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. Stephen Kimani Kiarie | Dr. Clement O. Olando "Influence of Short Term Financing on Profitability of Supermarkets in Central Business District Nairobi City Kenya" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-5 | Issue-6 , October 2021, URL: https://www.ijtsrd.com/papers/ijtsrd46430.pdf Paper URL : https://www.ijtsrd.com/management/accounting-and-finance/46430/influence-of-short-term-financing-on-profitability-of-supermarkets-in-central-business-district-nairobi-city-kenya/stephen-kimani-kiarie
International Journal of Trend in Scientific Research and Development (IJTSRD)
Volume 5 Issue 6, September-October 2021 Available Online: www.ijtsrd.com e-ISSN: 2456 – 6470
@ IJTSRD | Unique Paper ID – IJTSRD46430 | Volume – 5 | Issue – 6 | Sep-Oct 2021
Page 479
Influence of Short Term Financing on Profitability of
Supermarkets in Central Business District Nairobi City Kenya
Stephen Kimani Kiarie
1
, Dr. Clement O. Olando PhD2
1MBA Student, 2Senior Lecturer,
1,2School of Business and Economics, Mount Kenya University, Nairobi, Kenya
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 ci