Effects of Working Capital Management on Performance of Non-Financial Companies Listed In NSE, Kenya
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Date
2014
Authors
Muathe, Stephen M. A.
Mwangi, L. W.
Kosimbei, G. K.
Journal Title
Journal ISSN
Volume Title
Publisher
Academic Journals
Abstract
The purpose of this study was to investigate the effect of working capital management on the performance of non-financial companies listed in the Nairobi Securities Exchange (NSE), Kenya. The study employed an explanatory non-experimental research design. A census of 42 non-financial companies listed in the Nairobi Securities Exchange, Kenya was taken. The study used secondary panel data contained in the annual reports and financial statements of listed non-financial companies. The data were extracted from the Nairobi Securities Exchange hand books for the period 2006-2012.The study applied panel data models (random effects). Feasible Generalised Least Square (FGLS) regression results revealed that an aggressive financing policy had a significant positive effect on return on assets and return on equity while a conservative investing policy was found to affect performance positively. The study recommended that managers of listed non-financial companies should adopt an aggressive financing policy and a conservative investing policy should be employed to enhance the performance of non-financial companies listed in the NSE, Kenya.
Description
Keywords
working capital management, performance, non-financial companies
Citation
European Journal of Business and Management Vol.6, No.11, 2014