EFFECT OF AVERAGE ACCOUNT RECEIVABLES ON PROFITABILITY OF PRIVATE SECURITY FIRMS IN KISUMU COUNTY, KENYA

Autori

  • Jackline Nyawira Mwangi MBA Graduate, Department of Accounting and Finance, Maseno University, Maseno, Kenya
  • Ondiwa Simon Oluoch Lecturer, Dr., Department of Accounting and Finance, Maseno University, Maseno, Kenya

DOI:

https://doi.org/10.46827/ejefr.v9i1.1947

Ključne reči:

working capital management, average accounts receivable, return on assets, profitability

Apstrakt

In today's dynamic business environment, efficient working capital management is a critical factor in sustaining and enhancing profitability, managing risk, and maximizing firm value. While companies strive to align their strategies with growth objectives and annual profitability, inadequate liquidity can hinder their ability to generate returns for shareholders. Therefore, adopting effective working capital management practices is essential. Despite the significance of working capital management, there is a gap in understanding its impact on the profitability of private security firms in emerging economies like Kenya. This study aimed to examine the effect of working capital management on the profitability of private security firms in Kisumu County, Kenya, for the period 2019–2023. Specifically, it assessed the impact of the average accounts receivable period on profitability. A correlational research design was employed, focusing on private security firms registered with the Private Security Regulatory Authority in Kisumu County. The study relied on secondary data obtained from financial statements, using Return on Assets (ROA) as a measure of profitability. The results indicated that the average accounts receivable period had a statistically significant positive effect on profitability (β1 = 2.012, t = 3.181, p = 0.04 < 0.05). These findings are valuable to private security firm managers, scholars, and policymakers, including government entities, as they provide insights into the role of working capital management in enhancing financial performance.

JEL: G31, L84, M41

 

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Biografije autora

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    Jackline Nyawira Mwangi is an MBA graduate from Maseno University, Kenya, with a specialization in Finance. She holds a bachelor’s degree in commerce and has a growing interest in financial management, corporate governance, and SME performance in emerging economies. Her current research interests include working capital management, profitability analysis, and financial strategy for service-based industries. She has actively participated and presented abstracts in various conferences and workshops focused on financial inclusion and enterprise growth in Sub-Saharan Africa. 

    ORCID: https://orcid.org/0009-0009-7190-1117

  • {$ime} {$affilijacija}

    Dr. Ondiwa Simon Oluoch is an MSME consultant, and he is currently working with DT Global International Development EA Limited. Previously, he worked as an adjunct lecturer in the School of Business and Economics at Maseno University in Kenya. He holds a PhD in Business Administration, a Finance Major, an MBA, a Finance Major and a Bachelor of Business Administration Finance. His research interest is the operations of financial institutions and markets.

    ORCID: https://orcid.org/0000-0002-0521-5321

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Preuzimanja

Objavljeno

2025-05-18

Broj časopisa

God. 9 Br. 1 (2025)

Rubrika

Articles