Working capital management practices and operational performance of selected supermarkets with national network

Abstract

This paper examined the effect of working capital management practices on the operational performance of selected supermarkets with the national network in Kenya focusing on inventory and creditors’ management as well as receivables and liquidity practices. The paper was pegged on Agency Theory, Iceberg Theory of Money Management and Cash Management Theory. Guided by descriptive research design, 52 branch managers were sampled from four major supermarkets using both the stratified and random sampling methods. Data were analyzed using both descriptive and inferential statistical analysis. Findings revealed that inventory and creditors management practices had a very low effect on the operational performance of supermarkets in Kenya. The study, therefore, recommends that supermarkets should introduce a system where managers are fully equipped with working capital management skills. This should be done continuously to prevent the occurrence of severe liquidity challenges which have witnessed in the past.

Does Working Capital Management Influence Operating and Market Risk of Firms?

“…They argued that both the cash conversion cycle and cash-to-cash equivalent affect the firm performance differently. Working capital management is one of the crucially important practices of the managers and they should be equipped with efficient skills to prevent the occurrence of several liquidity challenges (Wanyoike et al 2021).…”

“…Deployment of panel data techniques on a sample of listed firms proposed that efficient WCM can improve the investors' awareness and information transparency, which improves the stock performance by reducing the market risk. Wanyoike et al (2021) found that excess working capital with large creditor management practices increases the volatility in the operational performance, which entails operational profits volatility. Hence, the firms should equip their managers with WCM skills to implement an efficient policy to control the volatility in operating profits.…”

The Impact of the Energy Crisis on Inflation in the Republic of North Macedonia

“…This reflects the importance and scientific and professional contribution of this work. Considering its topicality, complexity and importance, there is a very rich literature in the world and in Serbia dedicated to the analysis of trade liquidity (Berman, 2018;Dekimpe, 2019;Evans, 2005;Levy, 2020;Pitari, 2020;Li, 2014;Garg, 2015;Akgün, 2020;Wanyoike, 2021;Kalan, 2020;Lyngstadaas, 2020;Macatumbas Corpuz, 2021;Zimon, 2021;Sorin Gabriel, 2021;Hatem, 2018;Topal, 2013;Masadeh, 2018;Högerle, 2020;Arnaldi, 2021). In this context, some works are dedicated exclusively to the econometric analysis of inventory in retail (Adebayo, 2017;Gaur, 2003;Gaur, 2005;Kolias, 2011;Krishnankutty, 2011;Kalan, 2020;Knežević, 2015;Masadeh, 2018 ) .…”

The Influence of Working Capital Management on the Profitability of Listed Manufacturing Companies in Tanzania

“…However, globally, several LMCs have been facing profitability challenges (Tingbani, 2020). In Africa, several LMCs have faced declining performance to the extent of being placed under receivership, and de-listing due to failure to pay dividends and other current liabilities (Wanyoike, Onyuma, & Kung'u, 2021).…”