Debt Financing and the Performance of Food and Beverage Processing Enterprises (Fbpes) Case Study: Multiline International Ltd Masaka
Author: Yvone Abera
Supervisor: Anthony Agume Kabisyaki
Debt Financing contributes a great part in the capital structure of business Enterprises. This is why a study on debt financing and the performance of Food and Beverage Processing Enterprises (FBPEs) was carried out. The study concentrated on three specific objectives: factors influencing debt financing decisions, short-term debt, and long-term debt. These were compared with manufacturing performance indicators that were: delivery speed, delivery reliability, quality, price (cost), and flexibility. Multiline International Ltd-Masaka, a Bushera processing plant branded in the name “BESSA MILLET MALT DRINK”, was used as a case study.
It was established that debt finance has some constraints. This is why firms weigh several factors in making a debt financing decision. The researcher personally reviewed a variety of literature in line with his specific objectives in order to come up with an objective scientific research. These were sources of secondary data. Primary data for this study was collected using a properly designed questionnaire that was given to all primary stakeholders (employees and directors) of case study. The researcher used purposive sampling by sampling only staff that have worked with the enterprise for at least the past one (1) year on the assumption that these employees have played have watched or played part in the debt financing decision of the entity. Thematic analysis was used to analyze data from respondents.
From the findings, it was found out that FBPEs consider some factors in making a debt financing decision. It was also found out that FBPEs use both short and long-term debt finance despite costs attached as highlighted in the problem statement. Lastly, it was found out that debt finance improves performance of FBPEs as exhibited by the five manufacturing performance indicators.