INVENTORY DRIVERS AND FINANCIAL SUSTAINABILITY OF PUBLIC UNIVERSITIES IN KENYA
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Abstract
This study determined the effect of inventory on financial sustainability of public universities in Kenya. The study was anchored on operating cycle theory. The scope of the study was based on public universities in Kenya for period between years 2019 to 2022. Quantitative research design was used in this study. The study population was 31 accredited public universities in Kenya. The auditor general's office provided the secondary data. The research concluded that the financial viability of Kenya's public universities is influenced by inventory drivers. The study emphasized the need of reducing inventory turnover is key managerial advice for Kenyan public colleges. To enhance cash flow and minimize expenses, it was recommended to streamline use of inventory control systems. The policy suggestions also stressed the need of enhancing the turnover of inventories. The study recommended that optimizing inventory turnover is vital for minimizing carrying costs and preventing overstocking. Public universities should regularly assess inventory day ratios to identify opportunities for improvement and streamline procurement processes. Implementing inventory control systems can enhance accuracy in tracking inventory levels and ensure efficient inventory management.
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References
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Doan, T.H., Bui, D.H., & Hoang, T.H. (2019). The impact of working capital on financial performance of the small and medium-sized enterprises in Vietnam. Review of Contemporary Business Research, 5(1), 158-163.
Galliers, R.D. (1991). Choosing appropriate information systems research approaches: A revised taxonomy. North Holland: Elsevier Science Publishers,
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Horne, J., & Wachowicz, J. (2000). Fundamentals of Financial Management (11th Ed.). USA: Prentice Hall International Inc.
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Kilonzo, J.M., Memba, S.F., & Njeru, A. (2019). Effect of accounts receivable on financial performance of firms funded by government venture capital in Kenya. Journal of Economics and Finance (IOSR-JEF), 7(1), 62-69.
Kithii, J.N. (2008). The relationship between working capital Management and profitability of Companies listed at the NSE. (MBA Research project). University of Nairobi, Kenya.
KPMG. (2023). The impact of GST on working capital management in India. KPMG Report.
Kwame, K. (2018). Working capital management practices of small firms in the Ashanti Region of Ghana. Journal of Business Finance Account, 3(4), 1-4.
Mbah, S., Obiezekwem, J., & Okuoyibo, A. (2019). Inventory management and operational performance of manufacturing firms in South-East Nigeria. International Business Research, 12(7), 76-82.
Munene, F., & Tibbs, Y.C. (2018). Determine the effects of accounts receivable management on financial performance of Embu Water and Sanitation Company. International Academic Journal of Economics and Finance (IAJEF), 3(2), 216- 240.
Mutungi, M. (2010). The relationship between working capital management policies and financial performance of oil marketing firms in Kenya. (MBA research project). University of Nairobi, Kenya.
Naeem, U.H., Malik, M. I., Muhammad, A., & Mehboob, H. (2020). Effects of working capital management on firm Performance: An Empirical Study of Non-financial listed Firms in Pakistan. International Journal of Academic Research in Business and Social Sciences, 4(6), 114-133.
Nyakundi, M. (2003). A survey of working capital management policies among public companies in Kenya. (MBA Research project). University of Nairobi, Kenya.
Oketch, H. O. (2000). Micro and small enterprises in Kenya: Agenda for improving the policy environment.
Padachi, K. (2006). Trends in Working Capital Management and Its Effect on Firms’ Performance: An Analysis of Mauritian Small Manufacturing Firms”. Retrieved From Http://Www.Emeraldinsight.Com/.
Pandey, I. (2018). Financial Management (9th ed.), New Dehli: Vikas Publishing House PVT Ltd.
Preve, L. & Sarria-Allende, V. (2010). Working capital management. UK: Oxford University Press.
Rafuse, M.E. (2014). Working capital management: An urgent need to refocus. Journal of Management Decisions, 34(2), 59-63.
Singh, P. K. (2020). Working capital management in Lupin laboratories Ltd.:A case study. Journal of Management Accounting, 39(7), 534-541.
Wachira, C.W. (2018). Effect of government funding on operational efficiency of public universities in Kenya. Research in Comparative and International Education, 3(4), 310- 323.
Waweru, C.G. (2011). The relationship between working capital management and Value of Companies quoted at the NSE. (MBA Research project). University of Nairobi, Kenya.
Webb, J. (2019). A path to sustainability: How revenue diversification helps colleges and universities survive tough economic conditions. Journal of International & Interdisciplinary Business Research, 2(1), 69-97.
Weston, I. F., & Copeland, T. E. (2011). Managerial Finance. New Yolk: The Dryden Press.
Yazdanfar, D. (2021). Information asymmetry and capital structure: an empirical study of micro firms in Sweden. International Journal of Entrepreneurship and Small Business, 17(3), 304-318.
Zhang, Y., & Li, P. (2023). Leveraging AI for advanced inventory management. Journal of Technological Innovations in Business, 11(2), 223-239.
Zikmund, W.G. (2003). Business research methods. (7th ed.). Ohio: South-Wester
Bougheas, S., Mateut, S., & Mizen, P. (2019). Corporate trade credit and inventories: New evidence of a trade-off from accounts payable and receivable. Journal of Banking & Finance, 33(2), 300-307.
Brown, J., & Lee, H. (2023). The role of cash budget variance in financial planning. Journal of Financial Management, 25(2), 188-204.
Cooper, R., & Schindler, P. (2003). Business research methods. Tata: McGraw Hill.
Cokins, G. (2023). Optimizing liquidity through effective accounts payable management. Financial Management Review, 18(1), 45-61
Darush, Y. & Öhman, P. (2019). The impact of accounts receivable use on firm performance. Journal of Advances in Management Research, 23(1), 44-63.
Deloitte. (2022). Accounts receivable management: Leveraging technology for financial performance. Deloitte Insights.
Doan, T.H., Bui, D.H., & Hoang, T.H. (2019). The impact of working capital on financial performance of the small and medium-sized enterprises in Vietnam. Review of Contemporary Business Research, 5(1), 158-163.
Galliers, R.D. (1991). Choosing appropriate information systems research approaches: A revised taxonomy. North Holland: Elsevier Science Publishers,
Gitman, L. J., & Smith, M. B. (2020). Principles of managerial finance: Global and southern African perspectives. New Jersey: Pearson/Prentice Hall.
Huefner R.J. & Gupta, M.C. (2010). A cluster analysis study of financial ratios and Industry Characteristics. Journal of Accounting Research, 10(1), 77-95.
Horne, J., & Wachowicz, J. (2000). Fundamentals of Financial Management (11th Ed.). USA: Prentice Hall International Inc.
Johnson, P., & Garcia, L. (2020). The role of cash reserves in financial sustainability: Evidence from publicly traded companies. Journal of Financial Economics, 37(4), 215-230.
Kilonzo, J.M., Memba, S.F., & Njeru, A. (2019). Effect of accounts receivable on financial performance of firms funded by government venture capital in Kenya. Journal of Economics and Finance (IOSR-JEF), 7(1), 62-69.
Kithii, J.N. (2008). The relationship between working capital Management and profitability of Companies listed at the NSE. (MBA Research project). University of Nairobi, Kenya.
KPMG. (2023). The impact of GST on working capital management in India. KPMG Report.
Kwame, K. (2018). Working capital management practices of small firms in the Ashanti Region of Ghana. Journal of Business Finance Account, 3(4), 1-4.
Mbah, S., Obiezekwem, J., & Okuoyibo, A. (2019). Inventory management and operational performance of manufacturing firms in South-East Nigeria. International Business Research, 12(7), 76-82.
Munene, F., & Tibbs, Y.C. (2018). Determine the effects of accounts receivable management on financial performance of Embu Water and Sanitation Company. International Academic Journal of Economics and Finance (IAJEF), 3(2), 216- 240.
Mutungi, M. (2010). The relationship between working capital management policies and financial performance of oil marketing firms in Kenya. (MBA research project). University of Nairobi, Kenya.
Naeem, U.H., Malik, M. I., Muhammad, A., & Mehboob, H. (2020). Effects of working capital management on firm Performance: An Empirical Study of Non-financial listed Firms in Pakistan. International Journal of Academic Research in Business and Social Sciences, 4(6), 114-133.
Nyakundi, M. (2003). A survey of working capital management policies among public companies in Kenya. (MBA Research project). University of Nairobi, Kenya.
Oketch, H. O. (2000). Micro and small enterprises in Kenya: Agenda for improving the policy environment.
Padachi, K. (2006). Trends in Working Capital Management and Its Effect on Firms’ Performance: An Analysis of Mauritian Small Manufacturing Firms”. Retrieved From Http://Www.Emeraldinsight.Com/.
Pandey, I. (2018). Financial Management (9th ed.), New Dehli: Vikas Publishing House PVT Ltd.
Preve, L. & Sarria-Allende, V. (2010). Working capital management. UK: Oxford University Press.
Rafuse, M.E. (2014). Working capital management: An urgent need to refocus. Journal of Management Decisions, 34(2), 59-63.
Singh, P. K. (2020). Working capital management in Lupin laboratories Ltd.:A case study. Journal of Management Accounting, 39(7), 534-541.
Wachira, C.W. (2018). Effect of government funding on operational efficiency of public universities in Kenya. Research in Comparative and International Education, 3(4), 310- 323.
Waweru, C.G. (2011). The relationship between working capital management and Value of Companies quoted at the NSE. (MBA Research project). University of Nairobi, Kenya.
Webb, J. (2019). A path to sustainability: How revenue diversification helps colleges and universities survive tough economic conditions. Journal of International & Interdisciplinary Business Research, 2(1), 69-97.
Weston, I. F., & Copeland, T. E. (2011). Managerial Finance. New Yolk: The Dryden Press.
Yazdanfar, D. (2021). Information asymmetry and capital structure: an empirical study of micro firms in Sweden. International Journal of Entrepreneurship and Small Business, 17(3), 304-318.
Zhang, Y., & Li, P. (2023). Leveraging AI for advanced inventory management. Journal of Technological Innovations in Business, 11(2), 223-239.
Zikmund, W.G. (2003). Business research methods. (7th ed.). Ohio: South-Wester