CASH MANAGEMENT AND FINANCIAL PERFORMANCE OF LISTED AGRICULTURAL COMPANIES IN KENYA
CASH MANAGEMENT AND FINANCIAL PERFORMANCE OF LISTED AGRICULTURAL COMPANIES IN KENYA
Mwamba Dennis
Dr. Maina Justus
Dr. Wanjau Boniface
ABSTRACT
This study examined the effect of cash management on the financial performance of agricultural companies listed on the Nairobi Securities Exchange (NSE). The study was grounded in the Miller–Orr Model of cash management and adopted a longitudinal panel research design. The target population comprised six agricultural companies listed on the NSE, all of which were included through a census approach. Secondary data was extracted from audited financial statements for the period 2021–2025, using a structured data collection sheet. Data was analyzed using descriptive statistics, including mean and standard deviation, and a fixed-effects regression model. The results revealed that cash management had a positive but statistically insignificant effect on the financial performance of agricultural companies listed on the NSE (β = 0.000688, p = 0.1059 > 0.05). The study recommended adoption of a dynamic cash allocation strategy that ensures investment of excess cash in short-term productive investments. It further recommended strengthening of cash flow forecasting taking into account seasonal productions, expected timing of cash receipts and settlement of obligations, so as to maintain enough liquidity for operational needs, and at the same time minimizing idle cash.
