Effect of Selected Firm Characteristics on Financial Performance of Firms Listed in the Nairobi Securities Exchange
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Date
2017Author
Mwebia, Rosemary K
Type
ThesisLanguage
enMetadata
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This study sought to establish the effects of selected firm characteristics on firm financial performance of firms listed in the Nairobi Securities Exchange. The study was anchored on Resource based theory, trade off theory and organizational theory. This study adopted a descriptive research design which aims at testing associations of relationships. The population of this study comprised all firms listed in the Nairobi Securities Exchange (NSE). The study collected secondary data of the listed firms for the five years between 2011 and 2015. The data collected was analyzed using Statistical Package for the Social Sciences (SPSS) software. To test the effects of the selected firm characteristics on performance, a multivariate regression analysis was used to study the relationship between the dependent and the independent variables. The study established that leverage had a weak positive significant correlation with financial performance; liquidity had a strong positive significant correlation with financial performance; size had a strong positive significant correlation with financial performance; asset tangibility had a strong positive significant correlation with financial performance, age had a strong positive significant correlation with financial performance. The study concludes that there is a moderate relationship between leverage and financial performance of firms listed on NSE, liquidity is s significant factors affecting financial performance of firms listed on NSE, size significantly affects financial performance of firms listed on NSE; asset tangibility is a significant factor affecting financial performance of firms listed on NSE. Age significantly affects financial performance of firms listed on NSE. The study recommends that the top management of all firms listed at NSE should judiciously combine both debts and equities in their capital structures to enhance the value of their firms. Listed firms should strive to remain liquid at all times through efficient working capital management practices. The top management of listed firms should set up strategies of growth and expansion in sizes for example growth in market segments and shares. Listed firms and all companies generally in Kenya should keep sufficient amount of fixed assets in relation to current assets which shall increase their accessibility to capital from financial and other lending institutions.
Publisher
University of Nairobi
Rights
Attribution-NonCommercial-NoDerivs 3.0 United StatesUsage Rights
http://creativecommons.org/licenses/by-nc-nd/3.0/us/Collections
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