| dc.description.abstract | Corporate financial managers identify working capital as being important to firm's value.
Working capital management is defined as the ability of an organization to fund short
term assets and short term liabilities .The objectives of the study was to establish working
capital policies adopted by quoted companies at NSE and to establish the influence of
working capital management policy on financial performance. This study was premised
on three theories to explain the management of working capital. They include; the
quantity theory of money, the Keynesian theory of money, Baumol inventory model, the
modern quantity theory, the Miller and Orr's cash management model, the treasury
approach to cash management and operating cycle theory. The research adopted
correlation research design to establish the relationship between working capital
management policies and firm's performance for firms listed the NSE. To establish the
causal relationship multiple regressions was used as a tool of data analysis for the study
covering a period of five years from 2008 to 2012.Data was represented using tables.
The population of the study included all the firms listed at the NSE from which a sample
of sixteen Companies was selected. The study sought to establish the relationship
between the degree of working capital management policy and fmancial performance for
firms listed at the NSE. From the results it was concluded that working capital policy
affects performance of a company. The value of R-square was 0.194. This means that
19.4% of the changes in dependent variables could be explained by explanatory variables
while 80.6 % cannot be explained by explanatory variables hence error term. Conclusions
from this study could assist fmancial managers to make prudent decisions on working
capital management. | en_US |
