FIRM STABILITY AND FINANCIAL PERFORMANCE AMONG PUBLIC SUGAR MANUFACTURING COMPANIES IN KENYA
Abstract
The goal of this study was explore how firm stability affects sugar companies' financial performance. The study was supported by Modigliani-Miller, Trade-off, and Pecking Order Theorems. The population of interest consisted of three public sugar manufacturing companies as the unit of analysis. Linear regression models were utilized for data analysis: The results indicated; The study performance among public sugar manufacturing companies in Kenya, (r=0.673; P<0.000). The R2 value was 0.453 and this implied that a unit increase in leverage leads to 45.3% enhancement in performance among public sugar manufacturing companies. A statistically significant relationship between liquidity control and financial performance among public sugar manufacturing companies in Kenya, (r=0.746; P<0.000). The R2 value was 0.557 and this implied that a unit increase in liquidity control leads to 55.7% enhancement in performance among public sugar manufacturing companies. A statistically significant relationship between credit risk management and financial performance among public sugar manufacturing companies in Kenya, (r=0.643; P<0.000). The R2 value was 0.413 and this implied that a unit increase in credit risk management leads to 41.1% enhancement in performance among public sugar manufacturing companies. And statistically significant relationship between economic resource utilization and financial performance among public sugar manufacturing companies in Kenya, (r=0.484; P<0.000). The R2 value was 0.235 and this implied that a unit increase in economic resource utilization leads to 23.5% enhancement in performance among public sugar manufacturing companies. The study concluded that; Leverage significantly and positively affects financial performance among public sugar manufacturing companies in Kenya. Liquidity control significantly and positively affects financial performance among Public sugar manufacturing companies in Kenya. Credit risk management positively and significantly affects financial performance among Public sugar manufacturing companies in Kenya. Economic resource utilization positively and significantly affects financial performance among Public sugar manufacturing companies in Kenya. Public sugar manufacturing companies not listed at the Nairobi stock exchange should works towards being listed in the stock market to enhance their equity funding and general leverage, liquidity control, risk aversion and economic utilization of resources.
Key Words: Leverage, Liquidity Control, Credit Risk Management, Economic Resource Utilization
CITATION: Tonui, M. C., & Jagongo, A. (2023). Firm stability and financial performance among public sugar manufacturing companies in Kenya. The Strategic Journal of Business & Change Management, 10 (2), 446–461.
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DOI: http://dx.doi.org/10.61426/sjbcm.v10i2.2616
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