The Relationship between Financial Management Practices and Financial Performance in the Shipping Industry in Kenya
Kiita, Geoffrey K
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This study was carried to achieve one key objective namely, to determine the relationship between financial management practices and financial performance of shipping companies in Kenya. A cross-sectional survey study of 36 respondents drawn from 9 out of the 21 registered shipping companies in Kenya was designed to assess the financial management practices of shipping companies operating within the country and how they affected their financial performance in an attempt to advice on best practice. Data was collected using a semi-structured questionnaire for employees in senior management positions in the financial and administrative departments within shipping companies. Data analysis and report of findings was done using descriptive statistics in the form of tables, frequencies and percentages. For analyses of the relationships between independent and dependent variables regression analysis was used. The results showed that the shipping companies had put in place various financial management practices to enable them attend to their financial management issues. The multivariate regression model used to determine the relationship between financial management practices and financial performance of shipping companies showed that the shipping companies’ overall financial performance were positively affected by the financial management practices. It is therefore recommended that the management of shipping companies consider putting in place the recommended steps seen as probable ways of ensuring that their financial management practices are improved for better return on assets.