The SBA students' financial literacy and family business success: A correlational study

Abstract

ABSTRACT

                            This research studied the effect of financial literacy on the financial performance of family-owned businesses managed or assisted by students from the School of Business and Accountancy (SBA) at Divine Word College of Laoag, Ilocos Norte, Philippines. Financial literacy was analyzed using the three dimensions; financial knowledge, financial awareness, and financial behavior while business performance was assessed using return on assets (ROA), net cash flow (NCF), and sales.

             Using a descriptive–correlational approach, data were gathered from 68 SBA students actively involved in their family enterprises. Findings revealed that students demonstrated strong financial literacy particularly in financial knowledge and financial awareness. However, statistical analyses showed no significant relationship was found between financial literacy and financial performance. Among the profile variables, only sex showed a significant association with return on asset, while age, degree program, and year level yielded no meaningful connections.

                            These results suggest that although SBA students possess strong financial competencies, financial literacy alone does not independently improve the financial performance of family-owned businesses. Contextual and structural factors—such as students’ limited decision-making authority, family-driven management practices, operational experience, and prevailing market conditions are likely more influential in determining business results. This study highlights the importance of enhancing hands-on learning methods, such as internships, business simulations, and mentorship, to enhance the application of financial concepts in real business settings.