Working Capital Management Practices on Performance of Cash Flows among Small and Medium Enterprise in Nyeri Town, Kenya
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Date
2016
Authors
Kabatha, Samuel Nderitu
Journal Title
Journal ISSN
Volume Title
Publisher
Kenyatta University
Abstract
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.
Description
A Research Project Submitted to the School of Business in Partial Fulfillment of the Requirements for the Award of Masters of Business Administration Degree (Finance Option) of Kenyatta University, December, 2016