Browsing by Author "Florence, Teresa Wanjeri"

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    Assessment of the Relationship Between Retained Earnings and Shareholder Value Creation: Perspectives from Listed Manufacturing Firms in Kenya
    (African Journal of Emerging Issues (AJOEI), 2026-04) Florence, Teresa Wanjeri; Omagwa, Job; Musau, Salome
    Purpose of Study: This study sought to analyze the effect of retained earnings on shareholder value in listed manufacturing firms in Kenya. Problem Statement: Generating shareholder value remains a fundamental objective within the global corporate sphere, closely linked to corporate profitability. The manufacturing sector in Kenya contributes approximately 18% to the country’s GDP and creates employment to over 2.3 million individuals across both formal and informal sectors. However, these firms consistently struggles to create and maintain shareholder value over the past decade. Despite a reported increase in shareholder wealth on the NSE in 2019, much of this growth was concentrated within a few companies, with East Africa Breweries PLC being the only manufacturing firm among them. Methodology: The study adopted a positivist philosophy and a causal research design. The target population included 21 listed manufacturing firms on the Nairobi Securities Exchange (NSE). Secondary panel data for the period 2012–2023 was extracted from published financial statements and analyzed using Stata software, employing both descriptive and inferential statistical techniques. Descriptive statistics, Pearson’s correlation, panel regression, multiple regression analysis were employed to analyze the data. Result: Retained earnings had positive and significant on shareholder value creation (β = 0.229617, p = 0.018 < 0.05), showing that reinvesting internal funds supports shareholder value. Recommendation: Retained earnings should remain the primary source of funding for listed manufacturing firms, given their strong positive relationship with shareholder value. In addition, firms should adopt dividend policies that balance investor expectations with the need for reinvestment in core operations.
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    Short-Term Debt Financing and Shareholder Value: Evidence from Listed Manufacturing Firms in Kenya
    (StratfordPeer Reviewed Journals and Book Publishing, 2026-04) Florence, Teresa Wanjeri; Omagwa, Job; Musau, Salome
    Listed manufacturing firms in Kenya play a critical role in driving economic growth, contributing approximately 18% to the country's Gross Domestic Product (GDP) and creating over 2.3 million jobs in both formal and informal sectors. However, these firms have faced challenges in consistently generating shareholder value over the past decade, raising concerns about their ability to sustain value creation. While shareholder value has increased among listed firms in general, the performance of listed manufacturing firms remains notably weak. Previous studies investigating shareholder value have produced inconsistent findings, leaving uncertainty about how financial structure influences shareholder value in these firms. This study addresses this gap by examining how short-term debt financing affect shareholder value among listed manufacturing firms in Kenya. Anchored on the Modigliani and Miller Theory and the Trade-off Theory, the research adopts a positivist philosophy and a causal research design. The target population included 21 listed manufacturing firms on the Nairobi Securities Exchange (NSE). Secondary panel data for the period 2012–2023 was extracted from published financial statements and analyzed using Stata software, employing both descriptive and inferential statistical techniques.The study found that short term debt had a positive and significant effect on shareholder value (β = 0.284519, p = 0.015 < 0.05), suggesting that efficient use of short term borrowing to support liquidity and operations enhances value.In view of the findings, the study recommends that managers and regulators should focus less on altering ownership structures and more on limiting costly long term borrowing, supportingworking capital discipline, and deliberately growing and redeploying retained earnings to drive shareholder value. In addition, policymakers, especially the National Treasury,Capital Markets Authority, and Nairobi Securities Exchange, should consider formulating financial policies that encourage manufacturing firms toadopt balanced financingapproaches.