Browsing by Author "Mathuva, David"

Now showing 1 - 3 of 3
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    Effect of the adoption of International Financial Reporting Standards on the relationship between working capital management and profitability
    Mathuva, David
    This study examines the potential effects of and issues arising from the adoption of the International Financial Reporting Standards (IFRSs) on the relationship between working capital management (WCM) and profitability.
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    The Determinants of forward-looking disclosures in interim reports for non-financial firms: evidence from a developing country
    (Macrothink Institute, ) Mathuva, David
    This paper examines the determinants of the forward-looking disclosures (FLD) in the interim financial reports (IFRs) of non-financial firms listed on the Nairobi Securities Exchange (NSE). Data were collected from a total of 91 firm-year observations for the mid interim periods between 2009 and 2011. A FLD score was developed for each firm in the sample based on the firm‟s disclosure of forward-looking statements in its IFR. The results indicate that firms with higher debt, better performance, higher capital investment and with more concentration of foreign investment tend to have more FLDs in their IFRs. Conversely, cross listed firms are associated with lower FLDs, implying that cross listed firms provide lower forward-looking information compared to non-cross listed firms. Results show a high degree of FLD for better performing firms and firms with higher financial risk. This study contributes to literature by providing evidence to which financial reporting incentives contribute to FLDs in a developing country where enforcement is weak. As a conclusion, the paper recommends firms to provide comprehensive FLDs in future to effectively mitigate informational asymmetries between the management and owners of the firms, especially firms with more concentrated foreign ownership.
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    The influence of working capital management components on corporate profitability
    (Science Alert, ) Mathuva, David
    This study examined the influence of working capital management components on corporate profitability. A sample of 30 firms listed on the Nairobi Stock Exchange (NSE) for the periods 1993 to 2008 was used. Both the pooled OLS and the fixed effects regression models were used. The key findings from the study were: (1) there exists a highly significant negative relationship between the time it takes for firms to collect cash from their customers (accounts collection period) and profitability (p<0.01). This means that more profitable firms take the shortest time to collect cash from their customers; (2) there exists a highly significant positive relationship between the period taken to convert inventories into sales (the inventory conversion period) and profitability (p<0.01). This means that firms which maintain sufficiently high inventory levels reduce costs of possible interruptions in the production process and loss of business due to scarcity of products. This reduces the firm supply costs and protects them against price fluctuations; (3) there exists a highly significant positive relationship between the time it takes the firm to pay its creditors (average payment period) and profitability (p<0.01). This implies that the longer a firm takes to pay its creditors, the more profitable it is.