Effects of Working Capital Management on Financial Performance of the Manufacturing Firms Listed at Nairobi Securities Exchange
Abstract
Working capital influences decisions organizations make regarding financial
economics. This study conceptualized association between working capital
management and financial performance. Its primary goal was to evaluate the effects
of working capital management on financial performance of manufacturing firms
listed at Nairobi Securities Exchange. Information was obtained from secondary data.
Descriptive research design was adopted. Published record of nine manufacturing
firms for the period of 2012 to 2021 were used to obtain data. Eight firms were used
in the analysis due to data availability. Inferential statistics was used to test the
hypotheses. According to findings, working capital requirements, cashflow ratios and
liquidity ratios collectively and respectively significantly influenced manufacturing
firms’ performance. It was deduced that working capital management influenced
manufacturing firms’ financial performance. Hence, firms should put more emphasis
on working capital management. This study suggested that manufacturing firms
ought to have a good working capital management policy since it had significant
impact on their performance. This study further recommended that firms must look
at each component, that is, working capital requirements, cashflow ratios as well as
liquidity ratios since they collectively and respectively impacted on financial
performance
Publisher
University of Nairobi
Rights
Attribution-NonCommercial-NoDerivs 3.0 United StatesUsage Rights
http://creativecommons.org/licenses/by-nc-nd/3.0/us/Collections
- School of Business [1387]
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