Browsing by Author "Njagi, Gerald K"

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Effect Of Financial Structure On Financial Distress Of Semi-autonomous Government Agencies And State Corporations In Agricultural Sector In Kenya
(KCA University, 2024) Njagi, Gerald K
The study investigated the effect of financial structures specifically short-term debts, long-term debts, capital reserve, and retained earnings on the financial distress among SAGAs and SCs in the agricultural sector of Kenya. Data used was from 2017 to 2021, collected from financial statements and other government reports. The analysis was conducted using SPSS v26 to employ both descriptive and inferential statistical techniques. Hausman test done implied that fixed effect model was appropriate model to be used. Results of regression analysis stated that short-term debts and long term debts were statistically significant and had negative effect on the Altman’s Z score indicating increase in financial distress while capital reserve and retained earnings were statistically significant and had positive effect indicating decrease in financial distress. Normality was accepted by both Kolmogorov-Smirnov and Shapiro-Wilk tests. Variance Inflation Factors and Tolerance values were below 10 and above 0.1 respectively, indicated no significant multicollinearity. Diagnostic tests confirmed no significant issues with heteroscedasticity or autocorrelation, validating the regression results. The findings suggested that policymakers and financial managers within SAGAs and SCs should focus on emphasizing the importance of a well-balanced financial structure and the need for prudent financial management to avoid alleviated financial distress mostly by enhancing retained earnings and capital reserve to improve financial stability. Further studies could explore the impact of other financial and non-financial factors on the financial health of SAGAs and SCs, as well as investigate sector-specific challenges and solutions.