EVALUATION OF THE NEXUS BETWEEN REVENUE VOLATILITY FROM COMMODITY SALES AND FINANCIAL PERFORMANCE OF MANUFACTURING COMPANIES IN KENYA
Ndung’u Stephen Kanini - Kabarak University, Kenya
Dr. Kibati Patrick - Kabarak University, Kenya
Dr. Muhanji Stella - Kabarak University, Kenya
ABSTRACT
The researchers sought to evaluate the impact of revenue volatility on the financial performance of the manufacturing companies in Kenya given the anecdotal arguments that point to both positive and negative relationships. Revenue volatility was measured using the coefficient of variation of sales while financial performance was measured using earnings before interest and tax (EBIT) and return on assets (ROA). The data was analysed using long run and dynamic panel data models and appropriate specification tests used. The researchers came to the conclusion that revenue volatility has a negative and significant impact on the financial performance and should be of particular concern for manufacturing entities in Kenya.
