Business, Economics and Management
Omenyo Douglas Mose, Kenya
Abstract: The purpose of study was to assess the effect of firm size on financial performance of manufacturing firms listed in Nairobi Securities Exchange. Manufacturing firms are expected to increase profits from its capital base, but there has been decreasing trend over the years. The decline in financial performance over the period under study can be attributed to the weak capital structure characteristic of the manufacturing firms. Firms’ characteristic is all about its capital structure which is the life-blood and nerve center of a business. This study was guided by the following specific objective; to establish the effect of the firm size on financial performance of manufacturing firms listed in NSE, the study was carried out using a correlation design. The target population comprised of manufacturing sector. The secondary data was obtained from annual financial statements of all manufacturing firms prequalified in Kenya, and operated between the years 2012 to 2018. Data was analyzed by use of panel descriptive statistics. The study concluded that Firm size was characterized in Carbacid investments. Firm size as per each manufacturing firms which depicts that Carbacid investments had highest firm size. The firm’s size was characterized by financial position being highest mean. The firm’s size was not highly characterized by number of employees. This recommended that most manufacturing firms to use number of employees to measure firm size. Thus, there is need to carry out the same study to other sectors especially long period than five years.
Effect of Behavioural Biases On Market Performance of Shares of Firms Listed at The Nairobi Securities Exchange
Hezekiah Adwar Ouma & Dr. Oluoch Oluoch, Jomo, Kenya
Abstract: The study sought to evaluate the effect of behavioral biases on market performance of shares of firms listed at the NSE which is also the overriding objective of the study. The study was guided by three objectives; to determine the effect of herd behavior, to establish the effect of mental accounting on market performance of shares of firms listed at the NSE. It is in line with four review theories which are efficient market hypothesis (EMH) and prospect theory. Longitudinal research design was used to enhance data collection from the same target population at different points in time in order to study changes over time for a period of time and to allow for the analysis of the relationship between the independent and the dependent variables over a period of time. Dependent variable was measured by use of share returns based on share price. Independent variables are herd behavior, overconfidence and mental accounting and were respectively measured by use of returns dispersion, trade volume and price-dividend ratio. The study targeted sixty-six firms listed in the NSE. Census survey was used to draw samples from target population. Document analysis and checklist were used for collecting secondary data from print and electronic media. Data collected were analyzed using quantitative and qualitative means. Quantitative data was analyzed using descriptive statistics such as measures of central tendencies. The study covered a period of one year (twelve months) from September 2018 through September 2019. The study found that behavioural biases are significant predictors in modeling market performance in bivariate analysis. Furthermore, mental accounting was negatively correlated with market performance.
Influence of Credit Risk Management Practices On Financial Performance: A Case of Small and Medium Enterprises in Kisii Town Kenya
Janet Nyabonyi Omweno & Prof. Willy Muturi, Kenya
Abstract: Credit given to customers can enhance the business to influence high demand of the products. Enterprises can benefit from giving credit when profit generated is increased from sales. Credit risk is the danger which arises when customer request to make payment as per agreed period but in the process may fail to pay. Credit risk management is that process used to ensure customer pays for a product delivered. In small and medium Enterprise credit risk management is that ability to manage customer’s credit line to minimize loss, bad debts, bankruptcy over reserving in payment pattern. The objective of the study was to examine the effects of credit risks management practice on financial performance. Specific objectives include; to investigate the effects of product diversifications on financial performance of small and enterprise in Kisii town, and to determine the effect of market risk on financial performance of small and medium enterprises in Kisii town. The conceptual framework was conceptualized by independent variable and dependent variable. The study used cross-sectional design. The cross-section design is the method of collecting information from different samples from large population. Selfadministering research questionnaire was ensured by the researcher. The target population consisted of 857 respondents. Stratified sampling was used. The sample of 86 respondents was used by applying 10% of the target population. Stratified sampling technique was used to categorize SMEs in Kisii town under study to give chance for every enterprise to participate. Managers, account clerk and owners provided information required by filling the questionnaire for primary data. The study analyzed the collected data by descriptive statistics such as percentage, mean and standard deviation. Inferential statistics such as correlation and regression analysis examine the association between variables. The study findings were presented by tables then discussions and conclusion was drawn. From the results, it was indicated that usage of product diversification led to appropriate management, product diversification considers quality of client looking for credit facilities while borrowed amount was convenient to the business and flexible products usage improves credit management. It is recommended that product diversification should be considered with quality of client is looking for credit facilities through variety of products.
Effect of Benchmarking Practices on Financial Performance of Private Hospitals in Kenya. A Case of Private Hospitals in Kisii County, Kenya
Ann Chebet, Prof. Willy Mwangi Muturi, Kenya
Abstract: Benchmarking is the process of continuously comparing and measuring an organization with business leaders anywhere in the world to gain information, which will help the organization take action to improve its performance. Hospitals play a vital role in Kenya’s health sector by providing medical services. The main objective of the study was to establish the effect of benchmarking practices on financial performance of private hospitals in Kenya. The specific objectives of the study were to determine the effect of functional benchmarking on the financial performance of private hospitals in Kenya, to establish the effect of process benchmarking on the financial performance of private hospitals in Kenya and to determine the effect of operational benchmarking on the financial performance of private hospitals in Kenya. The study concentrated only on the private hospitals that are in operation in Kisii County and are duly recognized by the Ministry of Health. The study used descriptive research design so as to gather the necessary data for analysis. The study undertook census survey of all the 173 proprietors and medical practitioners. Primary data were collected using a personally administered semistructured questionnaire. The results will be presented in charts, tables and graphs. The study found out that all the three forms of benchmarking under study (Functional, Process and Operational) have a significant influence on the financial performance of private hospitals
Influence of Internal Control Practices On the Financial Performance of Tea Processing Firms in Kenya: A Case of Tea Factories in Nyamira County
Risper Nyambeki Mauti & Professor. Willy Muturi, Kenya
Abstract: The study sought to assess the influence of internal controls on financial performance of Kenya tea factories. In the particular the researcher focused on these specific objectives: to determine the influence of segregation of duties on financial performance of Kenya and to evaluate the influence of internal checks on financial performance of Kenya tea factories. The study was conducted in tea factories in Nyamira County, because it is expanding with goods. This study, the researcher used a descriptive research design, because it is based on the fact given from the field as described in the study. The target population was comprised of 130 respondents in tea factories that involved employees from accounting-related sections, and audit sections of the tea factories. The sample size for this study was 98 employees working in accounts related sections, procurement and audits were selected from the entire population by use of stratified sampling method by applying Yamane formula as shown. Data was collected by use of a research questionnaire. Data collected was reorganized edited, coded and key in to the statistical programs for analysis then the coded data was analyzed using descriptive statistics such as, mean and standard deviation. The data was presented by tables and it indicated that segregation of duties had a negative influence on financial performance of tea firms. It was concluded that segregation of duties need to be done with utmost care to avoid the negative impacts of this variable. On compliance tests, the study established that there was need to have strong compliance tests within the firms in order to enhance the financial performance of the firms as this variable was found to positively affect the financial performance of the tea firms. It was also realized that internal controls and checks positively influence the financial performance significantly and therefore recommended that firms need to ensure that internal controls need to be instituted and enhanced for ultimate optimal financial performance
Effects of Financial Management Practices On Profitability of the Tea Firms in Kenya: A Case of Ktda Factories in Kisii County
Immaculate Mong’ina Obara, Professor Willy Muturi, Kenya
Abstract: The purpose of the study was to examine the effects of financial management practices on profitability of tea firms in Kisii County, Kenya. The specific objectives were; to establish the effects of cash management on profitability of tea firms, to evaluate the effects of inventory management on profitability of tea firms. The study adopted Agency Theory and Free Cash Flow Theory and was done in Kisii County. The study adopted descriptive research design. The target population was 48 employees comprised of tea firms. Census method was used to select 48 employees as the sample of the study. Questionnaire was used to collect primary data. Secondary data was collected through financial records for the last five years of operations. The collected data was edited, coded and analyzed by use of descriptive statistics such mean and standard deviations. The study used inferential statistics such as correlation analysis and regression models to establish the relationship between variables. The analyzed data was presented by use of tables and figures. The study found that the majority of employees working in tea factories were well educated with at least form four qualifications. Liquidity is essential for cash management of the company. Increasing cash collection increases cash levels in the tea factory. The study concluded that inventory management practices affected profitability of tea firms in Kisii county. However, the study concluded that required stock levels are used to improve production process which increases sales. Stock held increases customer’s loyalty in the factory is only little. The study recommended that proper debtor records should be embraced by tea firms with variation in outstanding debt annually. Debtor collection period should be measured by reporting periodical returns. Further, using internal rate of return tea firms should embrace in proper financing. Profitability index should ensure risk investment is avoided. Firm should downsize labor costs to increase profits. Further the firm should use cost reduction strategy to increase revenue. Another study can be conducted to examine the effect of financial management practices on financial performance in other firms
Effect Of Audit Committee Characteristics On Financial Reporting of Selected Saccos In Kisii County, Kenya
Machora M. Nelson & Dr. Oluoch Oluoch, Kenya
Abstract: The researcher sought to establish the effect of audit committee characteristics on financial performance among deposit taking SACCOs in Kenya. This study was supported by the following specific objectives: to determine the effect of size of audit committee, the composition of audit committee, and the independence of the audit committee. This research adopted a descriptive research design. This study target population was 166 employees working in deposit taking SACCOs. The study has shown that audit committee experience is positively associated with firm performance. Descriptive statistics and inferential statistics were used. The findings established that independent auditors have a negative influence on firm performance. It was concluded that the size of the audit committee should be embraced so as to have expertise in improving financial performance of SACCOS.
Measurement of Accounting Information and Managerial Decision Making: Analytical Evidence from Rwandan Savings and Credit CooperativeOrganizations
Dr. MBONIGABA Celestin, Rwanda
Abstract: This study was about evaluating the contribution of accounting information on managerial decision making. The study considered total population is 10 in period of 2016-2018 where a sample size of 8 respondents was considered. The findings show that the predictor variables; income statement, balance sheet and cash flow statement explained the decision making in Cooperative Kanjongo SACCO. R square of 0.956 (95.6%) supported the findings. This implies that the predictor variables (income statement, balance sheet and cash flow statement) can explain the decision making at 95.6%. By conclusion, it is clear from study area that accounting information contribute in decision making of Umurenge SACCO daily operations to ensure its effective management.