Working Capital Management and its Effect on Financial Performance of Public Universities in Coastal Region Kenya

Abstract

Kenya's public universities face challenges such as budget cuts and declining enrollments. This puts pressure on institutions and highlights the need for strong financial management systems. The main goal of this research was to assess the influence of working capital management (WCM) on financial performance (FP) of coastal public universities in Kenya. The effects of cash, accounts receivable, accounts payable, inventories and the size of the university on financial performance were examined. The study utilized primary and secondary data analysis involving financial controllers and managers for primary data collection. Secondary data from 2013 to 2019 was also collected from financial reports of selected universities. The findings of this study demonstrated the beneficial effect of working capital management on financial performance. The study highlights the importance of implementing tailored financial management strategies for each institution based on their specific needs and size. Recommendations include focusing on cash management, improving receivables and payables management, optimizing inventory strategies, and considering university size when designing working capital approaches.