ABSTRACT
This study investigated the effect of financial management practices on the profitability of SMEs in Oredo, L.G.A, Edo State. Specifically, the study sought to establish the effect of working capital management practices, fixed assets management practices, and capital structure management practices on profitability of SMEs in Nigeria. The study used the primary research instrument through the administration of questionnaire to source data needed for the study. The study targeted a sample of two hundred (200) respondents, in which a total of 200 questionnaires were distributed and same number (200) was filled, retrieved, cleaned and used for this study. The data collected was analyzed using SPSS version 20.0 and descriptive statistics was used to present the results while regression test was employed to make findings on the research hypotheses. It was revealed that: working capital management significantly affect the profitability of SMEs in Oredo, L.G.A, Edo State; fixed assets management significantly affect the profitability of SMEs in Oredo, L.G.A, Edo State; and capital structure management is not significantly related with the profitability of SMEs in Oredo, L.G.A, Edo State. Based on these findings, it was recommended that: it is crucial for SMEs in Oredo, Edo State, to focus on optimizing their working capital which involves efficiently managing their short-term assets and liabilities; SMEs should invest in effective asset management strategies, including regularly assessing the condition and utilization of fixed assets, such as machinery and equipment, to ensure they are operating efficiently; and it is still essential for SMEs to periodically review their capital structure which involves assessing the mix of debt and equity financing and ensuring it aligns with the business's growth goals and risk tolerance.
