Accounts Receivable Management and Financial Performance of Kericho Water and Sanitation Company Limited, Kericho, Kenya.
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Date
2019
Authors
Siele, Kipkirui Charles
Tibbs, Charles Yugi
Journal Title
Journal ISSN
Volume Title
Publisher
International Academic Journals
Abstract
Account receivables have been a major
problem for most utility service providers
especially those still dealing with the post
payment method where services are
rendered before payment is made. This
study sought to find out if financial
performance of Kericho Water &
Sanitation Company (KEWASCO) was
attributed to management of accounts
receivable. The study collected secondary
data spanning from 2010 to 2014 from
Kenya national audit office and
KEWASCO published financial statements
to find out average collection period and
accounts receivable turnover. The target
population included employees of
KEWASCO in two regions, Kericho and
Bureti working in finance. Data was
collected using questionnaires where a
census was employed and data analyzed
using regression and correlation analysis to
find if there is any relationship between
financial performance and accounts
receivable at 5% significance level. From
the findings inventory turnover period and
average payment period is averagely 30.14
days and 105.45 days respectively,
accounts receivable turnover had a mean
of 24.54, average collection period (29.8)
size of the region (1.547). The results
showed that KEWASCO, financial
performance variable Return on Equity
(ROE) was significantly affected on Size
of the region with positive correlation of
0.688 and Inventory Turnover with
negative correlation of 0.245. According to
the regression equation established, taking
all factors into account; size of the region,
Average Payment Period (in Days),
Accounts receivable turnover, and
Average collection period) financial
performance of KEWASCO, measured by
ROE was 0.752 (75.2%).This study
recommended that the organization should
increase average collection period,
inventory period, accounts receivable
turnover and debt levels in order to
improve their financial performance.
Description
A research article published in International Academic Journal of Economics and Finance
Keywords
accounts receivable management, financial performance, Kericho Water and Sanitation Company Limited, Kericho, Kenya
Citation
Accounts receivable management and financial performance of Kericho Water and Sanitation Company Limited, Kericho, Kenya. International Academic Journal of Economics and Finance, 3(3), 1-17