Abstract: All businesses are created in order to make profits and consequently maximize shareholders wealth. Working capital is important because it provides a measure of a firm’s ability to meet its short term debt obligations from its holding of current assets. A number of factors have been identified before as influencing the working capital ratios in organisations. These include cash conversion cycle, operating cash flow, leverage, firm size, return on assets, interest rate on loans, and economic growth of a country. This study is intended to assess the determinants of working capital requirements in the Technical University of Mombasa. The university has been selected given that it is one of the recently created public universities having transited from being a technical college and therefore the management of its working capital is important for its survival. Further, the working capital management is important for public universities in Kenya as there is currently no study that has addressed this issue in the public universities in Kenya. Available studies have mostly focused on listed firms. The study is designed as a descriptive study. The focus focused on the Technical University of Mombasa and therefore the sample was restricted to the annual reports of the university from 2010 to 2012. Desk review was used to collect and analyse the data. The study finds that working capital requirements of TUM are influenced by its size, nature of business, credit period, seasonality, and potential growth, changes in price levels, access to money markets, working capital cycle and the efficiency of operations.
Keywords: Working Capital, Public Universities, Technical University of Mombasa, Kenya.
Title: Determinants of Working Capital Requirements in Public Universities in Kenya: A Case of Technical University of Mombasa
Author: UMULKULTHUM MUSA YEYA
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
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