Abstract: The study soughtto examine the effects of working capital management on financial performance of commercial and services firms listed in the NSE. Specifically, the study seeks to evaluate the relationship between accounts payable, accounts receivable, cash management, inventory management and financial performance of commercial and services firms. The study employed correlational research design. The study utilized secondary panel data collected using data collection sheets. The data covered a period of 7 years i.e. from 2010-2016. The target population consisted of 11 firms listed under commercial and services category in the NSE as at 31st December 2017. Panel data model was used for data processing and analysis. The collected panel data was analyzed using STATA 14. The study employed descriptive statistics to come up with mean, standard deviation, minimum and maximum values. Under quantitative analysis, Karl’s Pearson correlation, regression and Anova analysis were used. The study findings established a positive relationship between average payables period and financial performance, a negative relationship between average collection period and financial performance, negative relationship between inventory conversion period and financial performance, and a statistically significant effect of cash management denoted by cash conversion cycle on financial performance measured by ROA. The study recommended that the management of commercial and services companies to delay payment of creditors in as much as possible reduce accounts receivables period as much as possible, minimize the inventory conversion period by coming up with relevant policies and reduce cash conversion cycle period as possible.
Keywords: Deposit taking Savings and credit cooperatives, financial performance and Investment Portfolio.
Title: Effects of Working Capital Management on Financial Performance of Listed Commercial and Services Firms at Nairobi Securities Exchange, Kenya
Author: Nicholas Murigi Ngigi, Dr. Peter Wang’ombe Kariuki
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
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