The Working Capital Management and the Financial Performance Among Selected Deposit Taking Micro Finance Institutions in Kenya

Abstract

The significant section in the overall forecast of a firm’s performance financially is its management of working capital since it is one of many measures that enable a firm balance profitability and liquidity through creating its short-term finance. The study was done to investigate the relation that is there between the management of working capital and its financial performance of selected micro finance institutions in Kenya that are deposit taking. Adoption of descriptive research design with quantitative techniques using the cross tabulation and correlation analysis utilizing the variables of current ratio and cash ratio as variables that are independent and the return on asset (ROA) as the variable that is dependent. Data population comprising of thirteen (13) deposit taking microfinance institutions reducing it to five (5). The findings of the study showed a positive relationship between the working capital management and the financial performance of the deposit taking microfinance institutions in Kenya.