FINANCIAL MANAGEMENT PRACTICES AND PROFITABILITY OF STREET

VENDORS IN SAN FRANCISCO, AGUSAN DEL SUR

A Research Proposal Presented to the

To the Faculty of Accounting, Business and Management Department
Southway College of Technology
San Francisco, Agusan del Sur

________________

In Partial Fulfillment
of the Requirements for the Degree in
Bachelor of Science in Business Administration
Course Professor: Dr. Erika Grace P. Rojas, Rcrim

________________

ARMODIA, JULIA JEAN ANTHONETTE Q.

DIZON, LHEA FE T.
ESCLETO, RHEA MAE B.
PONIO, CRISLYN C.
URSOS, JOHN CLIFFORD A.

March 2026
 APPROVAL SHEET

This Undergraduate Thesis entitled “FINANCIAL MANAGEMENT PRACTICES

AND PROFITABILITY OF STREET VENDORS IN SAN FRANCISCO AGUSAN
DEL SUR” was prepared by Julia Jean Anthonette Armodia, Rhea Mae Escleto,
Crislyn Ponio, Lhea Fe Dizon, and John Clifford Ursos as a requirement for the
Degree of Bachelor of Science in Accounting Information System and
Bachelor of Science in Business Administration Major in Financial
Management, hereby recommended for approval and acceptance.

CLARIZA FLORES, REA, REB

Adviser

APPROVED by the Panel of Examiners on Oral Examination with grade of

_______.

DR. ERIKA GRACE P. ROJAS, Rcrim

Chairperson

KIMBERLY B. FALSARIO
Member

Dr. ERIKA GRACE P. ROJAS, RCrim

Member
________________________________________________________________
____
ACCEPTED and APPROVED in the partial fulfillment of the requirement
for the Degree of Bachelor of Science in Accounting Information System and
Bachelor of Science in Business Administration Major in Financial
Management.

JOSEPHINE M. GRANADA, LPT, MBA, MAEd

Dean, Accounting Business Management

March 2026
 ACKNOWLEDGEMENT
We would like to express our deepest gratitude to all those who contributed

to the successful completion of our research.

First and foremost, our sincere thanks to our research adviser, Clariza

Flores, for their unwavering support, guidance, and valuable insights throughout

the entire research process. Their expertise and encouragement were

instrumental in shaping the direction and quality of this study.

Thank you to the panel of examiners for their dedication, diligence, and

helpful critiques that helped us polish and enhance this paper.

To Ms. Erika Grace Rojas, our research instructor. For her unwavering

support, encouragement, and motivational guidance.

We would also like to extend our heartfelt appreciation to the faculty and

staff of Southway College of Technology, ABM Department, for providing us with

the necessary resources and academic environment to conduct our research.

Special thanks to the participants and respondents who willingly shared

their time and valuable input, which played a crucial role in our data collection and

analysis.

To our families and friends, thank you for your endless support, patience,

and motivation during challenging times.

Above all, we thank God for giving us the strength, wisdom, and

perseverance to complete this research.

 DEDICATION
This research is dedicated wholeheartedly to our beloved families, whose

unwavering love, patience, and support have been the foundation of our journey

throughout.

To our parents, who inspired us with their sacrifices and dreams—thank you

for being our greatest motivation.

We also dedicate this work to our instructors and mentors, whose

commitment to education and excellence inspired us to strive for our best.

Lastly, to our fellow students and future researchers, may this study serve

as a source of inspiration and knowledge as you pursue your academic journey.

 Chapter 1

INTRODUCTION

Rationale

Street vendors often experience low and unstable profitability. Many of them

do not keep proper records of their daily sales and expenses, which makes it

difficult to know how much profit they really earn. Most vendors rely on memory

and experience instead of written records when calculating income and expenses.

Because of this, important costs such as operating expenses are sometimes

ignored, leading to incorrect profit estimates. Previous studies show that poor

accounting practices, lack of financial planning, and weak financial analysis can

result in poor profit management among street vendors (Kurnia et al., 2023;

Thangaraj & Kishore, 2023).

Profitability is important because it shows whether a business can continue

operating and support the daily needs of the vendor. For street vendors, profit is

the main source of income for food, education, and other household expenses.

Studies indicate that vendors with higher profitability are better able to manage

their daily operations, reinvest in their business, and handle changes in prices and

customer demand. Research also shows that improving profitability helps small

and informal businesses become more stable and contribute to local economic

activity (Bayan & Valdez, 2015; Suroso & Ardansyah, 2024).

 Several studies suggest that financial management practices are related to

profitability. Financial Management Theory explains that proper accounting,

planning, reporting, and analysis help business owners control costs and use their

money more efficiently. Vendors who keep records, plan expenses, and review

their financial information are more aware of their business performance. In

addition, Systems Theory explains that problems in one financial practice can

affect the whole business. Rational Decision-Making Theory also shows that

financial information helps vendors make better decisions, which can improve

profitability.

Despite existing studies on financial management and profitability, limited

research focuses specifically on street vendors, especially in local communities. In

San Francisco, Agusan del Sur, street vendors usually operate informally and

depend on experience rather than structured financial management practices. This

makes it important to study how financial management practices affect their

profitability. This study is unique because it focuses on street vendors in the local

area and examines financial management practices as a group of related activities.

The results of this study may help local government units and support programs

design activities that improve financial practices, increase profitability, and support

the livelihood of street vendors.

Research Objectives

The primary objective of this study is to determine the influence of financial

management practices on the profitability of street vendors in San Francisco,

Agusan del Sur.

Specifically, this study aims to:

1. determine the level of financial management practices of street vendors in

terms of:

a. accounting;

b. planning;

c. reporting; and

d. analysis.

2. determine the level of profitability of street vendors.

3. determine the significant relationship between financial management

practices and profitability of street vendors.

4. determine the significant influence of financial management practices on

the profitability of street vendors in San Francisco, Agusan del Sur

HYPOTHESIS

H₀₁: There is no significant relationship between financial management practices

and profitability of street vendors in San Francisco, Agusan del Sur.

H₀₂: Financial management practices have no significant influence on the

profitability of street vendors in San Francisco, Agusan del Sur.

Review Of Related Literature

This section presents the review of related literature on the variables of the

study, namely financial management practices and profitability of street vendors.

Financial management practices are discussed through the indicators accounting,

planning, reporting, and analysis, which describe how street vendors manage their

financial activities. Profitability is discussed as the financial outcome of business

operations, reflecting the ability of vendors to generate income after covering

costs. The studies reviewed were taken from recent local and foreign literature and

are aligned with the theories that support this study, including Financial

Management Theory, Dynamic Capabilities Theory, Systems Theory, and Rational

Decision-Making Theory (Brigham & Ehrhardt, 2008; Kurnia et al., 2023; Suroso &

Ardansyah, 2024).

Financial Management Practices

Accounting refers to the process of recording and tracking financial

transactions such as sales and expenses. Kurnia et al. (2023) found that many

street vendors calculate profit only by subtracting production costs from sales and

do not keep written records, leading to inaccurate profit measurement. Similarly,

Thangaraj and Kishore (2023) reported that most street vendors rely on memory

instead of proper bookkeeping, which limits their ability to manage finances

effectively. However, Bayan and Valdez (2015) observed that some vendors apply

basic accounting practices such as cost-based pricing and simple profit

computation, even without formal systems. These studies show that accounting

practices among street vendors exist but are mostly informal and limited.
 Street vendors in Pringapus Village apply accounting practices in a very

simple and informal way. Most of them calculate profit only by subtracting

production costs from the selling price, and they usually do not keep written

records of their income and expenses. Important accounting elements such as

overhead costs, operating expenses, and taxes are often not included in their

calculations. Profit estimation is mainly based on personal experience and

assumptions rather than proper accounting methods. Many vendors also have

difficulty understanding correct profit calculation because of limited education and

age, which affects their ability to measure their real financial performance

accurately (Kurnia et al., 2023).

The study shows that accounting practices are mainly reflected through the

use of profitability measures such as gross profit margin and net profit margin

among street food vendors. The researchers computed profits by identifying cost

of sales, net sales, and operating expenses, which helped determine how

profitable the vendors were. Pricing decisions were largely based on cost-based

pricing, indicating that vendors considered production costs when setting prices.

However, the study also notes that many street food vendors do not keep written

accounting records, and profit computations are often basic. As a result,

accounting practices exist but are generally simple and informal, focusing more on

profit outcomes than on systematic bookkeeping or financial toggle recordkeeping

(Bayan & Valdez, 2015).

Street food vendors in Rotunda manage their money by keeping track of

ingredient costs and setting prices to make sure they earn profit. They often decide
the price of their food based on how much the ingredients cost and try to get

discounts from suppliers. Even though they do not use formal accounting systems,

these practices show that they watch their costs and income carefully to keep their

business running. This simple way of managing money is a form of practical

accounting in their business (Dano et al., 2025).

Street vendors in Davao City do some basic accounting, like keeping track

of daily money from sales, rolling over their capital, and borrowing money to

continue their business. Most vendors, however, rely on memory instead of writing

records or using formal accounting methods. Because of this, their accounting is

only at a low to moderate level. They are aware of how much money they earn and

spend, but the lack of proper records makes it hard to manage their funds well or

plan for business growth (Aplaon, Paguio, & San Jose, 2016).

Street vendors often do only basic accounting. Some keep simple records

of their daily income, expenses, and cash flow, but many just rely on memory

instead of writing things down. Vendors who keep records can track their money

better, see how much they earn and spend, and make better decisions about their

business. However, most vendors do not have systematic accounting, which

makes it hard for them to plan, manage money properly, or get loans (Thangaraj

& Kishore, 2023).

Planning involves deciding how financial resources will be used in business

operations. Studies show that planning among street vendors is usually short-term

and based on daily experience. Bayan and Valdez (2015) noted that vendors plan

their activities by deciding what to sell, where to sell, and how to price products,
but without formal budgets or long-term plans. In addition, Thangaraj and Kishore

(2023) found that vendors with basic record-keeping skills are better able to plan

expenses and manage cash flow. On the other hand, Dano et al. (2025) reported

that some vendors plan promotions and product offerings based on customer

demand and market trends. These findings suggest that planning practices are

present but are mostly informal and experience-based.

The study shows that planning among street food vendors is mainly short-

term and operational rather than formal or long-term. Vendors plan their business

activities by deciding what products to sell, where to sell, how many days to

operate, and how to set prices, often based on daily experience and customer

demand. Many vendors also plan their operations by choosing cost-based pricing,

adjusting working days, and deciding whether to store unsold products. However,

the study does not discuss formal financial planning tools such as budgeting,

forecasting, or long-term business plans. This indicates that planning practices

exist among street food vendors, but they are informal and based on daily decision-

making rather than structured financial planning (Bayan & Valdez, 2015).

Street food vendors in Rotunda make plans to help their business grow

and earn more money. They choose places to sell where many people can see

them, like tourist spots. They also plan special discounts and promotions during

events, such as Christmas, to attract more customers. Some vendors use social

media to follow trends and decide what new products to sell. These actions show

that they plan their work and strategies carefully, even without formal business

training (Dano et al., 2025).

 Street vendors in the study have very limited financial planning. Most only

make informal plans for daily use of money, such as deciding how much to spend

on buying goods or paying daily expenses. They rarely do long-term planning or

budgeting. Because they do not keep proper financial records, their planning is

based mostly on memory or experience instead of structured strategies. This

makes it hard for them to predict income, control costs well, or make good business

decisions (Lack of Systematic Record Keeping Among Street Vendors, 2025).

Street vendors usually do not plan their business in a formal way. Most

make daily decisions about spending money, buying goods, and managing their

cash based on experience or instinct. Some vendors who keep basic bookkeeping

records can plan expenses, find ways to save money, and manage cash flow

better. However, most vendors do not have long-term plans or budgets, which

makes it harder for them to predict income, control costs, and improve their

business over time (Thangaraj & Kishore, 2023).

Keeping proper financial records helps street vendors plan their business.

By recording sales, expenses, and receipts, they can decide what to buy, manage

money better, and prepare for future needs. Even without formal budgets or long-

term plans, vendors can plan daily operations and control cash flow by tracking

their financial activities. This shows that planning in informal businesses is often

based on careful record-keeping rather than formal planning tools (Alfon, 2018).

Reporting refers to the preparation and use of financial information to

understand business performance. Suroso and Ardansyah (2024) explained that

street vendors usually keep simple notes of daily sales and expenses instead of
formal financial reports. Likewise, Alfon (2018) observed that vendors use these

records mainly to track cash flow and support daily decisions. Khadim and

Choudhury (2024) emphasized that even simple reporting through consistent

record-keeping can help small business owners understand their financial

condition and improve performance. These studies indicate that reporting among

street vendors is informal but still important for basic financial control.

Street vendors in Bandar Lampung usually keep simple notes of their daily

money, like how much they spent and earned. Most vendors do not prepare formal

financial reports or statements. They understand that keeping good financial

records is important for managing their business and for applying for loans from

the government or banks. However, their reporting is informal and mostly for

tracking daily sales and expenses, rather than following official accounting

standards. These simple notes help them make basic decisions about their

business, even if they cannot support larger or strategic decisions (Suroso &

Ardansyah, 2024).

Street vendors mostly do informal reporting using the records they keep.

They use notes of daily sales, expenses, and receipts to track cash flow and see

how their business is doing. They do not create formal financial statements, but

these records act as a simple way to report daily business activities and help them

make decisions. Keeping proper records also allows vendors to provide

information when applying for loans or financial help (Alfon, 2018).

In micro and small enterprises, reporting is done through proper record-

keeping. Even if formal financial statements are not made, keeping records of
sales, expenses, and transactions helps owners see how their business is

performing. These records act as a simple reporting system, allowing them to

make decisions and follow regulations. Consistent and accurate documentation

helps businesses understand their finances and plan better (Khadim & Choudhury,

2024).

Street vendors do not make formal financial reports, but they keep informal

records of daily sales, expenses, and cash flow. These records help them see how

their business is doing and make decisions for daily operations. Even though

reporting is informal, keeping these records helps vendors understand financial

patterns, manage money, and plan purchases, acting as a basic way to report their

business activities (Carel, Maraya, & Torreros, 2024).

Reporting is an important part of managing finances for small businesses.

Owners use financial statements like income statements, balance sheets, and

cash flow statements to understand how their business is doing. Reporting helps

them track money coming in and going out, make decisions, plan budgets, and

manage the business better. Even informal reporting, such as notes or interviews,

can give insights into financial practices and help ensure accountability. Keeping

good reports helps business owners see results, make smart decisions, and grow

their business (Moore, 2022).

Analysis involves examining financial information to evaluate business

performance and support decision-making. Kurnia et al. (2023) found that many

street vendors have difficulty analyzing profits because they do not separate costs

properly and rely on estimates. Similarly, Thangaraj and Kishore (2023) reported
that limited financial analysis makes it hard for vendors to identify losses or

improve income. However, Bayan and Valdez (2015) showed that profit analysis

using simple measures such as gross and net profit margins helps identify factors

affecting profitability. These findings suggest that financial analysis is limited

among street vendors but plays an important role in improving business decisions.

The study explains that many street vendors in Pringapus Village do not

know how to properly analyze their daily profits. Most vendors only estimate profit

based on their personal experience and simple thinking, instead of using correct

analysis methods. They often do not separate gross profit, operating costs, and

other expenses, which makes profit analysis inaccurate. The study also found that

age and low education are the main reasons why vendors have difficulty analyzing

profits correctly. Although a few vendors are able to analyze profits better, they still

face problems when costs increase or when sales are low, which makes profit

analysis more difficult (Kurnia et al., 2023).

The study explains that analysis is an important part of how street food

vendors understand their business performance. The researchers analyzed the

vendors’ profitability using gross profit margin and net profit margin, which helped

show how well vendors-controlled costs and earned profit from sales. The study

also included competitor analysis, where vendors observed the prices, products,

and strategies of other sellers in the same area. In addition, statistical analysis was

used to examine the relationship between retail strategies and profitability,

showing which practices affected profit levels. However, this type of analysis was

mostly done by the researchers, not by the vendors themselves, indicating that
vendors have limited ability to conduct proper financial analysis on their own

(Bayan & Valdez, 2015).

Street food vendors in Rotunda study their business to make better

decisions. They watch which products sell well and how customers respond to

prices and promotions. They also pay attention to customer feedback and market

changes. Using this information, they adjust their prices, offer discounts, or

introduce new products. Even without formal business tools, these actions show

that vendors carefully examine their sales and customers to improve their profit

(Dano et al., 2025).

Street vendors usually do not analyze their finances in a detailed way.

Those who keep basic bookkeeping records sometimes look at daily income,

expenses, and cash flow to help make decisions about prices, purchases, or stock.

However, most vendors rely on memory or experience instead of reviewing their

records carefully. This limited analysis makes it hard for them to find ways to save

money, track profits accurately, or make smart business decisions to improve their

income (Thangaraj & Kishore, 2023).

Street vendors use the records they keep to understand how their business

is doing. They look at sales, expenses, and receipts to see trends, calculate profits,

and decide what to buy or how to manage cash. Most vendors do this informally,

using memory or simple calculations instead of systematic methods. Keeping

proper records helps them analyze their financial performance better and make

smarter business decisions (Alfon, 2018).

 The reviewed studies show that financial management practices among

street vendors are generally simple and informal. Accounting, planning, reporting,

and analysis are often based on experience rather than structured methods.

However, the literature agrees that even basic financial management practices

help vendors control costs, understand their finances, and improve business

performance (Kurnia et al., 2023; Thangaraj & Kishore, 2023; Suroso &

Ardansyah, 2024). This supports the need to examine financial management

practices as an important factor influencing profitability.

Profitability

Profitability refers to the ability of a business to generate income after

covering expenses. Kurnia et al. (2023) explained that inaccurate profit calculation

among street vendors leads to poor understanding of business performance.

Similarly, Bayan and Valdez (2015) found that profitability among street food

vendors depends on proper cost control and pricing strategies. In addition, Suroso

and Ardansyah (2024) noted that vendors with better financial records are more

aware of their profit levels and are able to sustain their business operations. These

studies show that profitability is closely linked to how well vendors manage and

monitor their finances.

An inventory of authors supports the importance of profitability in informal

businesses. Bayan and Valdez (2015), Kurnia et al. (2023), and Suroso and

Ardansyah (2024) all emphasized that profitability allows street vendors to sustain
operations and support their livelihood. While Bayan and Valdez (2015) focused

on pricing and cost control, Kurnia et al. (2023) highlighted accurate profit

measurement, and Suroso and Ardansyah (2024) emphasized record-keeping.

Despite different approaches, these studies agree that profitability is a key

indicator of business success among street vendors.

Sensing. The study explains that analysis is an important part of how street

food vendors understand their business performance. The researchers analyzed

the vendors’ profitability using gross profit margin and net profit margin, which

helped show how well vendors-controlled costs and earned profit from sales. The

study also included competitor analysis, where vendors observed the prices,

products, and strategies of other sellers in the same area. In addition, statistical

analysis was used to examine the relationship between retail strategies and

profitability, showing which practices affected profit levels. However, this type of

analysis was mostly done by the researchers, not by the vendors themselves,

indicating that vendors have limited ability to conduct proper financial analysis on

their own (Bayan & Valdez, 2015).

Street food vendors in Rotunda pay attention to their customers and the

market to find chances to grow their business. They notice which foods customers

like, how much money they can spend, and which products are popular. Some

vendors also watch social media to see what new products people want. By

carefully observing these things, vendors can understand customer needs and

plan their business to attract more customers and increase sales (Dano et al.,

2025).
 The study explains that street vendors show the ability to sense financial

conditions through their awareness of daily cash flow, financial needs, and

available financial options. Vendors with higher education, more business

experience, and better financial knowledge are more aware of their current and

future financial situations. They are able to recognize risks and needs, such as the

importance of saving, managing cash balances, and understanding financial

products. This awareness helps them identify financial opportunities and

challenges in their environment, even though the study does not directly use the

term “sensing.” Overall, financial knowledge and experience help street vendors

better understand their financial situation, which reflects the sensing capability in

managing their livelihood (Ramana & Muduli, 2018).

Street vendors in Davao City notice changes in their business and

customers to find opportunities. They watch daily sales, what customers like, and

which products sell well. Even without formal records, they pay attention to these

patterns and decide things like how much stock to buy or how long to stay open.

This shows that vendors are aware of their market and can sense opportunities to

keep or increase their income (Aplaon, Paguio, & San Jose, 2016).

Street vendors notice changes in their business and customers to find

opportunities. They watch daily sales, what products customers like, and when

sales go up or down. Even without formal records, they pay attention to these

patterns to decide how to run their business. This shows that vendors are aware

of their market and can sense opportunities to keep or increase their income

(Thangaraj & Kishore, 2023).

 Street vendors in Pringapus Village pay attention to changes in their

business and customers to find opportunities. They watch daily sales, what

customers like, and changes in prices of raw materials. Even without formal

records, they notice which products sell more and when demand is higher. This

helps them respond quickly to changes and make decisions to keep or improve

their income (Kurnia, Rahaya, & Intiar, 2023).

Seizing. The study shows that street food vendors practice seizing by taking

action after identifying opportunities and challenges in their business environment.

Vendors respond to market conditions by applying cost-based pricing, offering

customer discounts, choosing suitable promotion methods such as word-of-mouth,

and deciding on working days and storage practices. Many vendors also seize

opportunities by selling products that match customer demand and by operating in

locations with high customer traffic. These actions help vendors convert

opportunities into actual sales and profits. Although these decisions are mostly

short-term and experience-based, they show that vendors actively use available

resources to improve profitability, which reflects seizing behavior in an informal

manner (Bayan & Valdez, 2015).

Street food vendors in Rotunda use opportunities they notice to grow their

business. They attract customers by talking to them, calling out their products, and

sometimes entertaining them with dancing. They also give discounts, promotions,

or extra items to encourage more sales. These actions show that vendors act

quickly on opportunities to increase their sales and profit (Dano et al., 2025).
 The study shows that street vendors demonstrate seizing capability by

taking action based on their financial knowledge and awareness. Vendors who

have higher financial capability are better at using financial products, such as bank

accounts and savings tools, and at planning how to manage their money to meet

daily and future needs. The study also explains that vendors with better education,

experience, and access to banking services are more likely to make informed

financial decisions and use available financial opportunities effectively. These

actions reflect the ability to seize opportunities by applying financial knowledge and

resources to improve their financial situation, even though the study does not

directly discuss profitability or use the term “seizing” (Ramana & Muduli, 2018).

Street vendors act on the opportunities they notice in their business. They

change how much money they spend, decide how much stock to buy, and

sometimes borrow money to keep their business going. By paying attention to

sales and customer demand, they take quick actions to increase income or avoid

losses. This shows that vendors can seize opportunities in the market to grow their

business and earn more money (Thangaraj & Kishore, 2023).

Street vendors in Pringapus Village take action on the opportunities they

notice to improve their business. They decide how much stock to buy, manage

their daily spending, and sometimes borrow money to keep their business running.

By looking at sales trends, what customers like, and changes in prices, they make

quick decisions to increase income or avoid losses. This shows that vendors can

seize opportunities to maintain and grow their business (Kurnia, Rahaya, & Intiar,

2023).
 Transforming. Street food vendors in Rotunda change and improve their

business to stay successful. They adjust recipes, try new products, or move their

selling location based on what customers want and how the market changes.

Some vendors also use experience from their family business or ideas from social

media to make their business better. These actions show that vendors adapt their

business to keep customers happy and earn more profit over time (Dano et al.,

2025).

Street vendors in Coimbatore improve and change the way they manage

money to make their business and life better. They set long-term financial goals,

use mobile phones for payments, handle debt carefully, and make smart choices

about spending and saving. Even though they have limited access to banks and

formal financial services, they adjust their financial habits to meet challenges and

become more stable. This shows that vendors can transform their money

management to grow their business and improve their income (Anuradha &

Anupriya, 2024).

Street vendors change and improve the way they manage money to keep

their business running and grow it. They adjust how they spend money, manage

cash, and keep better records as they gain experience. By learning from daily

operations and noticing what works well, they make better decisions, handle cash

flow more effectively, and deal with problems in the market. This shows that

vendors can transform their financial practices to maintain their business and

increase their income (Thangaraj & Kishore, 2023).

 Street vendors in Pringapus Village change and improve how they run their

business over time. They adjust how they use money, manage daily spending, and

keep track of sales and stock based on what they learn from experience. By

observing daily operations and seeing what works best, they make better

decisions, handle cash more effectively, and respond to challenges. This shows

that vendors can transform their business practices to maintain and increase their

income (Kurnia, Rahaya, & Intiar, 2023).

The literature shows that profitability among street vendors is affected by

cost control, pricing decisions, and accurate financial records. Vendors who

understand their income and expenses are better able to manage their business

and respond to challenges. These findings suggest that profitability is not only

influenced by sales volume but also by how financial activities are managed,

supporting the focus of the present study.

General Summary of the Review of Related Literature

The reviewed literature shows that financial management practices,

including accounting, planning, reporting, and analysis, play an important role in

shaping the profitability of street vendors. Most studies indicate that street vendors

rely on informal and experience-based financial practices, which often lead to weak

profit management. At the same time, the literature suggests that even basic

financial management practices can improve profitability and business

sustainability. These findings are relevant to the present study, which aims to
examine the relationship between financial management practices and profitability

of street vendors in San Francisco, Agusan del Sur, to provide evidence that may

support local development programs and policy interventions.

Correlation Between Measures

This section discusses the correlation, association, and linkages between

financial management practices and profitability based on existing literature.

Financial management practices, particularly accounting, planning, reporting, and

analysis, are widely recognized as key determinants of business performance,

especially among small and informal enterprises such as street vendors.

Profitability, as a measure of financial performance, reflects the ability of vendors

to generate income after covering costs. Numerous studies suggest that

improvements in financial management practices are associated with higher

profitability, business sustainability, and improved decision-making.

Correlation Between Financial Management Practices and Profitability

Several studies establish a positive correlation between financial

management practices and profitability among micro, small, and informal

businesses. Financial Management Theory emphasizes that proper handling of

financial resources enables business owners to control costs, optimize income,

and improve overall financial outcomes. When vendors systematically record

transactions, plan expenses, and analyze financial information, they gain a clearer
understanding of their business performance, which contributes to higher

profitability.

Kurnia et al. (2023) found that street vendors who failed to keep accurate

financial records often miscalculated profits, leading to weak financial decisions

and unstable income. In contrast, vendors who practiced even basic accounting

methods were better able to track expenses and recognize actual earnings.

Similarly, Suroso and Ardansyah (2024) reported that vendors who consistently

recorded sales and expenses showed greater awareness of their profit levels and

demonstrated improved financial stability. These findings indicate a direct

association between financial management practices and profitability.

The literature also suggests that financial management practices do not

operate independently but function as interconnected components within a

system. Systems Theory explains that weaknesses in one area, such as poor

accounting or lack of reporting, negatively affect analysis and decision-making,

which in turn reduces profitability. Conversely, consistent application of financial

management practices strengthens the overall financial system of the business,

leading to improved profit performance.

Correlation Between Accounting Practices and Profitability

Accounting practices are strongly linked to profitability as they provide the

foundation for understanding income, expenses, and net earnings. Studies

consistently show that street vendors who rely solely on memory for financial
tracking are more likely to underestimate costs and overestimate profits. This

results in poor pricing decisions and reduced financial sustainability.

Bayan and Valdez (2015) demonstrated that street food vendors who used

cost-based pricing and simple profit computations achieved better profit margins

than those who did not consider full production and operating costs. Similarly,

Thangaraj and Kishore (2023) emphasized that vendors who kept written records

were better able to identify profit patterns, control unnecessary expenses, and

improve business performance. These findings suggest a positive correlation

between accounting practices and profitability.

Furthermore, accounting enables vendors to calculate profitability

measures such as gross profit margin and net profit margin, which serve as

indicators of financial performance. Without accurate accounting data, vendors are

unable to determine whether their business operations are profitable. Thus, the

literature supports the assumption that improved accounting practices are

associated with higher profitability among street vendors.

Correlation Between Financial Planning and Profitability

Financial planning is another important measure linked to profitability.

Planning involves deciding how financial resources will be allocated to support

business operations. Although planning among street vendors is often informal and

short-term, studies indicate that even basic planning activities contribute to

improved profitability.
 Bayan and Valdez (2015) found that vendors who planned pricing,

operating days, and product offerings based on experience and cost

considerations were more likely to sustain their businesses. Thangaraj and Kishore

(2023) reported that vendors who maintained basic financial records were better

able to plan expenses and manage cash flow, which resulted in more stable

income. These findings indicate that planning practices, even when informal, are

associated with improved profitability.

Dynamic Capabilities Theory further explains this relationship by suggesting

that vendors who can anticipate expenses, adjust pricing, and allocate resources

effectively are better able to respond to changing market conditions. This adaptive

behavior enables vendors to maintain or improve profitability despite uncertainties

such as fluctuating demand or rising costs. Thus, financial planning is positively

correlated with profitability.

Correlation Between Financial Reporting and Profitability

Financial reporting, although informal among street vendors, plays a

significant role in profitability by providing information for monitoring business

performance. Studies show that vendors who keep simple records of sales and

expenses are more aware of cash flow patterns and profit levels.

Suroso and Ardansyah (2024) noted that vendors who maintained daily

financial notes were better equipped to track earnings and expenses, allowing

them to make informed decisions that supported profitability. Khadim and

Choudhury (2024) emphasized that consistent record-keeping functions as a basic

reporting system that helps small business owners understand financial

performance and identify areas for improvement.

Reporting supports Rational Decision-Making Theory by providing the

information necessary for evaluating alternatives and selecting actions that

maximize profit. When vendors have access to financial data, they can make better

decisions regarding pricing, purchasing, and savings. Therefore, the literature

supports a positive association between financial reporting practices and

profitability.

Correlation Between Financial Analysis and Profitability

Financial analysis involves examining financial data to assess performance

and guide decision-making. Studies indicate that limited financial analysis among

street vendors often results in poor understanding of profitability. Vendors who do

not separate costs properly or rely on estimates tend to misinterpret financial

outcomes, leading to ineffective decisions.

Kurnia et al. (2023) found that vendors who lacked the ability to analyze

profits accurately experienced difficulty controlling expenses and improving

income. In contrast, Bayan and Valdez (2015) showed that analyzing gross and

net profit margins helped identify factors affecting profitability. These findings

suggest that financial analysis is positively correlated with profitability.

Even informal analysis, such as reviewing sales trends or comparing daily

income and expenses, allows vendors to recognize profitable products and adjust

business strategies accordingly. According to Rational Decision-Making Theory,

access to analyzed financial information enables vendors to make rational choices

that improve profitability. Thus, financial analysis is an important measure

associated with profit performance.

Overall, the literature supports a strong correlation between financial

management practices and profitability. Accounting, planning, reporting, and

analysis are interconnected measures that collectively influence business

performance. Financial Management Theory explains that proper financial

practices enhance efficient resource utilization, while Systems Theory highlights

the interdependence of financial processes. Dynamic Capabilities Theory further

supports the idea that vendors who adapt financial practices to changing

conditions are more likely to achieve higher profitability.

In the context of street vendors, where operations are informal and

resources are limited, even basic financial management practices contribute

significantly to profitability. The reviewed studies consistently show that vendors

who practice systematic financial management, regardless of formality, are better

able to control costs, make informed decisions, and sustain their businesses.

These findings support the present study’s assumption that financial management

practices are significantly correlated with the profitability of street vendors in San

Francisco, Agusan del Sur

Theoretical Framework

This study examines the influence of financial management practices on the

profitability of street vendors in San Francisco, Agusan del Sur. Financial

management practices serve as the independent variable (IV), operationalized

through accounting, planning, reporting, and analysis, while profitability serves as

the dependent variable (DV) and is discussed in relation to the vendor’s ability to

maintain and improve income outcomes amid changing market conditions. This

framework is anchored on Financial Management Theory and Dynamic

Capabilities Theory, supported by four additional theories/models that explain why

and how financial management practices translate into higher profitability.

Figure 1. Financial Management Theory – Independent Variable

Theory for the Independent Variable: Financial Management Theory

Financial Management Theory explains that business performance and

profitability improve when financial resources are properly planned, recorded,

monitored, and evaluated. The theory emphasizes the role of financial functions—

such as budgeting, cash flow management, cost control, and record keeping—in

maximizing returns and ensuring business sustainability. In this study, the theory

directly anchors the assumption that street vendors who consistently practice

accounting, planning, reporting, and analysis are more capable of controlling costs,

using limited capital efficiently, and making actions that improve profitability.

(Brigham and Ehrhardt (2008)).

Figure 2. Dynamic Capabilities Theory – Dependent Variable

Theory for the Dependent Variable: Dynamic Capabilities Theory

 Dynamic Capabilities Theory explains that sustained performance depends

on a firm’s ability to sense opportunities/threats, seize opportunities through

decisions, and transform resources and routines to remain viable in changing

environments. Applied to street vending, profitability is not only determined by

today’s sales but also by the vendor’s capability to adjust pricing, manage costs,

respond to demand shifts, and improve routines over time. Financial management

practices provide the information base that strengthens these capabilities—

recorded transactions help vendors sense patterns; planning and analysis help

them seize opportunities; and consistent reporting and evaluation support

transforming practices that sustain profitability. (Teece (2018)).

Support Theory 1: Systems Theory

Systems Theory views an organization as a set of interconnected parts

where change in one part affects the whole system. In financial management,

accounting, planning, reporting, and analysis function as an interrelated cycle.

Poor accounting may lead to weak reporting, which limits analysis and results in

poor planning—eventually affecting profitability. Conversely, improvements in any

one component can strengthen the entire financial system and raise profitability

through better coordination and control. (Skyttner (2016)).

Support Theory 2: Bounded Rationality and Decision-Making

Rational Decision-Making Theory explains that decision quality improves

when individuals evaluate reliable information and choose actions that maximize

desired outcomes. In business settings, financial records and reports serve as key
inputs for rational decisions regarding pricing, purchasing, expense control, and

reinvestment. In this study, financial management practices generate the

information that vendors can use to make better decisions, which logically

increases profitability. Without financial information, decisions become guess-

based, increasing the risk of losses or inefficient spending. (Kahneman (2017)).

Support Theory 3: Resource-Based View

The Resource-Based View (RBV) argues that organizations gain superior

performance when they possess valuable and well-developed internal resources

and capabilities. In informal microbusinesses, structured financial routines—such

as consistent recordkeeping, budgeting habits, and simple financial analysis—can

function as internal capabilities that improve efficiency and reduce waste. These

capabilities help vendors manage capital better than competitors, supporting

higher profitability. In this study, financial management practices are treated as

internal capabilities that can strengthen performance outcomes. (Barney, Ketchen,

and Wright (2016)).

Support Theory 4: Small Business Financial Capability Model

The Organisation for Economic Co-operation and Development (OECD)

explains that financial capability, including budgeting, record keeping, and financial

planning, helps small businesses improve stability and profitability. Financial

capability allows owners to understand cash flow and manage risks.

 Financial Management Theory explains the direct link between financial

management practices and profitability. Dynamic Capabilities Theory explains how

vendors adjust to changes. Systems Theory explains how financial practices work

together. Decision-Making Theory explains how financial information improves

choices. The Resource-Based View explains financial practices as useful internal

skills and financial capability model explain financial practices as useful skills..

Together, these theories explain how financial management practices influence

the profitability of street vendors in San Francisco, Agusan del Sur.

CONCEPTUAL FRAMEWORK

INDEPENDENT VARIABLE DEPENDENT VARIABLE

FINANCIAL MANAGEMENT PROFITABILITY

PRACTICES

• Accounting • Sensing

• Planning • Seizing

• Reporting • Transforming

• Analysis

Brigham and Ehrhardt (2023) Nayernia, H. (2025)

Significance Of The Study

This study is important because it adds to existing studies about financial

management and profitability, especially among small and informal businesses.

Many past studies focus on large or formal organizations, while fewer studies focus

on street vendors. This study helps fill that gap by looking at how simple financial

practices, such as record keeping, planning, and reviewing expenses, affect

profitability. The study also has social value because street vendors depend on

their daily income to support their families. If their profitability improves, it can help

them meet basic needs such as food, education, and health expenses.

This study will be helpful to street vendors in San Francisco, Agusan del

Sur because it can guide them in managing their money better. It may also help

local government units and organizations that support small businesses by

providing information for training and livelihood programs. Schools and students

may use this study as a reference for topics related to financial management and

small businesses. Lastly, future researchers may benefit from this study as it can

serve as a basis for further research on financial management practices and

profitability in other areas or among other informal businesses.

Definition Of Terms

Financial Management Practices

refer to the ways street vendors manage their money in this study, specifically

through accounting, planning, reporting, and analysis.

Accounting

refers to how street vendors record and keep track of their daily sales, expenses,

and costs in order to know their income and profit.

Planning

refers to how street vendors decide in advance how to use their money, such as

budgeting for expenses, buying supplies, and managing daily operations.

Reporting

refers to how street vendors record and use financial information, such as notes of

daily sales and expenses, to understand how their business is performing.

Analysis

refers to how street vendors examine their sales, expenses, and profits to make

decisions about pricing, spending, and improving their business.

Profitability

refers to the ability of street vendors to earn income after covering all expenses,

as measured in this study through their capacity to sense, seize, and transform

business opportunities.

Sensing

refers to the ability of street vendors to notice changes in sales, costs, customer

demand, and market conditions that may affect their income.

Seizing

refers to the ability of street vendors to take action based on opportunities they

notice, such as adjusting prices, controlling expenses, or increasing sales

activities.

Transforming

refers to the ability of street vendors to change or improve their financial practices

and business activities over time to maintain or increase profitability.