FINANCIAL STRUCTURE MANAGEMENT AND PERFORMANCE OF MANUFACTURING FIRMS LISTED AT THE NAIROBI SECURITIES EXCHANGE, KENYA
FINANCIAL STRUCTURE MANAGEMENT AND PERFORMANCE OF MANUFACTURING FIRMS LISTED AT THE NAIROBI SECURITIES EXCHANGE, KENYA
George Odhiambo Ogono - Master’s Student, Department of Business Administration and Entrepreneurship. School of Business and Management Studies, The Technical University of Kenya, Kenya
Dr. Jared Abong’o - Department of Accounting and Finance, School of Business and Management Studies, The Technical University of Kenya, Kenya
Dr. Pamela Mreji - Department of Business Management and Entrepreneurship, School of Business and Management Studies, The Technical University of Kenya, Kenya
ABSTRACT
This study aimed to establish the effects of Financial Structure Management on the Performance of Manufacturing Firms Listed in the Nairobi Securities Exchange. Data for the same was extracted from the audited financial reports of the nine manufacturing firms listed in the Nairobi Securities Exchange for ten years, spanning 2013 to 2022. Return on Assets (ROA) was employed as a measure of performance while Short Term Debt Management, Long Term Debt Management, and Equity Management as the financial structure management variables. The moderating variable applied was inflation, measured by annual average inflation rates (from the Central Bank of Kenya). A descriptive research design was applied in this study with secondary data extracted from the audited financials of the nine manufacturing firms. Data analysis techniques such as Correlation and Linear Regression Analysis were applied using Microsoft Excel. Data presentation was in analysis tables. The study concluded that there is a significant correlation between the management of financial structures and the performance of manufacturing firms listed on the Nairobi Securities Exchange. Changes in short-term, long-term, and equity in these firms' financial structures account for 26% of all changes in their financial performance. The study recommended that finance managers reduce debt levels in their financial structure, as it found a negative correlation between debt and performance.
