Accounting knowledge, practices, and financial performance of sari-sari stores: A descriptive-correlational study

Abstract

This study was conducted to determine the effect of accounting knowledge, practices, and controls on the financial performance of sari-sari stores in Laoag City, Ilocos Norte, Philippines. Using a descriptive-correlational research design, data were gathered from 319 sari-sari store owners through a structured survey questionnaire and analyzed using statistical tools such as weighted mean, t-test, ANOVA, Spearman’s rho, and Pearson-r correlation.

Findings revealed that sari-sari store owners in Laoag City are mostly middle-aged, married women with relatively high educational attainment, as nearly half are college graduates. Most stores operate with low initial capital but show growth in current capitalization and generate modest monthly sales. The extent of accounting knowledge among sari-sari store owners was rated high, while the extent of accounting practice application was rated moderate to high, indicating that most owners understand accounting concepts but vary in the consistency of their application. The degree of seriousness of operational problems was found to be moderately serious. The overall financial performance was assessed as moderate. Results further showed that educational attainment and capitalization levels significantly influence financial performance. Likewise, both the extent of accounting knowledge and the extent of accounting practice application were found to have significant positive relationships with sales, return on assets, and cash flows. Meanwhile, operational problems exhibited a partial but significant relationship with financial performance, where external problems had stronger effects compared to internal ones.

The study concluded that adequate accounting knowledge and consistent application of accounting practices and controls contribute to enhanced financial performance of sari-sari stores, particularly in profitability, asset management, and liquidity. It is recommended that store owners adopt systematic recordkeeping, utilize digital accounting tools, and participate in financial literacy training to improve decision-making and business sustainability. Government agencies such as DTI, DOST, and LGUs are encouraged to provide capacity-building programs, microfinancing support, and technical assistance to help microentrepreneurs sustain growth. Future research may replicate the study in other areas or include additional variables such as marketing strategies, technological adoption, and customer relationship management to further explore the determinants of financial performance among sari-sari stores in the Philippines.