Influence of Short Term Financing on Profitability of Supermarkets in Central Business District Nairobi City Kenya

Stephen Kimani, Kiarie and Dr. Clement O., Olando (2021) Influence of Short Term Financing on Profitability of Supermarkets in Central Business District Nairobi City Kenya. International Journal of Trend in Scientific Research and Development, 5 (6). pp. 479-488. ISSN 2456-6470

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Abstract

The study the examined influence of short term financing on profitability of supermarkets in central business district Nairobi city Kenya. The theoretic appraisal that guided this study was the Cash Conversion Cycle hypothesis. The investigation used descriptive research design. Targetpopulationwas36 outlet managers and bookkeepers of 18 super market outlets in central business district Nairobi city. The study used census methodology. Primary statistics was gathered utilizing questionnaires and secondary statistics was extricated from fiscal reports. Data was analyzed using descriptive statistics like frequencies, percentages, means and standard deviation and data was advance inform of figures, tables and charts. Inferential statistics was prepared using Pearson correlation coefficient and multiple regression in order to inaugurate the relations between short term financing and profitability. The study found that bank overdraft is utilized as a source for short term financing, working capital loans are used to finance daily operations and trade credit as the main source for operating capital in the supermarkets. The results revealed a positive and significant relationship between short term financing and profitability of supermarkets in central business district Nairobi city. The study concluded that short term financing had a significant positive effect on profitability of supermarkets in central business district Nairobi city. Study recommended that supermarkets management should utilize additional trade credit, bank overdraft and working capital loans that will guarantee an expansion in profitability and without endangering the supermarkets to risks related with short term financing. Further recommended that to develop the profitability of the supermarkets the management should focus on factoring, accounts receivable funding, hedging policy as source of short term financing and reducing the cash conversion cycle. Finally the government should offer financial support through credit guarantee schemes and capital grant.

Item Type:	Article
Subjects:	H Social Sciences > HG Finance
Divisions:	Postgraduate > Master's of Islamic Education
Depositing User:	Journal Editor
Date Deposited:	07 Sep 2022 16:49
Last Modified:	07 Sep 2022 16:49
URI:	http://eprints.umsida.ac.id/id/eprint/10338

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