Theses and Dissertations

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    The effect of capital structure on profitability of non-financial firms listed at Nairobi security exchange
    (Kca University, 2016) Opungu, Jackson A.
    Good capital structures are critical for the survival of any business firms in any economic arrangement or set up. The current study’s purpose was to investigate the effect of capital structure on profitability of non-financial firms listed at Nairobi Stock Exchange (NSE). The study tested the null hypotheses that there is no relationship between short term debt-equity ratio, long term debt-equity ratio and equity on profitability of non-financial firms listed at NSE. The theoretical basis of the study was on agency theory, static trade off theory, pecking order theory and MM capital structure irrelevance theorem. Descriptive research design was applied in this research study. The study applied the epistemology philosophy based on positivist paradigm. The target population for this study was all the listed non-financial firms in the NSE as at 31st March 2015. Data for these 41 companies for five years (2010 – 2014) was used in the study. Secondary data applied in this study was collected from the audited financial statements of the companies, NSE and the Capital Markets Authority. Panel data regression (fixed effects) model was applied in analysis. Stata statistical software was utilized. The study findings indicate that short term debt equity ratio negatively and significantly affects ROA, ROE and ROCE. Long term debt equity ratio has a negative effect on return on assets and return on equity but has an insignificant effect on ROCE. Equity has a positive and significant relationship with ROE and ROCE but has an insignificant effect on ROA. The following recommendations are made. First, though short term debt is a source of quick liquidity for the firm during emergencies, they bring shocks and added riskiness to the firm and hence managers should apply these sources of financing with caution. Secondly, managers should establish the level of debt of debt to equity that is optimum for the firm and seek to achieve this optimum level. Firms should however, mostly rely on retained earnings for expansion and growth. Thirdly, the study recommends that managers in non-financial firms should effectively manage the amount of borrowed capital in the firms’ capital structure since high debt levels will mean more interest payments and thus cash outflows.
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    Effect Of Investment Decision On Profitability Of Deposit Taking Savings And Credit Cooperatives In Nairobi County, Kenya
    (KCA University, 2023) Mwende, Dorcus
    This study sought to evaluate the effect of the expansion decision on the profitability of SACCOs in Nairobi County; to assess the effect of replacement decisions on profitability of SACCOs in Nairobi County; to evaluate the effect of renewal decision on the profitability of SACCOs in Nairobi County; and to assess the effect of research and development decision on the profitability of SACCOs in Nairobi County. This study intent was to determine how investment decision impact the profitability of SACCOs in Nairobi. The study population was the 40 DT- SACCOs in Nairobi County, Kenya. The independent variable for the study was investment decisions with four measures: investment in expansion decision, investment in replacement decision, investment in renewal decision and investment in research and development. Profitability (ROI) was the response variable which was the primary focus. The study utilised secondary data from 2018 to 2022 (4 years) on annual basis. A descriptive design together with multiple linear regression model were used for the analysis of the variables. For this analysis, the researcher used STATA software. The finding gave an R- square value of 0.189 approximately 18.9% of the variation in the dependent variable can be accounted for by the independent variables. Additionally, around 2.74% of the variation in the dependent variable can be attributed to differences between groups or categories, while overall, about 12.4% of the variation in the dependent variable remains unexplained. This analysis further revealed results show that the F statistic was substantial at 5% level with P=0.000. This shows that the model was suitable for the study to provide an explanation of the variables. The results also showed that investments in expansion and renewal decisions produced positive and statistically substantial values for this study while investments in replacement and research & development were found to be statistically insignificant determiners of profitability. This study recommends that measures should be put in place to enhance investment in expansion and renewal decisions. As this two have a substantial influence on profitability of DT-SACCOs in Nairobi.