| dc.description.abstract | This study sought to establish the effect of sin activities on the financial performance of
companies listed at the Nairobi Securities Exchange. The study adopted a descriptive
research design with the population consisting of all 63 listed firms in the NSE as at
December 2013. The sample of the study consisted of the 20 high performing NSE
companies. At the time there are only two sin companies in this index listed. Furthermore this
study grouped 18firms into the non-sin companies‟ category and another 2 firms (BAT ad
EABL) into the sin companies group. Secondary data was gathered from NSE financial
reports data base for analysis which was done using the Statistical Package for Social
Sciences (SPSS version 19) to generate the descriptive statistics and also to generate the
trends results and correlation findings. One sampled T-Test was used to check whether the
mean performance of Sin companies differ from the mean performance of non-sin
companies. Findings on the analysis of variance (ANOVA) indicate that the overall model
was statistically significant as indicated by an F statistic of 2.943 and p value less than
0.0498. The regression analysis revealed that the independent variables including log of asset
which was used as a measure of companies total assets base and compounded annual growth
rate which the measure of the company‟s growth rate were considered statistically significant
in explaining the variation of financial performance of companies. Regression analysis results
also showed that the relationship between log of assets, compounded annual growth rate and
return on asset was positive. Nevertheless, some independent variables were insignificant as
their p values were greater than 0.05. They include companies‟ age, leverage ratio and
working capital ratio. This indicates that these variables are not key indicators of companies‟
financial performance. Correlation analysis results, T-tests statistics in general indicate that
Sin companies‟ financial performance is higher compared to non-sin companies because of
the factors such as high total assets base, higher compounded annual growth rate, higher
working capital ratio, and lower leverage ratio. This study provides recommendations to
financial managers to ensure that strategies are set aside to address key critical financial
decisions arising in the company particularly developing good financial management
technique to provide adequate responses to financial challenges and ensure effective working capital management. | en_US |
