACT<br> Flour factories are very important to the economic growth and development of a country. Sensible Financial Management Practices can help flour factories to become profitable and stays in business for a long period of time. The main objective of this study was to examine the effects of financial management practices on profitability of selected flour factories in SNNPR. The study was guided by five specific objectives which were: to examine the effects of Liquidity management practice, investment Management practice, capital structure management practice, fixed asset management practice and financial reporting analysis on profitability of selected flour factories in SNNPR. The population of the research consisted of the 25 flour factories in selected towns. The study used primary data. Questionnaires were used to collect primary data. Descriptive, correlation and regression analysis were used to analyze the data. Descriptive statistics produced frequencies, means and percentages while inferential statistics produced regression and correlation results which show the relationship among the variables. The study found that, all independent variables in the study are significant and positive relationship with profitability. Further, the research model of flour factories’ profitability indicates that profitability depends upon efficiency of companies financial management practices. Therefore, the researchers recommended that any action that influences financial management practices should be carefully considered to determine whether they positively or negatively impact on companies’ profitability.<br>