Financial Management Practices and Financial Performance of Tea Processing Factories in Mount Kenya Region, Kenya
| dc.contributor.author | Njore, Wainana Joseph | |
| dc.date.accessioned | 2025-03-10T09:22:36Z | |
| dc.date.available | 2025-03-10T09:22:36Z | |
| dc.date.issued | 2024-11 | |
| dc.description | A Project Submitted to School of Business, Economics, and Tourism for the Partial Fulfillment for the Award of Degree of Master of Business Administration (Finance Option) Kenyatta University, November 2024. Supervisor Fredrick W S Ndede | |
| dc.description.abstract | Tea processing factories in the Mount Kenya region play a pivotal role in Kenya's economy by contributing significantly to gross domestic product, employment, and foreign exchange earnings. However, despite their importance, these factories face financial performance challenges arising from fluctuating international tea prices, high production costs, and climate change impacts. From 2018 to 2020, notable disparities in financial performance were observed across counties in the region, highlighting the need for improved financial management practices. This study aimed to investigate the effect of financial management practices on the financial performance of tea processing factories in the Mount Kenya region. Specifically, the study examined the impact of cash management practices, capital structure decisions, and inventory management practices on financial outcomes. Grounded in Agency Theory, Pecking Order Theory, Cash Conversion Cycle Theory, and Lean Inventory Management Theory, the study adopted a descriptive research design. The target population comprised 35 tea processing factories in the Mount Kenya region, with managers and accountants serving as key respondents (n=70). Data collection utilized structured questionnaires with a five-point Likert scale, and quantitative analysis techniques were employed. The findings revealed moderate to high adherence to financial management practices, with significant positive effects on financial performance. Effective cash management, including budgeting and monitoring, showed strong correlations with improved financial outcomes. Similarly, strategic inventory management practices, such as Just-In-Time models and supplier relationships, were critical for enhancing performance. Capital structure decisions, particularly reliance on retained earnings and balanced debt-equity ratios, contributed to financial stability, albeit with variability among factories. The study concluded that financial management practices significantly influence the financial performance of tea processing factories in the Mount Kenya region. It recommends maintaining balanced capital structures, implementing effective inventory management systems, and optimizing cash management practices. Regular monitoring of financial indicators and fostering financial literacy among employees are essential for sustained growth and competitiveness in the tea sector. | |
| dc.description.sponsorship | Kenyatta University | |
| dc.identifier.uri | https://ir-library.ku.ac.ke/handle/123456789/29746 | |
| dc.language.iso | en | |
| dc.publisher | Kenyatta University | |
| dc.title | Financial Management Practices and Financial Performance of Tea Processing Factories in Mount Kenya Region, Kenya | |
| dc.type | Thesis |