Browsing by Author "Mwangi, Lucy Wamugo"

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    Corporate Social Responsibility Expenditure on Environment and Financial Performance of Tea Development Agency Managed Factories in Kenya
    (The Strategic Journal of Business and Change Management, 2024) Bosire, Ogero Vincent; Mwangi, Lucy Wamugo; Kosgei, Margaret
    Kenya Tea Development Authority registered factories continue to face the challenge of financial performance in regard to declining return on equity across the period 2017-2021. To ameliorate this challenge, Kenya Tea Development Authority firms are undertaking corporate social responsibility activities in order to gain social license in the areas they operate. However, there has been limited empirical evidence linking corporate social responsibility of environment and financial performance particularly on these Kenya Tea Development Authority firms. Thus, against this background, this study determined the effect of Corporate Social Responsibility on environment on financial performance of Kenya Tea Development Authority managed factories in Kenya. The study was anchored on resource-based view theory, stakeholder theory, institutional theory and social contract theory. The study was based on positivism research philosophy guided by explanatory research design. The target population consisted of all the 67 Kenya Tea Development Authority managed factories clustered into 7 Seven regions as at December 2022. The study applied census technique where data was sought from the entire population. Information in its primary form was gathered through structured questionnaire on corporate social responsibility while secondary data from 2017-2021 was obtained on financial performance and firm size. The Statistical Package for Social Sciences was used to compute descriptive statistics that entailed means and standard deviation. Besides, inferential statistics covering regression analysis were used to test the formulated hypotheses. Presentation of the data was done through tables and figures. The study established that Corporate Social Responsibility expenditure on environment (β=0.505, p p<0.05) was a significant predictor of financial performance of Kenya Tea Development Authority managed factories in Kenya. At the same time, firm size was found to have significant moderating effect on the relationship between Corporate Social Responsibility and financial performance of Kenya Tea Development Authority managed factories. The study concluded that there exists significant relationship between Corporate Social Responsibility on environment and financial performance which is moderated by firm size. The study recommended that senior managers working among Kenya Tea Development Authority managed factories in Kenya continue to invest in environmental Corporate Social Responsibility initiatives.
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    Credit Management Practices and Loan Performance: Empirical Evidence from Commercial Banks in Kenya.
    (International Journal of Current Aspects in Finance, Banking and Accounting, 2020) Muthoni, Mburu Irene; Mwangi, Lucy Wamugo; Muathe, Stephen M.A
    Commercial banks in Kenya as per the World Bank report were recording higher nonperformance in loans over the study period than the standard globally in spite of Kenya having the most stable and developed banking system in East and Central Africa region. Commercial banks non-performing loans for five years from 2015 to 2018 averaged eleven percent which was higher than the recommended rate of one percent. In Kenya, commercial banks’ non-performing loans remain higher than the recommended rate which could be due to inadequate credit management practices. The study therefore aimed at examining the effect of credit management practices on loan performance of commercial banks in Kenya. Specifically, the study sought to establish the effect of debt collection policy, client appraisal and lending policy on the loan performance of commercial banks in Kenya. The underpinning theory of the study was the 5Cs model for credit. The study used explanatory research design and the research philosophy adopted was positivism. The target population was 44 commercial banks in Kenya and a census approach was used. Both primary and secondary data were used. Primary data was collected through structured questionnaires and related to credit management practices while secondary data was obtained from review of existing bank loan records in relation to loan amount advanced and non-performing loans for a period of four years from 2015-2018. The data collected was analyzed using both descriptive and inferential statistics with the help of SPSS version 22. The study found out that debt collection policy and lending policy had a positive significant effect on loan performance of commercial banks in Kenya. However, client appraisal had no significant effect on loan performance of commercial banks in Kenya. Therefore, the study concluded that commercial banks’ loan performance could be largely attributed to the efficiency of the credit management practices put in place at the institutions. The study recommended that commercial banks to regularly evaluate and update practices relating to debt collection policy, client appraisal and lending policy that are capable of ensuring that credit risks are identified and recorded from departmental level to the institution at large. This is vital in light of technological innovations in the banking sector like mobile lending that may limit commercial banks’ ability to evaluate and manage credit using traditional methods.
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    Debt Financing and Profitability of Listed Manufacturing Firms at the Nairobi Securities Exchange, Kenya: An Empirical Analysis
    (AESS Publications, 2025-05) Amugada, Ballerine Shunza; Mwangi, Lucy Wamugo
    Declining profitability in NSE-listed manufacturing firms like Mumias Sugar and Eveready East Africa has discouraged investment and hampered Kenya's economic growth. Despite extensive research on capital structure, a gap remains in understanding how debt financing specifically influences profitability, particularly return on assets (ROA), among NSE-listed manufacturing firms. This study examined the impact of debt financing on ROA, focusing on long-term debt, short-term debt, and the debt tax shield. The research was anchored on trade-off theory, agency theory, and Modigliani and Miller’s capital structure irrelevance theory. An explanatory research approach was employed, analyzing financial data from nine listed manufacturing firms from 2010 to 2022. A census sampling technique included all nine firms, and data was analyzed using Stata version 17 with panel regression analysis. Diagnostic tests conducted included multicollinearity, Hausman, heteroskedasticity, and normality tests. Findings revealed that both short-term and long-term debt had a statistically significant negative impact on ROA, indicating that higher debt levels reduced profitability. Conversely, the debt tax shield had an inverse but statistically insignificant effect, suggesting that tax benefits from debt financing did not significantly enhance profitability. The study recommends that financial managers explore alternative financing strategies such as equity financing or internal capital generation rather than broadly reducing debt. Additionally, firms should strategically balance their short-term and long-term debt to optimize financial performance while mitigating financial risks.
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    Effect of Financing Decisions on Performance of Nonfinancial Companies Listed in the Nairobi Securities Exchange, Kenya
    (Kenyatta University, 2014-06) Mwangi, Lucy Wamugo
    Corporate failure among companies in Kenya has often been associated with the financing behaviour of the firms. Momentous efforts to revive the ailing and liquidating companies have focused on financial restructuring. Corporate managers, therefore, have the critical responsibility of understanding how alternative financing decisions influence performance so that they can work towards securing successful performance while also mitigating against corporate failure. Suboptimal financing decisions can lead to corporate failure. A great dilemma for management and investors alike is whether there exists an optimal financing policy and how various financing decisions influence business performance. This study therefore investigated the effect of financing decisions on the performance of non-financial companies listed in the Nairobi Securities Exchange (NSE), Kenya, in a bid to offer a solution to this dilemma. The study further sought to establish the interaction effects of the various components of financing decisions on the performance of non-financial companies listed in the NSE. In order to provide a holistic solution, the thesis additionally evaluated the mediating role of internal cash flow available on the relationship between financing decisions and performance. The study employed an explanatory non- experimental research design. A census of 42 non-financial companies listed in the Nairobi Securities Exchange, Kenya was taken. The study used secondary panel data contained in the annual reports and financial statements of listed non-financial companies. The data were extracted from the Nairobi Securities Exchange hand books for the period 2006-2012.The study applied panel data models (random effects) based on the outcome of Hausman specification tests to determine the effect of financing decisions on performance of non-financial companies listed on the NSE, Kenya. The mediating effect of internal cash flow available was tested using the step-wise regression technique by employing the logic of Baron and Kenny (1986). Feasible Generalised Least Square (FGLS) regression results revealed that financial leverage had a statistically insignificant negative association with return on assets (ROA), but a significant negative relationship with return on equity (ROE).Increased aggressiveness in financing policy had a positive effect on both measures of performance while increased aggressive investing policy was found to affect performance positively. Dividend policy had a statistically 'significant positive effect on ROA but an insignificant negative effect on ROE. The study also found that the interaction between the financing decision components had a significant effect on performance. Furthermore, the results of Sobel-Goodman mediation test indicated that internal cash flow available had no mediating effect on the relationship between financing decisions and performance of non-financial companies listed in the NSE. The study recommends that managers of listed non-financial companies should reduce the reliance on long term debt as a source of finance. Further it is recommended that an aggressive financing policy and a conservative investing policy should be employed to enhance the performance of non-financial companies listed in the NSE, Kenya. The government should employ fiscal and monetary policies through the central bank to reduce the cost of borrowing from financial institutions. Most importantly managers should make financing decisions in relation to each other and not in isolation.
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    Financial Risk and Financial Performance: Evidence and Insights from Commercial and Services Listed Companies in Nairobi Securities Exchange, Kenya
    (MPDI, 2020) Onsongo, Susan Kerubo; Muathe, Stephen M. A.; Mwangi, Lucy Wamugo
    In Kenya, the last few years has seen the performance of companies listed under the commercial and services segment on the Nairobi Securities Exchange (NSE), experience mixed fortunes. The study sought to assess the implications of financial risk on the performance of these companies. The study applied explanatory research design. The target population were the 14 companies listed under this segment of NSE. Secondary panel data contained in published annual reports for the period 2013–2017 was collected. Panel regression model was applied with the random e ect model being used based on the Hausman specification test. Findings showed that credit risk had an insignificant positive e ect on return on equity (ROE) while liquidity risk had a significantly negative e ect on ROE and operational risk had a positive insignificant e ect on ROE. The positive coe cients from the data analysis indicated that commercial and service companies at NSE were able to take in more credit to boost performance of these companies however the negative coe cients shows that within the period of study these companies experienced high liquidity problems in that the current liabilities exceeded the current assets. Thus, concluding that these companies were unable to pay all their obligation when they were due.
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    Firm Size, Operational Risk and Financial Performance: Evidence from Commercial and Services companies listed in Nairobi Securities Exchange
    (IJCAB Publishing Group, 2019) Onsongo, Susan Kerubo; Mwangi, Lucy Wamugo; Muathe, Stephen Makau
    The study sought to assess the financial performance of the companies listed in the commercial and services sector at the Nairobi Securities Exchange (NSE), Kenya with an aim of determining the implications of firm size and operational risk on their performance. It was anchored on the agency theory. The study applied explanatory research design and the target population was the 14 companies listed under this sector. Secondary panel data contained in published annual reports for the year 2013 to 2017 was collected. A panel regression model was applied with the random effect model being used based on the Hausman specification test. Findings showed that operational risk had a positive insignificant effect on performance as proxied by return on assets (ROA). The findings further showed that firm size had a moderating effect on the relationship between operational risks and performance. It concluded that firm size played a role in the risk management of a company i.e. companies with higher total assets managed risk better than their counterpart. The study recommends that for companies to record improved financial performance, they needed to manage their operational risks by implementing risk management initiatives and increasing their total assets base.
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    What is Accounting.mp4?
    (Kenyatta University, 2025-03) Mwangi, Lucy Wamugo