ABSTRACT:- The general objective of this study was to establish the effect of cash management in the performance of commercial banks in Mogadishu, Somalia. Specifically, this study investigated the effects of capital adequacy, Liquidity Management, receivables management and payables management on cash management in the performance of commercial banks in Mogadishu, Somalia. The goal of the cash management function brought out the basic responsibilities of the cash manager, which, broadly speaking, take up planning, monitoring and controlling of the cash flows and the cash position of a company, while maintaining its liquidity. This study wasconducted through a descriptive study. In addition, the study employed a survey research design in data collection. The sampling procedure of this study was used non- probability sampling procedure particularly purposive sampling or judgmental sampling. This research employed quantitative data collection method whereby data was gathered by the use of closed ended questionnaires, which were self-administered. The data collected was analyzed using the software called Statistical Package for the Social Sciences (SPSS) version 20 and results shown in terms of frequency distribution and percentages. From the data collected, 48 questionnaires were filled, 42 were returned and 6 missed which represent 88% response rate while 12% was missing. This response rate was considered satisfactory to make conclusions for the study.
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The purpose of the study was to conduct a survey of Liquidity management factors affecting in financial performance of the commercial banks in Mogadishu, Somalia. The study design was used is descriptive survey, the target population of the study was 112 employees of commercial banks in Mogadishu. A sample size of 87 respondents was selected using Slog van's formula. Data collection methods used included questionnaire. The selection sample technique was purposive or judgmental approach. Data was analyzed using SPSS version. The key findings were that liquidity management drivers individually had a positive influence on the financial performance of commercial banks in Mogadishu-Somalia. The overall results indicated that there was a significant linear relationship between account receivable management, account payable and cash management on financial performance of commercial banks in Mogadishu. The conclusions were based on the objectives of the study that liquidity management drivers had a significant influence on financial performance of commercial banks. The results established that liquidity management drivers were found to significantly and positively influence financial performance of commercial banks in Mogadishu, Somalia. The study results support the view that liquidity management drivers have a significant effect on financial performance. It is recommended that managers should study and select the driver that best suits their banks in order to achieve maximum performance.
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In Mogadishu, mineral water manufacturing is considered to be one of the most important businesses. The purpose of this research was to determine the effects of working capital management on profitability of manufacturing firms in Mogadishu. The study developed four specific objectives, that is, to determine whether the inventory management has an effect on working capital management of mineral water manufacturing firms in Mogadishu-Somali, investigate the effect of cash management on working capital management of mineral water manufacturing firms, to establish whether account receivables management has an effect on working capital management of mineral water manufacturing firms in Mogadishu-Somali. The study employed a Descriptive research design. Questionnaires were used to collect primary data. The results reveal that Inventory Management, Cash Management, Account Receivables Management and Account Payable Management have significant and positive effects on profitability of manufacturing companies in Mogadishu. The study recommended that top managers of manufacturing companies in Mogadishu should exploit its Account Receivables Management and Cash Management that generate competitive advantage to enhance of the organization.
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The issue of capital management was still not clear on financial performance of the firms. Throughout the years, the Tea factories in Kenya have been experiencing several challenges. The challenges in fluctuation of bonus pay in tea factories have been attributed from unmanageable working capital on tea factories working capital management issues. The main objective of the study was to assess the effect of working capital management practices on the financial performance of tea Factories in Kisii County. The specific objectives were; to assess the effect of liquidity level on financial performance and to examine the effect of inventory control on financial performance. The study adopted descriptive research design. The target population was 795 employees working in tea Factories in Kisii County. The sample of 269 employees working in tea factories was used. Stratified sampling technique was used in the study. The researcher used questionnaires as the main tool for data collection. Data was analyzed using descriptive statistics such as percentage, mean, variance and standard deviation. The data analyzed was presented by use of tables. The study concluded that liquidity level had a positive correlation to financial performance by return of equity; a unit increase in liquidity level would result to a decrease to return on assets of firms. The study concluded that tea factories converted stock quickly and sold to the market without with a loss regarding working capital management practices. The study recommended that liquidity of the tea factory should decrease the conversion liquidity. It should maintain account receivables as a working capital management practice.
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Liquidity risk management has been on the rise all over the world and more rampant in commercial banks in the continent. Liquidity risk leads to firms being bankrupt and finally the firm’s collapse. This problem has been on the rise and it has to be curbed early since commercial banks like other firms contribute a lot to the economy. The purpose of this study is to assess the effects of Liquidity risk management strategies on the profitability of commercial banks listed in Nairobi Securities Exchange. The specific objectives were; to establish the effect of encouraging deposits on profitability of commercial banks listed in Nairobi Securities Exchange, and to investigate the effect of secured financing on profitability of commercial banks listed in Nairobi Securities Exchange. Cross-sectional study design was used with census method to select all the 11 commercial banks. The target population was 11 banks listed in Nairobi Securities Exchange. The sample size included the 11 banks listed in Nairobi Securities Exchange. Secondary data was extracted from audited published reports and financial statements of the listed commercial banks. Descriptive statistic such as percentage, mean standard deviation was also used to analyze the data. The study showed that deposit level had a statistical relationship between liquidity risk management and profitability. Therefore, all the Pearson correlation values were more than 0.5 recommending for a moderate relationship between variables, thus there is a weak relationship between liquidity risk management and profitability of commercial banks listed at the Nairobi Securities Exchange (NSE) in Kenya and hence can rely on their significance. The study recommended that deposit level to be highly established on commercial banks listed at Nairobi Securities exchange in Kenya.
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The study explored the impact of risk management (credit and liquidity) on financial performance of money deposit banks in Nigeria. The study employed panel methodology and other econometric techniques such as hausman test, descriptive statistics. Results from the panel regression show a positive relationship between risk management and financial performance of money deposit banks. The study recommends that banks in Nigeria should augment their capacity in, liquidity risk analysis, and credit analysis and loan administration while the regulatory bodies should pay more attention to banks' compliance to regulations of the Bank and other Financial Institutions prudential guidelines.
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Liquidity refers to a firm's ability to fund increase in assets and meet obligations as they fall due. Working capital includes all the current assets and current liabilities. The study concentrated on Banks that were listed at the Nairobi Securities Exchange. The study used a longitudinal research design for it involved taking repetitive measures overtime for the purpose of comparing returns over the periods. The target population was made up of all the 9 NSE quoted commercial banks in Kenya; this was over a period of 10 years from 2002 to 2011. The data was collected from secondary sources; these were published financial statements available at banking survey of Kenya. The descriptive statistics such as mean and standard deviation were used to measure variations. Statistical inferences were drawn using correlation and regression analysis in analyzing the data and testing of hypotheses. The key findings from the study were: debtors' collection period and cash conversion cycle have significantly negative relationship with liquidity of quoted commercial banks; this means that more liquid banks take the shortest time to collect cash from their customers. Creditors' payment period have significantly positive relationship with liquidity of quoted commercial banks in Kenya, this implies that the longer the bank takes to pay its creditors, the more liquid it is. The research recommends that the NSE commercial banks should maintain their current assets for meeting their short term obligation thereby increase their liquidity by shortening their debtors' collection period and cash conversion cycle whereas increasing their creditors' payment period for better liquidity position. Findings of this study add to knowledge and understanding of the subject of working capital management and its implication on liquidity risk on NSE quoted commercial banks.
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Decisions about how much to invest in the customer and inventory accounts, and how much credit to accept from suppliers, are reflected in a firm’s cash conversion cycle. Some previous studies have used this measure to analyze whether shortening the cash conversion cycle has positive or negative effects on the firm’s profitability. These previous studies have focused their analysis on large firms. This study contributes to literature by focusing on the small and medium-sized organizations like the sugar-cane out-grower companies in Kenya whose unique characteristics include very high levels of current assets, fewer alternative sources of external finance and dependency on short-term finance. Using a descriptive cross-sectional research design, a total of 30 managerial staff members from the ten out-grower companies in Kenya were surveyed by way of completing a semi-structured questionnaire. Secondary data was also collected to supplement the primary data. The study further established that more than 67% of the out-grower companies hold their inventories for more than 60 days before converting them into receivables due to large order sizes targeting economies of scale and bulk discounts. Lack of appropriate skills has also hindered the use of techniques like just-in-time (JIT) for efficient inventory management.
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The hotel industry constitutes has unique characteristics in tourist products, offering essential and unique services to tourists in the industry. The purpose of the study was to establish the effects of working capital management on liquidity of classified hotels in Eldoret Town -Kenya, the study sought to address the following specific objectives: to establish how Cash management affects liquidity of hotels in Eldoret- Kenya. The target population of the study was 12 classified hotels in Eldoret Town. A sample of 129 respondents was selected using Yamane technique of sampling in all the 12 hotels and to group the respondents into eight strata. This study used primary data. Data collection methods used included use of questionnaires. To determine the reliability of research instruments a pilot study will be conducted before the actual data collection and further split half method will be carried out to calculate Cronbach alpha. Data was analyzed quantitatively and presented descriptively and illustrated by use of tables. In particular, descriptive statics such as means, standard deviations, and frequencies were used to analysed data, also inferential statistics multiple regression was used. The financial data covered a period of 6 years (20042011) this period has been chosen on the belief that it is long enough to aid the study formulate reliable conclusions. The findings of the study indicated that Cash management (β = 0.422, p < 0.000) showed a positive significant effect on the dependent variable Liquidity of classified Hotels. This study recommends that there is need for hotel managers to create value for their shareholders by ensuring effective and efficient management of debtors, they should negotiate for better terms of credit with their supplies, managers should put in place effective inventory control systems to their supply chain department and lastly ensure effective cash management and working capital practices.
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