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Research Paper | Financial Engineering | Kenya | Volume 3 Issue 4, April 2014 | Popularity: 7.1 / 10

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Effect of Aggressive Financing Policy on Profitability of Listed Companies at the Nairobi Securities Exchange, Kenya

Magadi S. Oloo, Muturi W. Mwangi

Abstract: Working capital financing is one of the pertinent issues in working capital management; it impacts both on the liquidity and profitability of firms. The objective of this study was to determine the effect of aggressive financing policy on the profitability of Kenyan companies listed at the Nairobi Stock Exchange (NSE). Even though a number of studies about working capital have been carried out in Kenya, the impact of aggressive policy on profitability is not explicit. This research therefore aimed to determine how aggressive financing policy affects profitability of Kenyan Listed firms. The study employed descriptive research design and survey research method. The population comprised of the financial managers of 38 companies listed at the Nairobi stock Exchange. A census method was employed whereby the sample was equal to the target population. Both primary and secondary data was collected and processed using SPSS Version 21. According to the findings obtained from inferential statistics aggressive financing policy had a positive effect on the profitability of listed firms. The study therefore recommends that Kenyan listed firms should embrace aggressive financing policy in order to improve their profitability.

Keywords: Aggressive Financing Policy, Profitability, Working Capital Management, Corporate Finance and Liquidity

Edition: Volume 3 Issue 4, April 2014

Pages: 444 - 448

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