Effect of cash flow management activities on financial performance of manufacturing companies in Nairobi

Bachelor Thesis , 2019 , 49 Pages , Grade: 2

Economics - Finance

This study will target 735 manufacturing companies divided into 14 categories located in Nairobi. A stratified sampling method will be used to determine the population sample guided by Naasiuma Model to come the sample size. Secondary data will be collected based on the financial statements as well as data from KAM website. Collected data will be prepared and then analyzed by use of STATA software. Diagnostic tests will carried out to ensure that the classical linear modeling assumptions are not violated. Collected data will then be subjected to various analytical tools like Mean, Standard deviation, Correlation and Regression analysis so as to achieve the objective of the study. Finally the analyzed information will be presented in tables, charts and figures to aid in recommendation and future decision making.

Cash flow shortfall has proved to be one of the issues facing manufacturing companies in Nairobi. Companies with cash flow problems have witnessed a lot of struggle when it comes to settling their credit commitments whenever they fall due. In some cases, the effect has resulted into extreme losses, low profits, business operation difficulty and high financial costs due to excessive borrowing. The general objective of this study is to determine the effect of cash flow management activities on the financial performance of manufacturing companies in Nairobi. To achieve this objective this study will examine how the three main components of cash flow statement component impact on the financial performance of companies under the scope. Cash flow activities according to Kew et al are cash flow from operating activities, cash flow from investing activities and cash flow from financing activities. To measure the financial performance of manufacturing companies, the study will apply two key financial ratios which include Return on Equity (ROE) and Return on Assets (ROA). Independent variables will be measured using net values of each activity as reported in the cash flow statement. The study will adopt a descriptive research design.

Inhaltsverzeichnis (Table of Contents)

• ABSTRACT
• TABLE OF CONTENTS
• LIST OF FIGURE AND TABLES
• CHAPTER ONE
  • 1.1 Background of the Study
  • 1.2 Statement of the Problem
  • 1.3 Research objective
  • 1.4 Research Questions
  • 1.5 Justification of study
  • 1.6 Scope of the study
• CHAPTER TWO
  • 2.1 Introduction
  • 2.2 Theoretical Review
  • 2.3 Empirical Review
  • 2.4 Knowledge Gap
  • 2.5 Conceptual framework
  • 2.6 Operationalisation of Variables
• CHAPTER THREE
  • 3.1 Introduction
  • 3.2 Research design
  • 3.3 Target Population
  • 3.4 Sampling and sampling procedure
  • 3.5 Data Collection Instrument
  • 3.6 Data collection procedure
  • 3.7 Data Processing and analysis
  • 3.8 Research Ethics
• REFERENCES

Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)

This research study aims to investigate the impact of cash flow management activities on the financial performance of manufacturing companies in Nairobi. The study focuses on the three primary components of the cash flow statement: cash flow from operating activities, cash flow from investing activities, and cash flow from financing activities.

• The impact of cash flow management activities on financial performance.
• The relationship between cash flow activities and key financial ratios.
• The role of cash flow management in achieving financial objectives.
• The challenges faced by manufacturing companies in managing their cash flow.
• The importance of effective cash flow management for the success of manufacturing companies.

Zusammenfassung der Kapitel (Chapter Summaries)

The research begins by providing a comprehensive background on the significance of cash flow management within the context of manufacturing companies in Nairobi. The study then delves into the theoretical and empirical literature surrounding the subject, highlighting existing research and knowledge gaps. The methodology employed is meticulously explained, detailing the research design, target population, sampling methods, data collection techniques, and data analysis approaches.

Schlüsselwörter (Keywords)

This research study revolves around the core concepts of cash flow management and financial performance in the context of manufacturing companies in Nairobi. Key terms include cash flow activities, operating activities, investing activities, financing activities, financial performance, return on equity (RoE), return on assets (ROA), and financial ratios.

• College: Kenyatta University
• Grade: 2
• Author: Wycliffe Motende (Author)
• Publication Year: 2019
• Pages: 49
• Catalog Number: V497193
• ISBN (eBook): 9783346015822
• ISBN (Book): 9783346015839
• Language: English
• Tags: effect, nairobi