Important Dates

Conference Dates

July 20th, 2017

Deadline for Abstract Submission

2nd July 2017

Deadline for Full Paper Submission

10th July 2017

Notification of Paper Acceptance
10 days after receipt of full paper

Venue:

University of Nairobi

 

AN ASSESSMENT OF THE EFFECT OF WORKING CAPITAL MANAGEMENT PRACTICES ON FINANCIAL PERFORMANCE: A STUDY OF SMALL SCALE ENTERPRIS ES IN KISII SOUTH DISTRICT, KISII COUNTY, KENYA

Type: 
Abstract
Year: 
2011
Authors: 
Robert Nyamao Nyabwanga

Abstract
The purpose of this study was to assess the effect of working capi tal management practices on the
financial performance of Small Scale Enterprises (SSEs) in Kisii South District. The study
adopted Across- sectional survey research design which allowed the collection of primary
quantitat ive data through structured quest ionnaires. The target population was 159 managers of
101 trading and 58 manufacturing SSEs. Stratif ied random sampling technique was used to
obtain a sample of 113 SSEs comprising 72 trading and 41 manufacturing enterprises. The data
were analyzed using both descript ive and inferential statist ics. Consequently, the f indings of the
study were that Working capital management practices are low amongst SSEs as a majority has
not adopted formal working capi tal management routines and their financial performance is on
average low. The study also revealed that SSE financial performance is positively related to
efficiency of cash management (ECM), ef ficiency of receivables management (ERM) and
efficiency of inventory management (EIM) at 0.01 significance level. The coefficient of
determination (R2) indicates that 63.4% of the variations in f inancial performance (FP) could be
explained by changes in ECM, ERM and EIM. The study concluded that working capital
management practices have an influence on the f inancial performance of SSEs hence the need for
SSE managers to embrace eff icient working capital management practices as a strategy to
improve their f inancial performance and survive in the uncertain business environment. The
study corroborates other research findings that established a posit ive relationship between
working capital management pract ices and f inancial performance.
Key words: Working Capital Management, Financial Performance, Small Scale Enterprises

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aibuma2011_submission_23.pdf32.19 KB

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