Effects of Receivables Management Practises on Financial Performance of Private TVET Institutions in Eldoret Town, Kenya
Journal Title: IOSR journal of Business and Management - Year 2018, Vol 20, Issue 7
Abstract
Virtually all higher educational institutions are afflicted by poor financial performance due to the uniqueness in the management of working capital which involves more of accounts payables and receivables than any other working capital management practises. Due to prevailing economic conditions, these middle level institutions are financially weakened by the decline in admissions, a problem that is further compounded by lack of established working capital management policies which expose them to delinquency risks of slow fee payment and defaults which consequently affects their financial performance. Thus, the study sought to investigate the effects of receivable management practices on financial performance of private TVET institution in Eldoret town in Kenya. The study was informed by stakeholder and agency theories and guided by descriptive research design in that the method was best suited as it gave an exhaustive analysis of the situation while reporting the way things are with regard to the possible behaviour, attitude, values and characteristics. The study adopted the census technique because of the fewer numbers of middle level colleges and employed a random sampling technique to target the 86 respondents who held the position of financial managers/owner and the accountants from the 43 Middle level colleges registered by the ministry of education at Eldoret Town. The researcher used structured questionnaires and documentary analysis to collect primary data from the accountants and Managers of the Colleges. The data collected were analysed using descriptive and inferential statistics to determine and to estimate the causal relationships between the financial performance variable (dependent variable) and the Receivable management variable (independent variables). Results from the analysis showed that these institutions have focused on working capital management practises on accounts receivables. The operating margin significantly correlated accounts receivable(r = -0.522) while the margins are particularly influenced by cash conversion cycle and accounts receivables. The findings show that the institutions are able to efficiently handle working capital by improving on the cash management techniques and largely implementing efficient accounts receivable practises.
Authors and Affiliations
Mr. Yator Paul
Keywords
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- EP ID EP412136
- DOI 10.9790/487X-2007041319.
- Views 62
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