EFFECT OF WORKING CAPITAL MANAGEMENT ON FINANCIAL PERFORMANCE OF LISTED COMMERCIAL AND SERVICES FIRMS IN KENYA ISAAC NYARERU NYANGWESO A RESEARCH PROPOSAL SUBMITTED TO THE COLLEGE OF HUMAN RESOURCE DEVELOPMENT IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF A DEGREE OF MASTER OF BUSINESS ADMINISTRATION IN FINANCE OF JOMO KENYATTA UNIVERSITY OF AGRICULTURE AND TECHNOLOGY 2018 DECLARATIONThis research proposal is my original work and has not been presented for a degree in any other university

EFFECT OF WORKING CAPITAL MANAGEMENT ON FINANCIAL PERFORMANCE OF LISTED COMMERCIAL AND SERVICES FIRMS IN KENYA
ISAAC NYARERU NYANGWESO
A RESEARCH PROPOSAL SUBMITTED TO THE COLLEGE OF HUMAN RESOURCE DEVELOPMENT IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF A DEGREE OF MASTER OF BUSINESS ADMINISTRATION IN FINANCE OF JOMO KENYATTA UNIVERSITY OF AGRICULTURE AND TECHNOLOGY
2018
DECLARATIONThis research proposal is my original work and has not been presented for a degree in any other university.

Signed……………………Date……………………
Isaac Nyareru Nyangweso
HD 333 – C 004 – 0746 / 2015
This research proposal has been submitted with my approval as university supervisor.

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Signed………………………Date ……………………..

Dr. Joshua Matanda
JKUAT, Kenya
DEDICATIONTo Almighty God, for the strength to write this proposal. To my family for their resolute moral and financial support during the entire period of writing the proposal.

ACKNOWLEDGEMENTThanks to the almighty God without whose blessing this study would not have been possible. I would also like to express my sincere gratitude and thanks to my supervisor, Dr. Joshua Matanda for guidance during my master’s program, for the time devoted to guide me throughout the proposal development. I also extend my gratitude to my family who have been patient with me during my absence while doing course work. I also convey my sincere gratitude to my brothers and sisters, for their best wishes, prayers and support. Thanks to my friends and colleagues for sharing knowledge and valuable assistance during my study.
TABLE OF CONTENT
TOC o “1-2” h z u DECLARATION PAGEREF _Toc523745773 h iiDEDICATION PAGEREF _Toc523745774 h iiiACKNOWLEDGEMENT PAGEREF _Toc523745775 h ivTABLE OF CONTENT PAGEREF _Toc523745776 h vLIST OF FIGURES PAGEREF _Toc523745777 h viiLIST OF ABBREVIATIONS AND ACRONYMS PAGEREF _Toc523745778 h viiiOPERATIONAL DEFINITION OF TERMS PAGEREF _Toc523745779 h ixABSTRACT PAGEREF _Toc523745780 h xiCHAPTER ONE PAGEREF _Toc523745781 h 1INTRODUCTION PAGEREF _Toc523745782 h 11.1 Background to the Study PAGEREF _Toc523745783 h 11.2 Statement of the Problem PAGEREF _Toc523745784 h 101.3 Research Objectives PAGEREF _Toc523745785 h 121.4 Research Questions PAGEREF _Toc523745786 h 131.5 Justification of the Study PAGEREF _Toc523745787 h 131.6 Scope of the Study PAGEREF _Toc523745788 h 15CHAPTER TWO PAGEREF _Toc523745789 h 17LITERATURE REVIEW PAGEREF _Toc523745790 h 172.1 Introduction PAGEREF _Toc523745791 h 172.2 Theoretical Literature Review PAGEREF _Toc523745792 h 172.3 Conceptual Framework PAGEREF _Toc523745793 h 212.4 Empirical Literature Review PAGEREF _Toc523745794 h 302.5 Critique of the Existing Literature PAGEREF _Toc523745795 h 362.6 Research Gaps PAGEREF _Toc523745796 h 372.7 Chapter summary of the Literature Reviewed PAGEREF _Toc523745797 h 38CHAPTER THREE PAGEREF _Toc523745798 h 40RESEARCH METHODOLOGY PAGEREF _Toc523745799 h 403.1 Introduction PAGEREF _Toc523745800 h 403.2 Research Design PAGEREF _Toc523745801 h 403.3 Target Population PAGEREF _Toc523745802 h 403.4 Sampling and Sampling technique PAGEREF _Toc523745803 h 413.5 Data Collection Instruments PAGEREF _Toc523745804 h 423.6 Data Collection Procedure PAGEREF _Toc523745805 h 423.7 Data Analysis and Presentation PAGEREF _Toc523745806 h 43REFERENCES PAGEREF _Toc523745807 h 45Appendix I: Secondary Data Collection Sheet PAGEREF _Toc523745808 h 52Appendix II: Work Schedule PAGEREF _Toc523745809 h 53Appendix III: Budget Estimates PAGEREF _Toc523745810 h 54Appendix IV: List of Commercial and Services Firms listed at NSE PAGEREF _Toc523745811 h 55
LIST OF FIGURES TOC h z “Heading 5” c Figure 2.1: Conceptual Framework PAGEREF _Toc523745812 h 22
LIST OF ABBREVIATIONS AND ACRONYMSACPAverage Collection Period
APPAverage Payment Period
CBK Central Bank of Kenya
CCCCash Conversion Cycle
CMA Capital Markets Authority
EBITEarnings before Interest and Tax
EPSEarning Per Share
GDP Gross Domestic Product
ITOInventory Turnover
KAMKenya Association of Manufacturers
KSEKarachi Stock Exchange
NSE Nairobi Securities Exchange
ROAReturn on Assets
ROE Return on Equity
SME Small and Medium Enterprises
TCE Transaction Cost Economics
WC Working Capital
WCM Working Capital Management
OPERATIONAL DEFINITION OF TERMS
Average Collection Period: Agyei and Yeboah, (2011) defined the average collection period as time taken by firm to receive their payments they have in terms of accounts receivable
Average Payment Period According to Mathuva, (2010) the average payment period refers to the number of taken by a firm to offset their credit purchases.

Cash Conversion Cycle Almazari, (2013) defined the cash conversion cycle as the time taken between firm to purchase inventory and the receipt of cash from the accounts recievable.

Financial Performance Lazaridis, (2008) defined the financial performance as growth in sales and assets of the business firm.

Inventory Conversion Period: According to Raza, Bashir, Latif ; Shah, (2015) the inventory conversion period refers to time taken by the company to invest its cash in purchasing of the raw material and convert the raw materials into a sale.

Profitability This is the degree to which a firm yields financial gains. Profit refers to the excess revenue that is attained after the expenses of an activity over a given period of time.

Working Capital refers to the amount of capital that a firm business uses on daily operations, normally calculated by subtracting current liabilities from current assets.

Working Capital Management Refers to the ability of the firm to fund into the short term assets and short term liabilities, and involves planning and controlling current assets and current liabilities in a manner that eliminates the risk of inability to meet short term obligations on one hand and avoids excessive investment in these assets on the other (Garg, 2015).
ABSTRACT
The Working Capital Management of a firm is a central part of the financial decision making process as it directly affects the profitability and the liquidity of a firm. Presently, there are no specific formulae used to establish working capital requirements of firms in different industries. Several of the commercial and services firms listed at NSE are experiencing declining financial performance and some have even been delisted from the NSE in the last decade despite the enormous contribution of the firms to the economy the country. This is contrary to the expectations of their stakeholders who span across shareholders, employees, consumers, and government among others. The main objective of this study therefore is to establish the effect of WCM on financial performance of listed commercial and services firms in Kenya. The specific objective are: to establish the influence of average collection period on financial performance of listed commercial and services firms in Kenya; to determine the effect of inventory conversion period on financial performance of listed commercial and services firms in Kenya; to examine the effect of average payment period on financial performance of listed commercial and services firms in Kenya and to assess the influence of cash conversion cycle on financial performance of listed commercial and services firms in Kenya. This study will adopt a descriptive survey research where variables are described by a set of methods and procedures. The study will focus on the 12 commercial and services firms listed at NSE over the period 2008-2017. This study will use a census especially because the population of 12 commercial and services firms listed at NSE is small therefore rules out application of specific sampling techniques. Both descriptive and inferential statistical techniques will be used to analyse the data using SPSS. Descriptive statistics will be used for quantitative data analysis. Inferential statistics of correlation and regression analysis will also be employed to establish the effect of the independent variables on the dependent variables.
CHAPTER ONEINTRODUCTION1.1 Background to the StudyIn the present business environment, firms require effective management of working capital that provides a financial metric which signifies effective liquidity accessible to the firm for the purpose of improving various aspects of its financial performance (Azeez, Abubakar, ; Olamide, 2016). A combination of working capital and fixed assets such as equipment and plant are all considered working capital. For instance, when a firm is endowed with assets and profitability, and the assets cannot be turned into cash then it is short of liquidity and therefore it is paramount for the firms to have a positive working capital so as to fulfil both maturation of the short term debt and forthcoming operational expenses (Kasiran, Mohamad, ; Chin, 2016).
According to Azeez, Abubakar, and Olamide, (2016), the most significant subject in financial decision making is working capital as all asset investment entails suitable financing, however WC is overlooked in when making financial decision because it is always involved in investment and financing in short term periods. According to Kimeli (2014), working capital affects financial performance of a firm by failing to contribute return on equity. Firms that achieve maximum value return always have an ideal level of working capital. Owele ; Makokeyo, 2015) argue that a firm with larger inventory helps them to reduce stock-out risks since the trade credits stimulates firm sales by letting the customers to assess the quality of product before doing the payments. The accounts payable is another constituent of working capital, firms delaying payments of the suppliers, the get the opportunity to evaluate the quality of supplied products thus making them financial flexible. Shah, ; Sana, (2005) argue that when invoices payments are done late, increases the cost of the firm incase where discount was to be given for early payment.
According to Owolabi et al., (2012) the primary goal of any business firm is to capitalize on the profitability as well as increase the wealth of firm shareholders or owners, balancing between firm liquidity and profitability during the daily operation of the firm facilitates the smooth running as well as meeting the company’s obligation. Uremandu, Ben-Caleb, & Enyi, (2012) argue that firm profitability, liquidity and growth is directly affected by the working capital management, thus the amount of money invested in a firm as working capital should be similarly high compared to the total assets employed.

Financial performance is measured using financial matrices like profitability, liquidity, solvency, repayment capacity, short-term financial management, financial efficiency and firm over capacity. Profit means the wealth that a company has created from the utilization of its available resources (Valentine, 2014). The liquidity of a business determines its ability to maintain its liquid cash and cash equivalents to meet its debt obligation on a timely basis using the quick ratio and current ratio. Solvency is used to a measure the ability of a business to clear its debt obligations if all its assets are sold together with its ability to recover from financial turmoil (Woodruff, 2014).
A company’s financial performance can also be measured by how well it manages its short term financial goals for example WCM and inventory management (Purdue, 2013). The firm’s financial activities can be measured in monetary terms to provide an insight in the performance of an organization as a whole. This measurement can also be used to determine the firm’s overall wealth over a given time horizon. Tippins ; Sohi, (2003) argue that the most familiar measures of financial performance are ROE and ROA.

The ROE measures earnings over a period of time on shareholders equity investment. It is also the measurement for the amount of income generated by the investment mad by an organization’s owners (equity holders). The return of asset ROA measured the return on total assets after interest and taxes. It provides the management with information on the level of efficiency with which assets are financed by either equity or debt are generating after tax profits to firm (Orlitzky, Schmidt, & Rynes, 2003).

1.1.1 Global Perspective of Working Capital Management
In Pakistan, the WCM is viewed as an integral process of enhancing financial performance (Bagh et al., 2016). Firms maintaining appropriate level of WC will be able to improve its financial performance. According to Bagh et al., 2016, the financial performance of manufacturing firms in Pakistan is influenced by WCM. Bagh et al., (2016) argue that some the WCM practices that influence firm performance through ROA, ROE and EPS include cash conversion cycle and average payment period.

Baveld (2012) in Netherland carried a study on the association between firm’s gross operating profit and accounts receivables. The study findings revealed that during non-crisis period, the relationship between the account receivables and gross operating profit was significant but negative, while during crisis period the relationship between the account receivables and gross operating profit had no significant association. The study recommended that during the crisis the firms in Netherland association between accounts receivables and firm’s profitability changes by minimizing their accounts receivables so as to maximize their profitability during crisis periods.

Mohamad and Saad (2010) argue that the association between current ratio and financial performance among listed Malaysian firms was negative and significant. The study results revealed that the profitability and market value of the firm were greatly affected by WCM. Furthermore, Eljely, (2004) also asserted that the current ratio and profitability of the Saudi Arabia firms was negative.
1.1.2 Regional Perspective of Working Capital Management
According to Louw, Hall and Brummer (2016), decreasing the investment of inventory and trade receivables whereas increasing the trade payables improved the profitability of South African retail firms; inventory management has a strong substantial effect on a firm’s profitability. Louw, Hall and Brummer (2016) recommended that retail firms to implement innovative inventory management systems so as enhance inventory levels and profitability. Akoto et al., (2013), also asserted that correlation between profitability and accounts receivable days of retail firms in South Africa was significant but negative.

Luqman, (2014) in Nigeria analyzed the working capital management of all brewery firms and revealed that cash balances, receivable management and payables and inventories and debtors had a major effect on profitability of breweries firms in Nigeria. The level of leverage affects the corporate profitability negatively and insignificantly. The growth rate in earnings affects the dividend payout ratio negatively while the profitability and net trade cycle affects the dividend payout ratio is affected positively (Oladipupo ; Okafor 2013).

In Ghana, the correlation between CCC and bank profitability is positive and significant, but the size, exchange risk, credit risk and capital structure insignificantly affects the bank profitability (Adjei ; Yeboah, 2011). The firms listed at Ghana Stock Exchange performed poorly than unlisted firms. Akoto et al., (2013), argue that managers can advance shareholder’s capital by setting in measures that to reduce the accounts receivable days to 30 days. In Ghana the domestic regulations were established to safeguard native firms and to prevent them from importers activities at the same time promoting an increase in demand for the local manufactured goods.
1.1.3 Local Perspective on Working Capital Management
According to Kiplimo (2010), in Kenya firms in same industry with shorter cash conversion cycles always records an improved returns, while those firms with lower current ratio to total asset ratios obtain fairly improved returns since they can easily keep the quantity of futile resources at optimum levels. The state owned commercial enterprises of different economic sectors experience diverse working capital characteristics that is influenced their respective average returns on asset (Makori & Jagongo 2013).

The manufacturing companies listed at NSE are significantly affected by working capital as it affects the firm profitability; majority of manufacturing companies cash conversion cycle is longer and this affects the profit of the firm negatively (Makori & Jagongo 2013). The gross operating profit of Kenya listed manufacturing firms has a positive relation with the average collection period and average payment period (Nduati 2014).

Furthermore, Kiilu (2010) study focused on the WCM practices among the large building and construction companies in Kenya and revealed that a majority of surveyed firms had a written statement of leading the amount of cash to hold, i.e. both petty cash and cash at bank. The companies that didn’t have a written statement said that the cash requirement at a given time determined the amount of cash to hold. One of the main WCM practices that were observed was the use of cash budgets.

1.1.4 Listed Commercial and Services Firms in Kenya
According to UNCTAD, (2008), the commercial and service industry have an important role growth of Kenyan economy, they provide job employment opportunities, contribution to the (GDP) and foreign exchange earnings. The Institute of Economic Affairs, (2015) indicated that the two sectors contribution to the country’s economy in terms of total wage employment rose from 55% 1980 to 65% by 2012. To increase their profitability, commercial and services firms should resourcefully cope with their working capital components in order to minimize costs and efficiency in their operations (UNCTAD, 2008).
The firms listed under commercial and services sector at NSE provide major services in the Kenya. Kenya airways and Express limited provide local and international transport by flight. The Nation Media Group and Standard Group limited lead in offering communication services. Other services offered by firms in this category include; retail services, publishing services, gas and oil products, hotel and accommodation services. These services provide a backbone to the economy of Kenya. By producing goods and services demanded by the citizens, they improve their standards of living and improve on the gross domestic product of the nation. For this reasons, these firms attract much attention and interest from the financial experts, researchers, the general public and their management (Kihooto, Omagwa, Wachira & Emojong, 2016).

According to Eljelly (2004), commercial and services firms that manage the components of working capital management efficiently aims to ensure an optimum balance between profitability and risk. This is attained by constant monitoring of accounts payable, accounts receivable, and inventory. The success of commercial and service sector heavily depends on the effective skills of financial managers (Haq & Zaheer, 2011).
Yeboah and Agyei (2012) contends that ensuring a proper balance between the short-term liabilities (current liabilities) and current assets is important in determining the liquidity position of commercial and services firms. Currently there are 12 commercial and services firms listed at NSE (Appendix I). The study will focus on these firms in order to establish the effect of WCM on financial performance of listed commercial and services firms in Kenya.
1.2 Statement of the ProblemSeveral of the commercial and services firms listed at NSE are experiencing declining financial performance and some have even been delisted from the NSE in the last decade (Kihooto, Omagwa, Wachira & Emojong, 2016). This is contrary to the expectations of their stakeholders who span across shareholders, employees, consumers, and government among others. For instance, the Audited financial statements of the Kenya Airways reported a loss of KSh 25.7 billion after tax loss for the year ended in March 2015. During the same year, the financial reports of Uchumi supermarkets suffered financial distress, forcing it to exit Uganda and Tanzania markets (CMA, 2016).
According to Filbeck, and Krueger, (2005), the value of WCM on the profitability of the firm is of great significance, and most firms should be encouraged to invest in current assets due to substantial position in total assets of the firm. The firms WCM detect the financial performance of many farms including the substantial position of total assets. A study by Kasiran, Mohamad, & Chin, (2016) revealed that working capital management in firms enhances liquidity and profitability, risk-return trade off demands that the optimal level must balance the firms profitability and solvency by lessening the liquidity total costs and also reduce the cost of illiquidity. This provides an impetus for this study to establish the influence of working capital management on the financial performance of the listed commercial and services firms in Kenya as the statistics above point at a declining financial performance of these firms which needs to be turned around.
The study is also motivated by the knowledge gaps in some of the past studies that have attempted to examine the effect of working capital management on financial performance but have been limited to different sectors and contexts and therefore their findings might not appropriately apply to the commercial and services industry in Kenya. Similarly, some of these studies were done in countries with different economic conditions to the prevalent situation in a developing country like Kenya and therefore may not applicable to the local context. By factoring in the significance of WCM the study focused on examining association between WCM and financial performance relationship such as Sharma and Kumar (2011); Gul et al., (2013); Oladipupo and Okafor (2013); Almazari, (2013); Akoto et al., (2013)and Raheman et al., (2010).

The existing local studies on WCM and financial performance have not focused on commercial and services sector in Kenya. Gakure, et al., (2012) examined the association between WCM and performance of 15 manufacturing firms listed at the NSE, Mathuva (2010) study focused on the impact of WCM on corporate profitability of firms listed at the NSE and Nyamao, Patrick, Martin, Odondo and Simeyo (2012) on the effect of WCM practices on financial performance. However, these studies provide no evidence on the effect of WCM on financial performance of listed commercial and services firms in Kenya not did they focus on the same variables as this study.
1.3 Research Objectives1.3.1 General Objective
The proposal aims to establish the effect of working capital management on financial performance of listed commercial and services firms in Kenya
1.3.2 Specific Objectives
To establish the effect of average collection period on financial performance of listed commercial and services firms in Kenya
To determine the effect of inventory conversion period on financial performance of listed commercial and services firms in Kenya
To examine the effect of average payment period on financial performance of listed commercial and services firms in Kenya
To assess the effect of cash conversion cycle on financial performance of listed commercial and services firms in Kenya
1.4 Research QuestionsWhat is the effect of average collection period on financial performance of listed commercial and services firms in Kenya?
To what extent does inventory conversion period affect financial performance of listed commercial and services firms in Kenya
How does average payment period affect financial performance of listed commercial and services firms in Kenya
What is the effect of cash conversion cycle on financial performance of listed commercial and services firms in Kenya
1.5 Justification of the StudyThe focus of the study will be to establish the effect of WCM on financial performance of listed commercial and services firms in Kenya. The contributions of the study will be provide essential information for policy formulation and adoption of the necessary WCM practices that will improve the financial performance of not just the listed commercial and services firms but also other firms. The results of this study will therefore be of benefit to different stakeholders in the commercial and service industry.
1.5.1 Government and Policy Makers
The commercial and services industry is key a contributor and facilitator of the country’s GDP. The recommendations of the study will aid the government in identifying the importance of understanding correct mix of working capital which in turn helps in boosting financial performance because sound financial performance of the industry is crucial in improving growth in GDP and thus in the entire economy of the country.
1.5.2 Potential Investors
The focus of the study is on the influence of WCM on financial performance of the listed commercial and services firms in Kenya which should be crucial to potential investors in the firms because they are not only concerned with the profitability of the firm but also its ability to meet its daily financial obligations. The finding of this study will help potential investors in better understanding the commercial and services industry and how to manage WC in such a way that shareholders wealth increases.
1.5.3 Management of Listed Commercial and Services Firms
The management of the listed commercial and services firms in Kenya could use the recommendations of the study to guide them on how working capital if managed properly will boost profitability. The study findings are expected to be beneficial to the management and staff of the listed commercial and services firms who will gain insight on how they can successfully control their working capital to improve the financial performance of their firm. Management can hence formulate and oversee implementation of sound working capital management policies.

1.5.4 Capital Market Authority
The findings and recommendations of the study will provide crucial policy guidelines to the regulators who are the Capital Market Authority. The regulator can make use of the findings in establishing the modalities and regulatory measures that are needed to assist in improvement of the commercial and services industry.
1.5.5 Academicians and Future Researchers
The study findings are expected to add knowledge to the existing body of knowledge in the financial discipline in the commercial and services sector that will form basis for further research in the industry and effect of WCM on financial performance in other sectors as well. The study will also provide material for future researchers in the field of finance as they can develop a critique of the literature reviewed resulting to a research gap that their studies can focus on.
1.6 Scope of the StudyThe study will seeks to establish the effect of WCM on financial performance of listed commercial and services firms in Kenya. The study will specifically seek to establish the effect of average payment period average collection period, inventory conversion period, and cash conversion cycle on financial performance of listed commercial and services firms in Kenya. The commercial and services firms are important of the Kenyan economy as indicated by Kihooto, Omagwa, Wachira and Emojong (2016). From the foregoing, the financial performance of some of the listed commercial and services firms which is part of their overall performance has been deteriorating with the need to explore appropriate interventions growing now than ever. These firms are integral to the attainment of financial independence of other firms in different sectors of the country and also create employment opportunities thereby contributing to gross domestic product (GDP) and foreign exchange earnings. To increase their profitability, commercial and services firms should proficiently manage their working capital components in order to minimize costs and efficiency in their operations (Kihooto, Omagwa, Wachira ; Emojong, 2016). The study target population will be 12 commercial and services firms listed at NSE Kenya for the last 10 years between the year 2008 and 2017 so as to explore their working capital management. Secondary data will be obtained from the financial record that is from the audited Statement of Income and Expenditure, and Statement of financial position which contain data on profit after tax, revenue, current assets, current liabilities, account receivables, account payables, inventory, debt and fixed assets of these firms for the past ten years.
CHAPTER TWOLITERATURE REVIEW2.1 IntroductionThe chapter entails the literature review of the study; in this section, theories guiding the study are discussed. Studies done in the same area of study have been reviewed from books, journals, internet and other published sources. It further looks at the conceptual review whereby, relationships between variables that are used in this study to measure iTax system project are discussed. The critique of the reviewed literature, research gap and the chapter summary are also presented.
2.2 Theoretical Literature ReviewThe importance of theoretical review is to assist to institute the theories that already exist based on the study phenomenon. The study will be anchored on Agency Theory, Transaction Cost Economics, Theory Walker’s Three Propositions Theory and The Operating Cycle Theory.
2.2.1 Agency Theory
The proponents of the theory were Berle and Means (1932). The theory suggest that divergence of the of benefits between shareholders and managers of firms might result to agency conflicts. In any firm, the manger main duty is to ensure the firm they manage generates good returns to shareholders, hence increasing firms’ profit figures and cash flow. Pugliese et al., (2014) argues that agency costs or agency difficulties results because of deceitful agents’ behavior and because of the interests and decisions the firm manager that is not aligned with shareholders’ interests.

According to Dawar, (2014), agency problems can be minimized by splitting up of the approvals and monitoring of decisions from the initiation to implementation. Bosse, ; Phillips, (2016) argue that the ratification of the approvals and monitoring of decisions mirrored to reduction of the risks incurred in the business tasks such as such as ensuring high level of inventories that are outside the process cycle necessities, offering credit terms that are higher than product turnover and ensuring low payment terms that are not aligned to the market practices are accepted. The agency problems can also be minimized by reflecting on in a conventional management of accounts receivables.

This theory is relevant to this study as it helps to provide the information on managers’ monitoring mechanisms on how the manage to lower the level of accounts receivables requirements of the firms. The theory can be linked to average collection period as independent variable of this study as it reflects on credit policies of the listed commercial and services firms.

2.2.2 Transaction Cost Economics Theory
The theory was advanced by Hicks and Niehans (1983). The theory argues that firm’s decisions are made based on the costs involved in transaction. The theory in addressing this question indicates that the firms exist with a view of minimizing transaction costs of individual transactions that would take place in a market between a buyer and a seller (Maami, 2011). According to Emery ; Marques, (2011), the determination of optimum level of inventory should be based on costs and benefits associated between the trade-off and the levels of inventory. Some of the costs involved in holding the inventory are the ordering and carrying costs.

Kamuri, (2015) defined the ordering costs as costs related with acquirement of inventory, this includes the costs incurred in preparation of a purchase order, costs incurred in receipt, inspection, and recording the goods expected. The total costs incurred in maintaining of the inventory is known as carrying costs, the carrying costs will always increase due to the storing of inventory and opportunity costs. The level of motive of inventories depends on the business the company is involved in, cost motive is the most widely and simple motive used in managing the inventories and in most cases the cost motive associated to Transaction Cost Economics theory (Emery ; Marques, 2011).
The theory provides an understanding on the need to balance the inventory held based on the inventory costs available. According to Brigham ; Davis, (2010), when a firm use smaller level of inventory to support its sales, the quicker the total asset turnover and the return on total assets also become greater. Brigham ; Davis, (2010) argue that prompt the inventory turnover also helps to reduce the possible uselessness price concessions. The theory is relevant as it can be linked to independent variable inventory conversion period.

2.2.3 Walker’s Three Propositions Theory
The theory was developed by Walker (1964) when he studied working capital of the 9 industries in the year 1961. The study findings revealed that the association between working capital and rate of return was negative. Walker come up with three propositions, in his first proposition Walker revealed that the amount of working capital is fixed capital, firm risks change continuous while the gain or loss opportunities are increases. Walker (1964) asserted that firms can achieve the lowest possible risks by using the equity to finance working capital; this helps the firm to reduce its opportunities for high returns on equity since the advantage of leverage is not considered.

The second proposition posits that the type of capital used in financing the working capital directly affects both the amount of risks the company shoulders and the prospects for gain or loss. According to the second proposition, debt-equity ratio and the maturity period for debt affects the risk-return-tradeoff. Long periods for debt translated to lower risk since management would have adequate time to raise funds to meet debt obligations. But long-term debt is very costly, thus advanced the third proposition. The third scheme provides that the bigger the discrepancy between the developments of a firm’s debt mechanisms and its flow of internally produced funds, the superior the risk and vice-versa.
This theory is relevant to this study in explaining the importance of average payment period of a firm. According to the theory, corporate organization only holds its short-term marketable securities when it has excess funds after assembling short-term debt responsibilities. The theory advocates that current assets ought to expand to the point where marginal upsurge, in returns the assets would just equal the cost of capital required to finance such increases.
2.2.4 The Operating Cycle Theory
The operating cycle of the firm is a measure that is used to measure the duration of time taken from the firm receipting of raw materials to collection of cash after the selling of finished products. According to Mueller, (1972), the Operating Cycle theory is chiefly made up of two short-term asset categories, namely inventory and accounts receivable. The two ratios that is used to measure the operating cycle are average age of inventory and the average collection period.

According to Bhattacharya, (2009), when the firm policy favors the customers enjoy credit for longer period, the firm profit will likely go up but on other hand the firm is likely to encounter liquidity challenges since it might take firms long to convert their accounts receivable to cash. In this theory the accounts payables as a component of working capital is not included in the theory.

The theory is relevant to the study in explaining the connection between CCC and firm financial performance. According to the theory, the working capital of a firm can be improved by the firm holding the cash creditors longer without paying; this enables the firm to use the same capital to fund other current liabilities. Furthermore, the Cash Conversion Cycle (CCC) theory was developed to improve on the Operating Cycle theory due to failure of incorporate payables deferral period.

2.3 Conceptual FrameworkThe conceptual framework examined and explained the effect of WCM on financial performance of listed commercial and services firms in Kenya. The conceptual framework examined the independent and the dependent variable of the study.
Financial Performance
ROA
ROE
Inventory Conversion Period
Inventory turnover
Reorder time
Average Collection Period
Creditor days
Amount of receivables
Average Payment Period
Debtor days
Amount Payable
Cash Conversion Cycle
Operating cash flow
Bank collections
Financial Performance
ROA
ROE
Inventory Conversion Period
Inventory turnover
Reorder time
Average Collection Period
Creditor days
Amount of receivables
Average Payment Period
Debtor days
Amount Payable
Cash Conversion Cycle
Operating cash flow
Bank collections

Independent Variables Dependent variable
Figure 2.1: Conceptual Framework2.3.1 Average Collection Period (ACP)
According to Attari and Raza (2012), the ACP refers to duration of time taken by firm to sale on credit to the time the payment from the sale become usable to the firm. This involves managing the credit available to the firm’s customers, and then receiving, processing and collecting the customers payments. San & Heng, (2011) argue that firm effective management of credit and accounts receivable process can be achieved by having good credit standards. According to Mathuva, (2015), a tightened credit standard lowers the sales and profit by reducing the investment in accounts receivable while relaxed credit standards generally increases the sales and additional profits.

Michalski (2012) defined the accounts receivable as the amount of money that the firm receive after selling products or services. Enqvist, (2014) argued that a credit to a seller or service provider represents an investment in accounts receivable, the firm selling its output on credit it results to accounts receivable. According to Mathuva, (2015), the ratio between accounts receivable and average credit sales per day is equivalent to average collection period, this ratio is useful in measuring the length of time that taken to convert average sales into cash. This dimension helps to define the connection between accounts receivable and cash flow.

A higher investment in accounts receivable is as a result of longer average collection period, this is achieved that there is less cash is available to cover cash outflows (Mekonnen, 2011). According to Pandey (2014), there are three characteristics receivable that rise from trade credit, namely risk which should be analyzed careful; the second characteristic is the economic value to the buyer. The third characteristic implies futurity. According to Tokarski, et al., (2015), the cash payment for goods or services received by the buyer is made to a future period.
2.3.2 Inventory Conversion Period
According Gill, Biger and M?thur, (2012), firm inventory made up of, work in progress, stock of raw materials and finished goods. Large amount of investment is required to be invested in inventory because it’s a major component of working management capital. Majority of firms evade possible main losses in asset values and increase their profitability by struggling to maintain their optimal inventory levels (Brigham ; Davis, 2010). When a firm use smaller level of inventory to support its sales, the quicker the total asset turnover and the return on total assets also become greater. Brigham ; Davis, (2010) argue that prompt the inventory turnover also helps to reduce the possible uselessness price concessions.

According Mansoor and Muhammad, (2012), the average time needed to convert the raw materials into finished goods is called inventory conversion period. The inventory conversion period represents the efficiency of inventory management, normally calculated as inventory turnover ratio. Ruichao (2013) argued that when the low inventory turnover ratio is an indication of deprived sales or an excess amount of inventory. According to Brigham ; Davis, (2010), the organization’s non-current assets, permanent current assets and the fluctuating current assets beneath a conservative working capital financing policy are normally financed with permanent financing such as equity and long term debt.
In conservative financing policy there is less return to the company due to over reliance on short-term funding. The moderate policy is the most recommended policy as it between the two extremes. Ruichao, (2013) argued that permanent finance is used to finance the non-current assets and permanent current assets in a moderate working capital financing policy while short term debt are used to fund the fluctuating current assets.

2.3.3 Average Payment Period
Ahmad, Malik, Nadeem, and Hamad, (2014) argue that the average length of time taken by firm to purchase of labour and materials in cash is known as average payment period. Delaying bill payment in account payables has a critical role in managing working capital as it allows the firm to access to an inexpensive source of financing (GarciaTeruel & Martinez-Solano, 2007). Ruichao (2013) however argued that the business may be hurt if early payment discount are offered to due to opportunity cost of keeping high account payables.

According to Barak, and Modarres, (2015), the relationship between average payment period and profitability is positive, that is to say when the number of days accounts payable increase by 1 day it also results to increase in profitability. Some firms delay payments of accounts payable to suppliers so that they can access quality products, incur low cost and also to ensure flexible source of finance, in some instances delay payments can also be costly if a firm is offered a discount for the early payment (Naimulbari, 2012).

2.3.4 Cash Conversion Cycle (CCC)
Gill et al., 2012 defined CCC as the time taken for the actual cash expenditures of the firm to be paid for productive resources from the sale of products. The reduction of the inventory conversion period shortens the CCC and this can be achieved by processing and selling goods hastily. The CCC can also be shorten by decreasing the receivables period that can be achieved by speeding up collections from sales and lengthening payables (Vural, Sökmen & Çetenak, 2012).

Linh, and Mohanlingam, (2018) argued that when the association between CCC and firm profitability is negative, the CCC shortens without hurting without interfering with the operations, this improves profit because when the CCC are longer the need for external financing also increases thus more financing costs. Gill et al., (2012) argued that firms’ WCM affect both the profitability and liquidity, and there a strong negative correlation between profitability and CCC, thus decreasing in profitability of the firm manifest as a result of increase in cash conversion cycle (Linh et al., 2018).

2.3.5 Financial Performance of Listed Commercial and Services Firms
Financial performance has been well-defined as a degree of how well a firm uses its available resources in the generation of revenues. It reflects what has been achieved by the management in monetary terms over a specific duration and can be utilized in making comparison of like firms in the one industry. According to Ongeri (2014), financial performance provides an avenue for the evaluation of business activities in objective monetary terms. It shows how better investor is at the end of an accounting date than he was at the beginning and this can be ascertained by utilizing financial ratios derived from financial statements or using data on market share prices.
According to Maditinos, Chatzoudes, Tsairidis and Theriou (2011), the chief aim of the firm is to exploit the wealth of the shareholders and therefore performance measurement helps to evaluate how richer the shareholder becomes as a result of the investment decisions over a given period. The financial performance is measured using many different absolute and relative indicators such revenues, expenses, earnings before interest, the net income levels and tax (EBIT), ROE and ROA. However, most frequently used accounting based measures of performance include ROE and ROA (Dissanayake, ; Palihena, 2015).
The ROE measures return on the shareholders capital and is computed by dividing Net profit after Taxes by Total Equity capital. It also shows the profitability level of a company in relation to the total sum of the shareholders capital invested. On the other hand, ROA indicates the return on all assets of the company and is frequently used by firms as an overall index of financial performance. It is computed by dividing Net Income after Taxes divided by Total Assets (Khrawish, 2011). Various indicators have been used to measure the financial performance of the firms by various studies such as operating profit margin. As a result, ROA and ROE will be applied in measurement of the financial performance of the listed commercial and services firms.
2.4 Empirical Literature ReviewThe subdivision discusses past studies based on the objectives of the study. This review specifically evaluates past literatures related to determinants of successful implementation of tax administration projects with an aim of establishing areas of gaps for further research. In particular, the paper identifies studies conducted globally and locally to establish the effect of WCM on financial performance of listed commercial and services firms in Kenya from which research gaps will be identified.
2.4.1 Average Collection Period
A study by Padachi (2006) on WCM practices for the amongst the industrial firms in Mauritius by taking a sample of 58 small firms that used secondary data revealed that the relationship between profitability Mauritius industrial firms and average collection period was negative and insignificant.
Afza and Nazir (2009) study examined the affiliation between a firm’s profitability and receivables management policies. The study specifically examined the connection amid receivable management practices and performance. The 204 non-financial firms listed on Karachi Stock Exchange (KSE) were sampled. The study used secondary data and the method of analysis was secondary data. The study findings revealed a negative association between the profitability of firms and the receivables investment and financing policies.

A study by Waweru (2011) used secondary data to examine the relationship between receivables management and the value of companies quoted at the NSE. The study sampled 22 companies listed on the NSE. The regression analysis results revealed that there was anegative relationship between average cash collection period and the value of the firm. However, some receivables management practices showed indifferent findings.

2.4.2 Inventory Conversion Period
A study by Nteere (2014) examined the effect of WCM on the profitability of the hotel industry in Kenya. The study specifically sought to establish the effect of Cash Conversion Cycle and day’s inventory outstanding on the hotel industry profitability in Kenya. Secondary data on a sample of four five star hotel in Nairobi out of the targeted population of seven were used, the period under study was between the year 2009 to 2013. The study findings established that the association between the Cash Conversion Cycle, day’s inventory outstanding and profitability was found to be statistically insignificant. Macharia (2012) study examined the profitability of manufacturing companies in Kenya, the study collected secondary data on average collection period, inventory turnover in days, average payment period and current ratio from the annual financial records. The study findings revealed that inventory conversion and profitability of the manufacturing companies in Kenya was positively and significantly related.

Luchinga (2014) study examined the how inventory turnover, net payment period and cash conversion period were related with the profitability of agricultural firms listed in NSE. The descriptive and quantitative research designs were used. The study findings revealed that there was a negative relationship between inventory turnover in days, cash conversion period and net payment period, implying that a company’s financial performance can be increased by reducing inventory in days.

2.4.3 Average Payment Period
A study by Kithii (2008) studied the association between WCM and profitability of listed firms listed at NSE, Kenya. The secondary data obtained from annual reports was used for a period of six (6) years from 2001 – 2006. Secondary data was collected and analyzed using a regression and correlation analysis. The study findings revealed a positive and significant association between firm profitability and average payment period.

Gakure, Cheluget, Onyango and Keraro (2012) conducted a study on 15 manufacturing firms listed at NSE to determine the effect of accounts collection period, average payment period, inventory holding period on the profitability of manufacturing firms. The study findings revealed that average payment period, inventory holding period and profitability had negative relationship. The study findings also revealed that cash conversion cycle relation with profitability was positive. In Pakistan, study findings by Gul, ; Khan (2013) that examined the effects of working capital management on profitability of the SMEs revealed that profitability and average payment period of the SMEs in Pakistan had a positive and significant relationship.

2.4.4 Cash Conversion Cycle
A study Lazaridis and Tryfonidis (2006) examined WCM of the firms listed in Athens Stock Exchange. The study used secondary data collected for the periods between 2001 and 2004. The study findings revealed that the gross operating profit and the cash conversion cycle of the firms listed in Athens Stock Exchange had a positive and significant relationship.

Gill, Biger and Mathur (2010) study working capital management focused on the USA manufacturing firms. The study used secondary data that was collected from the annual financial records. The sample size was 30 firms listed at NSE for the periods 1993 to 2008. The results of the study revealed that cash conversion cycle and profitability of manufacturing firms was positively and significantly related. Yazdanfar et al., (2014) studied the impact of CCC on the financial performance in Swedish SMEs. The secondary data was used. The study used a multiple linear regression model. The study findings revealed that cash conversion cycle significantly affects profitability of Swedish SMEs. A study by Upadhyay, Sen and Smith (2015) sought to establish the effect of cash conversion cycle and profitability of hospitals in Washington. The main objective was to establish the association between the CCC and profitability of hospitals for the State of Washington. The study used secondary data. Panel data analysis was conducted whereby a fixed effect regression was adopted. The findings revealed a significant association between the CCC and profitability of hospitals in Washington DC.

2.5 Critique of the Existing Literature
The findings from the literatures so far reviewed have shown a mixture of positive and negative association between the constituents of WCM and the various indicators profitability of financial performance such as ROE, ROA and growth in sales) of firms from different countries. For instance, Waweru (2011) sought to assess the link between receivables management and the value of companies quoted at the NSE and found a negative association between the value of the firm and average cash collection period while the study by Padachi (2006) on WCM practices for the Mauritius manufacturing firms revealed a positive relationship between profitability and average collection period. On the same note, Macharia (2012) study in Kenya on the association between profitability and WCM of manufacturing companies revealed that there a positive significant relationship between profitability and inventory conversion period while Nteere (2014) study in the hotel industry in Kenya examined the effect of WCM on profitability and revealed that the CCC, day’s inventory outstanding and profitability are statistically insignificantly related.

From the reviewed literature and their findings, it is clear that most of the researches were conducted using the variables which were tested severally against single dependent variable at different times and results were inferred to the general financial performance of the firms. Additionally, some of the studies tested the effect of single working capital management practices such as ACP, ICP, APP and CCC on financial performance. These studies therefore used a different conceptual framework from the current one that will establish the effect of ACP, ICP, APP and CCC on financial performance of listed commercial and services firms. The studies by Afza and Nazir (2009) on the association between receivables management policies and a firm’s profitability.2.6 Research GapsThe literature reviewed has indicated conceptual, contextual and methodological research gaps that this study will aim to address. There is a conceptual research gap in the study by Afza and Nazir (2009) wwho studied the effect of receivables management policies on firm’s profitability; Yazdanfar et al., (2014) on the impact of CCC on the financial performance and Linh et al., (2018) study on the influence of CCC on firm profitability have all used different conceptual frameworks as they used single independent variable of WCM while the current study will combine all the WCM to assess their influence on financial performance of commercial and services firms in Kenya.
Additionally, there was a contextual research gap in the studies by Padachi (2006) on WCM practices for the manufacturing firms in Mauritius; Gul et al., (2013) on the influence of WCM on performance of the SMEs in Pakistan; Gill et al. (2010) on relationship between WCM and profitability for manufacturing firms in USA; Lazaridis et al. (2006) on the relationship between WCM and corporate profitability for the firms listed in Athens and Yazdanfar and Öhman (2014) on the impact of CCC on profitability of Swedish SMEs. The studies were conducted outside the Kenyan context with different economic conditions. This makes it inappropriate to generalize the findings of these results regarding the influence of working capital management on financial performance of the listed commercial and services firms in Kenya.
2.7 Chapter summary of the Literature ReviewedWorking capital management as put forward by many scholars is aimed at enhancing the financial position of any business organization. It is considered as the life wire of any business and so, its proper management is critical for the survival of the business. From the literature reviewed, it has been noted that management of most of the constituents of the WC such as cash conversion cycle, average collection period, inventory conversion period, and average payment period contribute to the financial performance such as ROE, ROA and profitability of an organization. However, if the WCM is not properly handled, the financial performance of the firm could be adversely affected. This chapter also examined the various theories underlying the concept of working capital management such as: Agency Theory, Transaction Cost Economics Theory, Walker’s Three Propositions Theory and The Operating Cycle Theory.
CHAPTER THREERESEARCH METHODOLOGY3.1 IntroductionThis chapter reviews the research design, target population, sampling frame, sampling technique, data collection instruments and procedures as well as analysis of data.
3.2 Research DesignAccording to Weber (2017), research design refers to the organization of conditions for collection and data analysis for the purpose of merging study relevance to the prevailing economic conditions. This study will adopt a descriptive survey research where variables are described by a set of methods and procedures. The choice of this research design is guided by the need to establish a cause effect relationship between the study variables. The research design is suitable in answering the what, which and how research questions which are similar to what this study seeks to answer hence its suitable. A descriptive research design is also suitable because it will enable a survey to be conducted on all the 12 listed firms under the commercial and services sector.
3.3 Target PopulationAccording to Lindner et al., (2001), population is a cluster of individuals, objects or things that have common attributes and existing in space at a particular point of time. Araoye, (2003) defined target population as a population that the researcher uses to get generalize results. The study will focus on the 12 commercial and services firms listed at NSE over the period 2008-2017. The choice of the unit of analysis is justified on the basis that these firms are integral to the attainment of financial independence of other firms in different sectors of the country, create more employment opportunities thereby contributing to GDP and foreign exchange earnings and have lately attracted much attention and interest from the general public, financial experts, researchers and their management regarding their declining financial performance.
3.4 Sampling and Sampling technique
3.4.1 Sampling frame
The sampling frame is a list of elements from which the sample is obtained (Khalid, Abdullah, ; Kumar, 2012). The study sampling frame will comprise a list of the 12 commercial and services firms listed at NSE for the period 2008-2017. The sampling frame is presented as appendix IV. However, no sampling will be adopted since the study will conduct a census.
3.4.2 Sampling Technique and Sample Size
According to Weber, (2017), sampling is the collection of individual observations from the population of the study particularly for the purpose of statistical inference while a sample a subgroup of a specific population. Carryout sampling is important as it helps to reduce the costs and time of doing research, mostly when it is impossible to study the total population. This study will use a census especially because the population of 12 commercial and services firms listed at NSE is small therefore rules out application of specific sampling techniques. The use of census survey allows complete collection of the information of participants in the population thus provides a true measure of the population which is devoid of a sampling error.
3.5 Data Collection InstrumentsThis study will specifically use secondary data on obtained from comprehensive financial reports containing fixed assets, profit after tax, current assets, current liabilities and long-term debt and equity. Financial reports from the selected firms will be obtained from Nairobi Securities Exchange library, Capital Markets Authority library and from the website of the 12 commercial and service firms listed at NSE, Kenya for the period 2008-2017. The data that will be used in this study will be quantitatively generated from the audited annual financial statements of the five 12 listed firms covering a period of 10 years (2008- 2017) by the use of a secondary data collection sheet (Appendix I). This method of data collection will be adopted because it befits the research design which requires the use of past and documented facts as basis for performance evaluation.
3.6 Data Collection ProcedureThe data that will be used in the study will be secondary data collected from the NSE handbooks for the period between the year 2008 and year 2017 and the published financial records for the firm. The study will use quantitative data that will be generated from the audited annual financial statements of the five 12 listed firms covering a period of ten years (2008- 2017) by the use of a secondary data collection sheet
3.7 Data Analysis and PresentationCooper ; Schindler, (2008) defined data analysis as the process of describing, combining and making references based on numbers. This study intends to establish the relation between WCM and financial performance of listed commercial and services firms in Kenya. The study will used panel data methodology since the data to be analyzed is time series in nature. The advantage of panel data is that different companies are assumed to be heterogeneous in nature, hence data collected provides varied information that ensures efficient analysis using panel data methodology (Baltagi, 2001).

The data analysis is the study of how to describe, combine and make references based on numbers (Cooper ; Schindler, 2008). The key purpose for this study will be to establish the association between WCM and financial performance of listed commercial and services firms in Kenya. Given the time series nature of the data for this study, panel data methodology will be used. The advantage of panel data is that it assumes that different companies are heterogeneous in nature, it equally considers the variability in the data, and it helps to provide more instructive data, and hence panel data provides more efficiency than when the cross-sectional data methodology is used (Baltagi, 2001). The panel data utilizes observations that carry both cross-sectional and time series dimensions.
The study will used both descriptive and inferential statistical techniques to analyse the data collected. Descriptive statistics will be used for quantitative data analysis which enables the researcher to describe distribution of scores and measurements (Mugenda ; Mugenda, 2003). The descriptive statistics will include mean, percentages and standard deviation to assess the spread of the variables among the studied firms. The inferential statistics will include the correlation and regression analysis and this will be used to determine the association between the independent variables on the dependent variable of the study. The Statistical Package for Social Science will be used to produce the output for data analysis. Pearson correlation coefficient will be used to test the strength and direction of association among the study variables.
The working capital management which is independent variables includes ACP, ICP, APP and CCC while the dependent variables are Sales, ROA and ROE. The study will use a multiple linear regression model to test the study objectives. The multiple linear regression model is as laid below:
Y = ?0+ ?1ACPit+ ?2ICPit + ?3APPit + ?4CCCit + ?it
Where;
Y= Financial Performance of listed commercial and services firms (ROA, ROE, Sales)
?0= Constant
?1= Average collection period
?2= Inventory conversion period
?3=Average payment period
?4= Cash Conversion Cycle
? = Error term;
?1…?4= regression coefficient of four variables.

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Appendix I: Secondary Data Collection Sheet
NAME OF THE FIRM:
Year/Indicator ROA ROE Sales ACP ICP APP CCC
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Appendix II: Work Schedule7029457937400 Duration
11239422161500Activity 1st Month 2nd Month 3rd Month 4th Month 5th Month 6th Month
Literature review
Proposal preparation
Data Collection
Data analysis
Thesis writing
Publications
Project defense
Appendix III: Budget EstimatesITEMS AMOUNT (estimates)
Photocopying, Printing and Binding 10000/=
Communication and Internet services 6,000/=
Data Collection 5,000/=
Stationery and Equipment 5,000/=
Research Assistant’s fees 30,000/=
Miscellaneous expenses 6,000/=
TOTAL KShs 62,000/=
Appendix IV: List of Commercial and Services Firms listed at NSE1 Atlas Development and Support Services
2 Deacons (East Africa) Plc Ord
3 Express Ltd Ord
4 Kenya Airways Ltd
5 Longhorn Publishers Ltd
6 Nairobi Business Ventures Ltd
7 Nation Media Group
8 Sameer Africa PLC Ord
9 Scangroup Ltd Ord
10 Standard Group Ltd
11 TPS Eastern Africa (Serena) Ltd Ord
12 Uchumi Supermarket Ltd Ord
Source: NSE, 2018

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