The Effect of Cost Control on Financial Performance of Manufacturing Companies in Rwanda. A Case of BRALIRWA PLC (2018-2022)
DOI:
https://doi.org/10.53819/81018102t2345Abstract
The research was aimed at analyzing the effect of cost control on financial performance of manufacturing companies in Rwanda. The research was guided by the following specific objectives: to assess the relationship between setting standard and financial performance of Bralirwa Plc, to analyze the relationship between cost standard implementation and financial performance of Bralirwa Plc and to analyze the relationship between cost analysis and financial performance of Bralirwa Plc. The population in this study was 600 who are the employees of Bralirwa Plc working in different departments, including marketing and sales department, production department, procurement department, quality and assurance, auditing, inventory department, garage department, civil engineering department, finance department, accounting department and general service, however the researcher targeted 58 employees working in finance, accounting, internal control and procurement departments who considered the sample size of the research; they was selected using purposive sampling technique. Primary and secondary data was collected using questionnaire and documentary. The data was analyzed using SPSS to test the relationship between the cost control and financial performance of Bralirwa Plc. Descriptive statistics revealed strong positive correlations between cost control practices and the financial performance of Bralirwa Plc. Specifically, setting standard demonstrates a significant positive relationship (r = 0.813, p < 0.001), indicating that 81.3% of the variation in financial performance can be attributed to variations in setting standard. This aligns with our research objective, emphasizing the importance of well-structured setting standard processes. Findings also show a substantial positive relationship between standard costs implementation and financial performance (r = 0.745, p < 0.001), indicating that 74.5% of financial performance variation relates to standard costs implementation variations. This underscores the role of cost standard implementation in effective cost control and financial decision-makin. Moreover, a strong correlation (r = 0.781, p < 0.001) between cost analysis and evaluation and financial performance signifies that 78.1% of financial performance variation is associated with cost analysis and evaluation variation. In conclusion, this study highlights the symbiotic relationship between cost control and financial performance. By optimizing setting standard, cost standard implementation, and cost analysis practices, strategically affect the financial outcomes of Bralirwa Plc. However, for a better performance, Bralirwa Plc should prioritize the optimization of cost control practices, including setting standard, cost standard implementation, and cost analysis.
Key words: Cost control, financial and performance.
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