Fredrick WaruiKeitany, Rebecca Jeruto2022-04-072022-04-072021http://ir-library.ku.ac.ke/handle/123456789/23521A Research Project Submitted in Partial Fulfillment of the Requirements for the Award of the Degree of Master of Business Administration (Finance Option) of Kenyatta University, November, 2021Merger has been undergoing in organizations in Kenya with the main focus on financial performance improvement. However, most of these organizations have never realized their financial targets. The 2019 Central Bank of Kenya report shows that 25% of the non financial institutions reported losses in the 2018/2019 financial year. This was an increase over the preceding five years where not more than 20% of the non financial institutions had reported losses Therefore, this study sought to establish how non-financial institutions financial performance in listed at the Nairobi Securities Exchange in Kenya is affected by mergers. The specific focus of the study was to examine the effect of liquidity, market prospect and leverage on financial performance. The study was anchored by financial synergy theory, information and signalling theory and synergy gain theory. An exploratory research was used. Three nonfinancial institutions namely: Car and General (C&G) and Cummins, Unga group Holdings and Kenolkobil were targeted. The study used secondary data collection sheet which involved the documentary reviews of data available in the released financial statements, and annual reports for the last 10 years, that is, 2011 to 2020. Analysis of quantitative data was through the use of descriptive statistics that included mean and standard deviation. In addition, determination of how variables relate to each other was done using inferential statistics specifically using analysis of multiple regressions. The study established that liquidity, leverage and market prospect had a positive significant effect on financial performance. The study concludes that due to insufficient market depth or market interruptions, non-financial institutions were unable to efficiently liquidate or offset a particular position at or near the last traded market price, leading them to participate in bank lending to satisfy their daily transactions. A smaller number of the nonfinancial institutions are at risk of losses due to changes in book value per share, price-earningratio and earnings per share and maybe other indicators whose values are set in the market. Leverage is likely caused by the total company debt and shareholder equity. Leverage enables organizations to magnify their shareholders’ profits because if an organization is solely financed by shareholder equity, then its profitability to the shareholders will change in proportion to its own change in profitability. The study recommends that the non-financial institutions listed at NSE should aim at maximizing their overhead expenses that consume much of their cash flow. The non-financial institutions listed at NSE should aim at gaining forecasted ability to compete in a marketplace by comparing publicly traded companies’ stock prices with other financial measures such as earnings and dividend rates. The non-financial institutions listed at NSE should increase financial leverage by borrowing capital through issuing fixed-income securities or by borrowing money directly from a lender.enMergersFinancial PerformanceNon-Financial InstitutionsListedNairobi Securities ExchangeKenyaThesis