Effect of Budgetary Controls on Financial Performance of Agro-veterinary Medicine Manufacturing Companies in Kenya
Abstract
The main objective of this study was to establish the effect of budgetary controls of financial performance of agro-veterinary medicine manufacturing companies in Kenya. The study was founded on two theories namely: Cognitive Evaluation Theory and agency theory. A descriptive research design was adopted and the unit of observation comprised of all the 28 companies registered in Kenya for the manufacture of agro-chemicals in Kenya. Census study approach was used and involved all the 28 companies. Secondary data were gathered through a document review guide, and ran through STATA version 14. Descriptive and inferential analysis were carried out. The correlation analysis results indicated that there was a strong positive and significant association between firm size and ROE, also the results indicated that there was strong positive and significant association between PVR and ROE and lastly, there was a negative and significant association between labor productivity and ROE. Regression analysis results showed that budgetary control on financial performance explained up to 69.68% of variations in financial performance of agro-veterinary medicine manufacturing companies in Kenya. This was based on the resultant determinant coefficient (R2) value equivalent to 0.6968. The results further indicated that during the study period 2013 – 2017 holding other factors constant at zero, a unit increase in PVR led to 1.206 units increase in financial performance, the P value was less than the significance level alpha = 0.05 implying that the relationship was positive and statistically significant. Also a unit increase in firm size led to 3.527 units increase in financial performance, the P value was less than the significance level alpha = 0.05 implying that the relationship was positive and statistically significant. Lastly, a unit increase in labor productivity led to 0.513 units increase in financial performance, the P value was less than the significance level alpha = 0.05 implying that the relationship was positive and statistically significant. It was concluded that there was a strong positive and significant correlation between firm size and ROE, there was strong positive and significant association between PVR and ROE and lastly, there was a negative and significant relationship between labor productivity and ROE. It was recommended that budgetary controls are important in influencing financial performance of agro veterinary Medicine Companies in Kenya.
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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