The relationship between liquidity and leverage of companies quoted at the NSE
Abstract
The objective of the study was to determine the relationship between liquidity and leverage of
companies quoted at the NSE. The study considered thirty companies out of forty seven
quoted firms at the NSE between 2006 to 2010. Secondary data was collected from the
financial statements of individual companies and analyzed using multivariate regression
analysis. The t statistics and F significance ANOVA were used to test the hypothesis.
The findings revealed that there is negative insignificant relationship between liquidity and
leverage. Firms adopt the best market practices by putting in place good working capital
management practices and short cash conversion cycles. The study is in agreement with other
studies done in developing countries that portray negative relationship between liquidity and
leverage.
Citation
MBA ThesisSponsorhip
University of NairobiPublisher
School of Business, University of Nairobi