Dominic NgabaNyabira, Nyamisa Marione2023-08-152023-08-152023http://ir-library.ku.ac.ke/handle/123456789/26848Research Project Report Submitted to the School of Business, Economics and Tourism in Partial Fulfilment of the Requirement for the Award of the Degree of Master of Business Administration (Finance) of Kenyatta University, April 2023.The expansion of the Kenyan economy is significantly aided by supermarkets. By opening new retail locations and enlarging existing ones, more business opportunities must be generated as the economy expands. The retail sector has recently faced a number of difficulties. Giant retail companies have ultimately had to close branches and even leave the countries they had invested in. Therefore, this study sought to investigate the effects of working capital management and financial performance of supermarkets in Nyeri County, Kenya. The specific objectives of the study were to assess the effect of cash conversion period, average collection period and inventory turnover period on financial performance of supermarkets in Nyeri County, Kenya. The Keynesian Liquidity Preference Theory, the Financing Advantage Theory, the Operating Cycle Theory, and the Net Trade Cycle were used as underpinning theories. For the study, a descriptive research design was used. A census of retail supermarket chains in Nyeri County, Kenya that are located within Nyeri town was used The data collected was analyzed using the Karl Pearson correlation and multiple linear regression. The Karl Pearson correlation was used to measure the degree of association between the different variables under consideration while regression was used to estimate the causal relationship. To test the statistical significance the F test and the t test were used. The results were presented in tables. The study found that cash conversion period had a positive and significant effect on financial performance of supermarkets in Nyeri County, Kenya as indicated by (t= 2.781, p<0.05). The average collection period had a positive and significant effect on financial performance of supermarkets in Nyeri County, Kenya as indicated by (t= 2.980, p<0.05) and the inventory turnover period had a positive and significant effect on financial performance of supermarkets in Nyeri County, Kenya as indicated by (t= 1.532, p<0.05). The study came to the conclusion that the cash conversion aids the company's overall cash flow. The average collection period allows the company to maintain a level of liquidity, allowing it to pay for immediate expenses and get a sense of when it might be able to make larger purchases. A quick inventory turnover leads to increased sales volume and, as a result, increased store profitability. A quick inventory turnover indicates that the store responds quickly to its customers. The study recommended that the supermarkets should improve their cash flow management by tracking the timing and amounts of cash inflows and outflows. The supermarkets can reduce their cash conversion cycles by turning over inventory faster. The supermarkets should design and document clear credit policies and encourage adherence to the same to reduce instances of delays in collection. A frequent revisit and modification of the policies will help adjust to the new environment. Supermarkets should improve their forecasting by obtaining accurate predictive numbers that can help them determine what products to stock their shelves with.enWorking Capital ManagementFinancial Performance of SupermarketsNyeri CountyKenyaThesis