The Effect Of Inflation On Net Operating Cycle Of Listed Manufucturing Firms In The Nairobi Securities Exchange

Abstract

The main objective of the study was to establish the effect of inflation on net operating cycle of listed manufacturing firms in Kenya. It mainly focused on manufacturing firms in Nairobi County that were listed on the NSE starting from 2000-2015. The research used both descriptive research design. The quantitative research approach was employed to arrive at the findings of the study. The study found a positive relationship between inflation and the net operating cycle. Furthermore, the study found the regression coefficient for leverage and inflation to be positive. The study found a negative relationship between the fixed asset structure and inflation. The study recommended that there should be proper inventory management system in manufacturing firms to avoid over stock of inventory resulting efficient outcome of investment. The study further recommended that companies should engage in relationship with those suppliers who allow long credit time period and those customers who allow short payment period.