Capital Structure and Financial Performance of Non-Financial Companies Listed at the Nairobi Securities Exchange, Kenya
| dc.contributor.author | Kosgei, Mercy Chepleting | |
| dc.date.accessioned | 2025-06-17T09:01:39Z | |
| dc.date.available | 2025-06-17T09:01:39Z | |
| dc.date.issued | 2024-03 | |
| dc.description | A Research Project Submitted to the School of Business, Economics and Tourism in Partial Fulfilment of the Requirements for the Award of the Degree of Master of Business Administration (Finance Option) Kenyatta University, March 2024. Supervisor Dominic Ngaba | |
| dc.description.abstract | Most firms, face a major challenge on identifying the utmost and suitable capital structure which can optimally and directly propel financial performance, whether for firms domiciled in the emerging or developed economies. Past literature has not yet provided a universally agreed upon capital mix which straight away explains the variances in most firm profitability levels. The study aimed at investigating the influence of capital structure and non-financial companies’ financial performance which were listed at the Nairobi securities exchange. The specific objectives were namely; to establish the influence of debt on the financial performance of non-financial companies listed at the Nairobi securities exchange, Kenya; to evaluate the influence of retained earnings on the financial performance of non-financial companies listed at the Nairobi securities exchange and to establish the influence of paid-up share capital on the financial performance of non-financial companies listed at the Nairobi securities exchange. Modigliani and Miller theory, Agency Theory, Trade-off theory of capital mix and Pecking order theory are the supposition underpinning this inquiry. To establish the research problem, the study utilized causal research design. The study considered 41 non-financial companies which were members of Nairobi securities exchange, Kenya as sample size out of a population of 46 such firms. Balanced data was incorporated for analysis purposes. Audited end of year statements was utilized to access the data needed. The data covered the period between 2018 up to 2022. The study considered both descriptive and inferential data analysis methodology which entails correlation and multivariate models to establish the final results. The research outcome was outlined in form of tables, graphs as well as figures. The study incorporated ethical consideration by including both permission letter from Kenyatta, University graduate school and NACOSTI to ensure all parties rights were adhered to. Research findings portrayed that debt as a source of financing had a negative and statistically significant influence on earnings per share of non-financial companies listed at the Nairobi securities exchange, Kenya. Retained earnings portrayed direct and statistically significant influence on earnings per share of non-financial companies listed at the Nairobi securities exchange, Kenya and finally, paid up share capital demonstrated a positive and statistically significant influence on earnings per share of non-financial companies listed at the Nairobi securities exchange, Kenya. To the top management of non-financial companies, the theoretical viewpoint of debt, retained earnings and paid-up share capital on financial performance is a reliable base for the indirect connection of long-term debt will guide them to establish policies which will ensure that funding of firm projects should not exceed the optimal debt capital structure. CMA management will be in a position to develop policy guidelines to encourage the new and existing firms to fund project projects by focusing on the cheap sources which arise due to advantages such as benefits of tax deduction allowances The academicians are beneficiaries of the study outcome for the methodological gap on how to measure the debt, retained earnings, paid up share capital and earning per share using diluted EPS of non-financial organizations has been placed in a new debatable frontier. | |
| dc.identifier.uri | https://ir-library.ku.ac.ke/handle/123456789/30213 | |
| dc.language.iso | en | |
| dc.publisher | Kenyatta University | |
| dc.title | Capital Structure and Financial Performance of Non-Financial Companies Listed at the Nairobi Securities Exchange, Kenya | |
| dc.type | Thesis |