The Relationship Between Working Capital Management and Financial Perfomance of Private Hospitals in Kenya
Abstract
The study looked into the effect of working capital management on the profitability of
private hospitals in Kenya. The data analysis was carried on 10 private hospitals for a
period of 10 years between 2003 and 2012. The relationship of average collection
period, inventory conversion period and average payment period with return on assets
employed was analyzed in this study. The study applied correlation analysis and
group wise weighted least squares regression analysis to identify the effects of these
variables on profitability. The correlation analysis shows that the hospitals'
profitability is influenced by the variables relating to working capital. There is a
positive relationship between profitability and Average collection period and
inventory conversion period. Average payment period shows a negative relationship
with profitability.
Citation
Master Of Business AdministrationPublisher
University of Nairobi