Effect Of Trade Receivables On Profitability Of Manufacturing And Allied Firms Listed At Nairobi Securities Exchange

Adembo, Carden; Adembo, Carden

dc.creator	Adembo, Carden
dc.creator	Adembo, Carden
dc.date	2015-02-10T13:57:09Z
dc.date	2015-02-10T13:57:09Z
dc.date	2015-02-10
dc.date.accessioned	2017-03-19T20:43:01Z
dc.date.available	2017-03-19T20:43:01Z
dc.identifier	http://ezproxy.kca.ac.ke:8010/xmlui/handle/123456789/125
dc.identifier.uri	http://41.89.49.13:8080/xmlui/handle/123456789/746
dc.description	School Of Business and Public Management at KCA University
dc.description	The three main ways of financing 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 25 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 five 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 25 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.
dc.language	en
dc.subject	Profitability, Average Collection Period, Cash Conversion Cycle, Accounts Receivables Turnover.
dc.subject	Profitability, Average Collection Period, Cash Conversion Cycle, Accounts Receivables Turnover.
dc.title	Effect Of Trade Receivables On Profitability Of Manufacturing And Allied Firms Listed At Nairobi Securities Exchange
dc.type	Thesis