| dc.description.abstract | Although many business people make decisions on profitability and relate them to the
value of firms quite well at a decision making level, this relationship is not clear to many
of them. In Kenya, Financial managers struggle to understand the relationship but no
study has been done to affirm the decisions. There is therefore a staring gap and this is
the reason for which this study has been done to find out if there is any relationship
between the Net Operating Income, and the value of firms quoted at the Nairobi Stock
Exchange.
To achieve this objective, regression analysis was used to establish the relationship. FANOVA
test showed that the relationship is statistically significant for all the firms under
study. The study failed to reject the hypothesis that there is no significant relationship
between the Net Operating Income and the value of the firm. That means that the Net
Operating Income has a significant effect in the value of the firms quoted at the Nairobi
Stock Exchange. The y-intercept showed a significant value of y meaning that there are
other factors that significantly affect the value of the firm, other than the profit. | en |
