Influence Of Working Capital Management On Financial Distress In Hospitality Industry (A Study Of Four And Five Star Hotels In Nairobi County)
Journal Title: IOSR Journal of Economics and Finance (IOSR-JEF) - Year 2018, Vol 9, Issue 3
Abstract
The objective of this study was to determine influence of working capital management on financial distress in hospitality industry. More specifically the study determined the influence of cash conversion cycle on financial distress in hospitality industry. Theory used in this study was Entropy Theory. Descriptive survey research design was adopted in the study. The targeted population composed of 100 hotels in Nairobi. The study targeted all the financial managers in all the hotels. The study used a simple random sampling method to select 50 hotels whose financial officers served as the study respondents. Data collection was done through use of questionnaires. Questionnaire was tested for validity and reliability. The collected data was analyzed using statistical package for social sciences. Data was analyzed using descriptive statistics which included frequency, percentages, mean and standard deviation and inferential statistics which included regression and correlation analysis and was presented in tables and figures. Findings from the study concluded that cash conversion cycle, inventory level, accounts receivables and current liabilities were insignificant to financial distress management in hospitality industries. Further, it was recommended that firms should adopt debt financing because debt financing is relatively cheaper compared to equity financing hence increase in return on equity.
Authors and Affiliations
Florence Onyango, Solomon Ngahu
Keywords
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- EP ID EP414839
- DOI 10.9790/5933-0903025259.
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