Influence of Aggressiveness and Conservativeness in Investing and Financing Policies on Performance of Industrial Firms in Kenya

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Abstract

Working capital level determines whether a firm is aggressive or conservative in its operations. Aggressiveness in application of working capital management brings about improved financial performance but at the same time increases the level of risk. The paper looks at the influence of working level on performance in the industrial firms in Kenya.A sample was determined through stratified sampling method in order to include all different types of industries in Kenya. A questionnaire was used to collect data from chief Finance Officers of industrial firms in Kenya. Both descriptive and inferential analyses were done. Analysis of Variance (ANOVA) and regression analysis were used to test the hypothesis. The results show that there is a positive relationship between performance and working capital levels inindustrial firms in Kenya (0.544). Working Capital Levels explain 29.6% of the performance in the industrial firms in Kenya. 60.4% of the variation in performance is explained by other factors. The findings of the study revealed that the finance managers are cautious in the use of working capital items. They apply moderate financing and investment strategies.Therefore, we recommend the finance managers to be trained on issues of better utilization of working capital items for improved performance.

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Influence of Aggressiveness and Conservativeness in Investing and Financing Policies on Performance of Industrial Firms in Kenya

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