| dc.description.abstract | Working capital management is a very pertinent determinant of liquidity and profitability
of organizations. Short term management of corporate finances is a leeway for success
and survival of the firms in the future. Efficient management of working capital cannot
be ignored if the firm is to attain stable profitability and cash flows. This research sought
to determine the effects of working capital management on profitability of general trading
small and medium enterprises in Nairobi County. Descriptive research design was
adopted for this study in which secondary data from financial statements of small and
medium enterprises was gathered over the period 2010-2014. The collected data was
analyzed by use of Microsoft excel 2013 and statistical package for social sciences
(SPSS) version 17. Regression and correlation analysis were done to determine the
effects of working capital on profitability. It was established that working capital is
among the determinants of SMEs profitability of general trading SMEs in Nairobi County
though not very key. Average collection period and Average age of inventory were found
to be negatively related to profitability while a positive relation was noted between
average payables period and cash conversion cycle. The study recommends that for
general trading SMEs to remain profitable, efficient working capital management
practices should be employed. This is imperative in determining, the financing mix,
matching investment to organizational objectives, effective allocation of resources and
striking a balance between risk, liquidity and profitability. | en_US |
