Influence of Liquidity Management on Financial Performance of Agricultural Firms Listed in Nairobi Securities

Abstract

The objective of this study was to determine the influence of liquidity management on the financial performance of agricultural firms listed on Nairobi Securities Exchange. A descriptive survey research design was applied. A Census of all the 6 companies listed at Nairobi Securities Exchange as at July 2014 to July 2019 constituted the study population. The study employed secondary data extracted from audited financial statements and individual companies annual report for the five year period covering July 2014 to July 2019. Record survey sheet was used when collecting data for independent and dependent variables. Data collected was analyzed by using descriptive and inferential statistics. Under descriptive statistics the study considered; Mean, Minimum, Maximum and Standard deviation. For inferential statistics the study considered correlation and multiple regression. Statistical Package of Social Science (SPSS) software program was applied in the analysis of the study with respect to the objectives of the study. The study found out that liquidity management has a positive significant effect on financial performance. The liquidity management has positive relationship with the Return on Investment (ROA)of the firms under study. The study recommended that agricultural firms listed on NSE should adopt prudent liquidity management as it influence financial performance.