Working Capital Management Practices on Performance of Cash Flows among Small and Medium Enterprise in Nyeri Town, Kenya
Kabatha, Samuel Nderitu
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Theperformance of cash flow has been investigated from other dimensions and scarcely ontheworking capital management especially among the SMES. The purpose ofthis study wasto investigate working capital management practices on the performance of SMEs in Nyeritown. Thespecific objectives of the study were to assess aspects of working' capital management on the performance of cash flow; cash management practices, credit managementpractices, debtor management practices and inventory management practices. The study sourht to answer the research questions on if the above practices affect the performance of cash flow in the small and medium enterprises operating in Nyeri town The studyused a survey design to describe the cash flow situation in the SMEs and evaluate therole of working capital management practices in the management and performance of thephenomenon of cash flow. The study used both primary and secondary data which was collected using questionnaires and secondary data collection sheets respectively. The population of the study wasfive hundred and twenty one main SMEs operating in Nyeri townacross various industries. The target respondent was the staff working in these SMEs. There is a total population of 780 employees working among SMEs in Nyeri town, The sample size was arrived at using a formula developed by Fisher (1994) which derives sampleswith statistical representation to the populations given that the population size is known.Stratified sampling and simple random sampling was used in arriving at the sample size.The study had a sample size of221 respondents. Data was analyzed descriptively with theaid of SPSS software (version 21). This helped to yield mean, standard deviation, tables and charts which were used in the analysis of the data and presentation. Data analysis involvedpreparation of the collected data, coding, editing and cleaning of data in readiness for processing using SPSS and Microsoft office excel. In the analysis, Multivariate Discriminant Analysis (MDA) statistical technique as used by Altman (2006) was adopted. The studyhas yielded findings and recommendations that wil improve the application of working capital management practices in the management of cash flow and its attendant performance.