INFLUENCE OF LIQUIDITY ON PERFORMANCE OF QUOTED COMPANIES IN THE NAIROBI SECURITIES EXCHANGE, KENYA
Abstract
The objective of this study was to determine the influence of liquidity on the performance of firms listed in the Nairobi Securities Exchange. The study was guided by Shiftability theory. The study adopted descriptive survey design. The study targeted 62 firms listed on Nairobi Securities Exchange as of 2017. The study utilized purposive sampling method therefore; the sample size was 48 listed firms. The study utilized secondary data that was collected from the NSE handbook between 2013 and 2017. The quantitative data collected was analyzed using descriptive and inferential statistics. Descriptive statistics comprised of maximum, minimum, standard deviation, mean and standard error while inferential statistics comprised of correlation and linear regression analysis. The data were subjected to diagnostic test such as linearity, normality, multi-collinearity, homoscedasticity and auto-correlation. There was a significant influence of liquidity on performance of quoted companies at the securities exchange in Nairobi, Kenya. The study recommended that there should be a continued monitoring of the cash balances and other liquid assets by financial managers and other regulatory agencies. This would ensure that proper levels of liquidity are maintained since the higher the liquidity the better the operations, as a result, there would be high performance. Listed firms in Kenya must strive to maintain proper levels of liquidity as lack of liquidity may bring about failure of meeting their cash obligation.
Key Words: Liquidity, Performance of Quoted Companies
CITATION: Munzala, B. K., & Maniagi M. (2020). Influence of liquidity on performance of quoted companies in the Nairobi Securities Exchange, Kenya. The Strategic Journal of Business & Change Management, 7(3), 998 – 1007.
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DOI: http://dx.doi.org/10.61426/sjbcm.v7i3.1722
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