MST-Department of Accounting and Finance

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Browsing MST-Department of Accounting and Finance by Author "Abdul, Farida ["

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    An investigation into the extent of application of the working capital management techniques by hire purchase companies in Nairobi
    (Kenyatta University, 2014-10-13) Kariuki, Morris lrungu; Abdul, Farida [
    The theory of working capital management contends that if working capital is managed according to prescriptive theory then it would be expected that businesses would invest in working capital, finance working capital, monitor factors that influence working capital, manage cash, accounts receivable, inventory, accounts payable, the cash conversion cycle(aggregate approach) and measure the performance by ratio analysis to ensure that long term assets(fixed assets) are utilized effectively and efficiently. This study analyzed the extent of application of Working Capital management techniques by 19 Hire Purchase (HP) companies in Nairobi, Kenya. The hire purchase companies are selected purposively. The study sought to document the Working Capital Management techniques used in financial decisions, the reason for their use and factors inhibiting effective use of these techniques. It also examined the liquidity and the Cash Conversion Cycle of the HP companies. The methodology involved descriptive research methods. Primary data was collected by a questionnaire containing open and closed questions and analysed using descriptive statistics. Secondary data was also collected by use of a financial data schedule. This schedule collected the financial data needed to compute financial ratios relevant to working capital management. Computation and ratio analysis was performed by use of Microsoft Excel and financial ratios formulae. Both primary and secondary data were processed by SPSS statistics 17.0. The main observations of this study are beneficial to the corporate decision makers, investors, financial institutions, govenunent and other stakeholders in Kenya as well as other countries of the world