Factors that determine performance measurement of Kenyan listed companies : based on analysis from the Nairobi securities exchange (NSE) member firms

Abstract

This research study focused on factors that determine performance measurement of companies listed at the Nairobi Securities Exchange (NSE). Performance measurement in our Kenyan context could either be good or bad in the period under consideration. The primary objective of most listed firms is to maximize shareholder wealth and thus the factors considered by the researcher were financial and non-financial information, The researcher also sought to find out which of the two factors holds greater weight in a decision making context for analysts and investors. Financial information in the study comprises mainly financial ratios that most market Analysts and investors view their figures. Non-financial information in this context refers to corporate actions, company announcements or macro-economic conditions. main source of data was primary in which the researcher used questionnaires and interviews to interact with dealers, financial and research analysts of the NSE member They provided appropriate responses to enable the researcher determine key financial ratios and non- financial information that affect performance of listed firms. The study draws conclusions to show a direct relationship exists between financial ratios and non-financial information and that neither of the two factors holds greater weight in a decision making context for both analysts and investors. The research infers that with either ofthe factors, it depends on its extent on a finn's value. The research was able to determine the average payout ratio for listed firms, which is line with most firms' objective to maximize shareholder wealth. The study recommends altemative indices that investors can use to gauge the performance of their portfolios when they pursue investment strategies