THE RELATIONSHIP BETWEEN WORKING CAPITAL MANAGEMENT AND FINANCIAL PERFORMANCE OF PRIVATE HEALTH FACILITIES IN MOMBASA COUNTY, KENYA

ABSTRACT

The study sought to establish the relationship between working capital management and profitability of private health facilities in Mombasa County, Kenya. The study used a cross-sectional casual research design. The target population comprised of 10 private health facilities. Data was collected from secondary sources for between 2012 and 2018. Regression analysis was used to establish the actual relationship between the study variables. The dependant variable was financial performance while the independent variable being working capital management practices. The study found out that a positive significant relationship exists between profitability, collection of average period and Consumable materials used. Average payment period revealed an opposite association with profitability. The study concluded that there exist a significant relationship between financial performance and working capital management in health facilities in Mombasa County. Thus increase in profitability is shown when there is an increase in Accounts payable while decreasing with an increase in accounts receivable.  The study recommends that efforts should be made to ensure consumables being purchased at the facilities are being used effectively so as to reap maximum profit.

 

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Author
*Ogilo Fredrick; ** Leila Hassan