Theses and Dissertations

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    The Effects Of Total Quality Management On Profitability: The Case Of International Organization For Standards (Iso) Certified Companies In Kenya
    (KCA University, 2013) Kuria, Lucy W.
    Total Quality Management (TQM) is an accepted technique to ensure performance and survival of businesses in modern economies. Recent studies claim that the successful implementation of TQM could generate improved products and services, as well as reduce costs, lead to more satisfied customers and employees, and eventually improved financial performance. The purpose of this study was to establish whether this nature of relationship exists between TQM and financial performance in ISO certified companies in Kenya. The objective of this study was, therefore, to establish the effect of the implementation of TQM in ISO certified companies in Kenya. This study was a survey focused on establishing management environment, quality control tools and techniques, focus on customer and focus on supplier relationship affect ROA as a measure of financial performance. All the 38 ISO certified companies formed the sample of this study effectively making it a census. Data was collected by a questionnaire delivered by hand to the selected ISO certified company and collected after a week. The study found that management environment, quality control tools and techniques, focus on customer and focus on supplier relationship affected the returns of ISO certified companies. However, the regression analysis showed a weak relationship among the variable. This indicated by the constant term, 6.68 which was not significant; the coefficient of quality management environment, -24.27 which was statistically insignificant; the coefficient of focus on customers, 12.27 which was statistically insignificant; the coefficient of quality control tools and techniques, 7.06, which was statistically insignificant; and the coefficient of focus of supplier relationship, 7.37, which was also statistically insignificant. The study recommends that ISO certified organizations should put in place strong management environment policies. The policies should focus on putting in place a favorable work environment and ensuring sufficient financial resources that will enable achievement of organizational objectives and boost profitability. Focus on the customer should also be strengthened. Companies should put in place more effective mechanisms for quality control. Supplier relationship should also be strongly managed.
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    Effect Of Trade Receivables On Profitability Of Manufacturing And Allied Firms Listed At Nairobi Securities Exchange
    (KCA University, 2014) Adembo, Carden A.
    The three main ways of financing a firm are issuing of equity, retention of earnings and issuing of debt capital. Trade receivables securitization is another upcoming avenue of raising capital that brings the benefit of low cost and enables firms to streamline their financial statements and utilize the raised capital in a more prudent way to improve its credit rating and have better financial ratios which improves profitability of the firm. This study analyzed the effect of trade receivables on the profitability of 24 Kenyan listed Manufacturing and allied firms for the period 2008-2012. Return on Assets was used as the measure of profitability. The target population of the study was all the twenty four manufacturing and allied listed firms at NSE between 2008 to 2012. Comparable data for this period on Debtors Collection Period (DCP), Cash Conversion Cycle (CCC), and Accounts Receivable Turnover (ART) was used to have an analysis on their relationship with the return on assets. The study utilized panel data where profitability for each of the 24 manufacturing firms for each year over the 5 year period was related to the trade receivables variables. Secondary data was obtained from Audited financial Statements of the firms as well as the NSE handbooks over the five year period. Pearson correlation was used to establish the relationship between the variables under consideration. The study is expected to give policy direction on the management of trade receivables as a key accounting item for the manufacturing firms. The study found out that the trade receivables, Debtors Collection Period, Cash Conversion Cycle and Accounts receivable turnover (ART) had an insignificant effect on the return on assets of manufacturing firms. Using the return on assets as the measure of profitability, the three variables do not have a significant impact on the profitability. Further studies may consider using assessing the effect of the trade receivables on other measures of profitability or financial performance such as liquidity.
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    Determinants Of Dividend Payout In Kenya; Evidence From Manufacturing Firms Listed In The Nairobi Security Exchange
    (Kca University, 2017) Malietso, Oscar M.
    iii ABSTRACT The study investigated determinants of dividend pay-out among manufacturing firms listed in Nairobi Security Exchange that covered duration of 10 years effective from 2007 to 2016. Secondary data which comprised of audited financial statements was obtained from the website of the Capital Market Authority. Purposive sampling technique was applied to select 7 firms out of the 10 listed manufacturing firms. Dividend Pay-out measured by dividend per share over earnings per share is the dependent variable while Profitability, Liquidity and Leverage were predictor variables being investigated while Firm size was applied as a Moderating variable. Random Effect Tobit Model is applied in regression due to its suitability to accommodate zero censored values constituted among dependent variable. In addition, Descriptive Statistics is used for analytical purposes on data sampled in aspect of mean, mode and variance. Findings of the research reveals that Liquidity whose p-value is 0.097 hence greater than 0.05 (p > 0.05) insignificantly influences dividend pay-out. However, Leverage and Profitability do have p-values of 0.002 and 0.003 respectively which is less than 0.05, implying they significantly determine how manufacturing firms pay dividend to investors. Moderating variable Firm size increases precision of significance of the model from 0.15 to 0.02 hence considered as significant determinants of dividend pay-out. Based on this outcome, management ought to not only exercise due diligence when borrowing to prevent an entity from liquidation but also invest in noble projects that are geared towards profit maximization as empirically proven by the study. Future research in this context should consider inclusion of more independent variables like Earnings per share, like business risk, earnings per share, taxation, ownership in so doing accuracy is enhanced on proportionality of influence per variable on dividend pay-out. However, component of entity in terms of sector and economic empowerment of a region is paramount since it has a bearing on the end results of the entity which obvious play a vital role on how dividend is issued as alluded by Amarjit et al., (2010). Finally, the outcome of this study will enable potential investors understand the parameters to consider while making decision to invest in Kenya’s manufacturing firms not forgetting insight to management on impact of dividend pay-out to entity reputation as proclaimed in signalling theory.
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    Effect Of Risk Mitigation Costs On Financial Performance Of Manufacturing Firms Listed In The Nairobi Securities Exchange In Kenya
    (Kca University, 2017) Kihara, Benson K.
    The desire of manufacturing firms like any other business is to maximize profits, achieve wealth maximization and growth. In the midst of this endeavor, businesses are exposed to various risks (uncertainties resulting in adverse variations of profitability or in losses) which need to be mitigated, to mitigate these risks are a cost to the firm. Kenya’s manufacturing sector is going through a major transition period largely due to the structural reform process, which the Kenya Government has been implementing since the mid-eighties with a view to improving the economic and social environment of the country. Manufacturing firms fall under the umbrella of Kenya Association of Manufacturers. By incorporating risk management into manufacturing firms’ operations, manufacturing firms are better equipped to exploit their resources, thereby enabling their organizations to transform an expenditure activity into an activity that can yield a positive return. However, risk management is a cost to the firm. Several studies relating to risk mitigation have previously been conducted in Kenya. However, there lacks evidence so far of a study conducted in Kenya to investigate the impact of risk mitigation costs on the financial performance of manufacturing firms listed in the Nairobi Securities exchange in Kenya. Therefore, this study sought to fill this gap by answering the following question; what is the effect of risk mitigation costs on the financial performance of manufacturing firms listed at the Nairobi securities exchange in Kenya. The study adopted a correlation approach and panel data design. The population of the study was the 10 manufacturing firms listed at the Nairobi securities exchange in Kenya. The objective of the study was to establish the effect of risk mitigation costs (Insurance cost, security cost and audit cost) on financial performance of manufacturing firms listed at the NSE. The study relied on secondary data which was analyzed using STATA software and the results presented in tables. The results consistently support the potential association between the three independent variables and the dependent variable (Financial performance) for manufacturing firms listed at the NSE. At 5% level of significance, Insurance cost and audit cost were found to be statistically significant while cost of security was not significant. Moreover, the overall r squared 71.39% showed that the independent variables can explain 71.39% of variability in the dependent variable which means that 71.39% variation on return on assets was explained by the risk mitigation costs when combined. Based on the findings and conclusions of the study we therefore recommend that the manufacturing firms should consider risk mitigation cost in their budget planning. Of much importance is the cost of insurance and audit cost the firms must seek the most optimal insurance services to cover the risk of the firms as this improves the level of confidence of the stakeholders about the future uncertainties of the firm. Firms should also consider highly the auditors they have chosen to audit their books. Audit exercises whether internal or external help to identify the risk exposure of institutions. The audit reports also communicate the authenticity of the financial reports prepared and presented by the directors of the firm. These reports also identify areas of improvement to the management. The stakeholders of firms consider the credibility of auditors while looking at a firm. The more credible the audit firm is, the higher the reliability of the reports of institutions. These enhances the level of business agreement and negotiations with external parties which in turn improves on cost management in other areas. Finally, manufacturing firms need to improve the security of the firms we not necessarily to improve their performance but for security and safety purposes.
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    Effect Of Asset Restructuring On Financial Performance Of Tier Three Commercial Banks In Kenya
    (KCA University, 2020) Kipelian, Samson K.
    The study objective aimed at establishing the effect of asset restructuring on tier three commercial banks in Kenya financial performance. Generally, when asset restructuring is employed by the firm‟s management then it should have some effects on the profitability of banks. Therefore, a study was conducted on the tier three commercial banks in Kenya, which is the registered under Central Bank Act and which was in operation during this research period from 2010 to 2019. The ratios that make the variables under consideration on non-performing assets, written off assets, restructured loans and asset assets management level was computed from the data collected and extracted from CBK reports and the respective banks annual financial statements. The data collected from the secondary sources was then cleaned, coded, and analyzed using statistical package for social science. The theories guided the study include gambler‟s ruin theory, free cash flow of cash management theory and the resource-based credit risk modeling theory. The study found out that non-performing loans have a negative and statistically significant effect on the financial performance of tier three commercial banks in Kenya, found that non-performing assets had a statistically positive significant effect on the profitability of tier three commercial banks. The study established that written off assets had a positive and statistically insignificant effect on the profitability of tier three commercial banks in Kenya. The study concluded that financial performance in tier three commercial banks is most likely to be caused by non-performing loans as a variable in asset restructuring. The study recommends that the tier three commercial banks should review their loan criteria and procedures to reduce the cases of default. Additionally, the written off assets criteria needs to examined if the tier three commercial banks are to attain financial stability. The study had a secondary data limitation which was obtained from the supervisory report by the CBK and individual banks audited financial statements. Further, the study recommends that the government should review the liquidity requirements of banks as the liquidity does not help in generating income. The finding of this study will offer insight to fiscally Kenyan distressed banks on the asset restructuring effect in order to enhance the profitability of their financial institutions with an opinion to ensure sustainability in a competitive financial market while meeting their social objective.
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    Factors Affecting Cashflow Of Manufacturing Firms Listed At The Nairobi Securities Exchange
    (Kca University, 2019) Musembi, Damaris M.
    Cash flow is the life blood of any business. Firms with inadequate cash flow experience difficulties in growing their business as they struggle to fund their basic operations. A firm has to invest either in working capital, assets or in other ways but if it lacks cash flows it’s not in a position to do so. Manufacturing firms require a lot of cash flows to run their operations. These manufacturing firms require a lot of machines for production as well as a lot of cash to buy raw materials. Also, a huge amount of cash is paid out as salaries and wages as the manufacturing sector is labor intensive. Manufacturing firms are faced with many challenges especially in managing their cash flows. Therefore, the researcher in this study sought to establish the factors that affect cash flow in manufacturing firms in Kenya. The study was guided by the following specific objectives, to establish how investments affect cash flow in manufacturing firms listed in the Nairobi stock exchange, to find out how inventory controls affect cash flow in manufacturing firms listed in the Nairobi stock exchange, to determine how profitability affect cash flow in manufacturing firms listed in the Nairobi stock exchange. The researcher used descriptive research design to describe the factors affecting cash flow in manufacturing firms listed in the Nairobi stock exchange. A firm should be able to generate enough cash flows from its operations. If a firm is not able to cover its current liabilities with cash generated from operations, it will have cash challenges in financing its operations. A cash flow ratio of one show that the firm has healthy cash flows and a ratio of less than one shows that the firm does not have enough cash flows to finance its operations. The study covered a period of five years from 2012 to 2017.The methodology for the study was descriptive research design. The study employed population census as the listed firms were very few for the researcher to employ sampling. The listed firms were nine. Secondary data was used in the study. The data was extracted from published financial statements which included statement of financial position, statement of cash flows and statement of comprehensive income. Data was analyzed using STATA software and panel data analysis methods were used. Analyzed data was presented using figures and tables. The study findings revealed that there is a positive relationship between cash flows and investments as measured by net capital expenditure, profitability as measured by return on assets. There is a negative relationship between cash flows and inventory control as measured by inventory turnover. The study also established that there is a positive relationship between cash flows and profitability of a firm as measured by return on Assets (ROA). cash flows in all the firms have the same trend expect for Eveready East African ltd. The study concluded that manufacturing firms should exercise inventory control, invest wisely and also manage profitability of assets to ensure that the firm has enough cash flows to fund its operations.
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    Determinants Of Dividend Payout For Firms Listed At Nairobi Securities Exchange
    (Kca University, 2022) Njiraini, Casto N.
    Over the years, dozens of theories have attempted to explain the dividends phenomenon with no consensus reached. Many of the theories view agents as rational and dividends either serve as an efficient way to resolve agency problems or as a signaling device to mitigate information asymmetry problems. This study sought to establish the determinants of dividend payout ratio for companies listed at the Nairobi Securities Exchange. The specific objectives of the study were to determine the influence of profitability, liquidity, leverage and firm size on dividend payout ratio for companies listed at the Nairobi Securities Exchange. The target population of the study were all the 64 firms listed at the NSE as at 31st December 2021. However, one of the firms was listed after 2017 while 5 were suspended remaining with 58 listed firms at NSE. Thus, a census of all the 58 NSE listed firms was conducted. The study employed descriptive research design and secondary data was collected for a period of 5 years, from 2017 to 2021. Data was analyzed using descriptive statistics and panel data regression. Descriptive statistics involved determining the mean, the standard deviation, skewness and kurtosis for each variable under study. Panel data regression analysis established the nature and significance of the relationship between the study variables. Stata version 16 was employed to analyze the data. The analyzed data was presented using tables and charts. The findings of the study indicated that firm size, liquidity and profitability of the companies listed at the Nairobi securities exchange had a positive and statistically significant relationship with dividend payout. However, financial leverage was found to have a positive but insignificant effect on the dividend payout of the listed firms under study. The study recommended that the listed firms under study should focus on making their operations cost efficient and effective to maximize profits and should invest some resources in fixed assets but have more investments in liquid assets. The firms relying on loans to finance its operations should not focus on paying dividends to its shareholders but the immediate focus of these firms and finally the firms should focus on investing the profits accrued from the operations of the company back to the company to grow the company and make it stable.