RETAINED EARNINGS AND PROFITABILITY OF MANUFACTURING FIRMS LISTED AT NAIROBI SECURITIES EXCHANGE

Strategic Journal of Business & Change Management Pub Date : 2023-10-15 DOI:10.61426/sjbcm.v10i4.2741

MAXWELL ABALA MULEKANO, JULIUS MIROGA, PhD

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Abstract

This study sought to assess the influence of retained earnings on profitability of manufacturing firms listed at the Nairobi Securities Exchange. The study was guided by the following specific objective: finding out the influence of retained earnings on profitability of manufacturing firms listed at the Nairobi Securities Exchange. The study was guided by Pecking Order Theory. The study adopted descriptive research design. The study targeted 8 listed manufacturing firms at the NSE. The sample size was 8 listed manufacturing firms listed at the Nairobi Securities Exchange. Secondary data was collected for duration of 5 years (January 2016 to December 2020) annually. Descriptive and inferential statistics were analyzed using STATA 15. Descriptive statistics entailed central tendency (means) and dispersion (standard deviation). Inferential statistics such as regression and correlation analyses were also used to determine both the nature and the strength of the relationship between the dependent and independent variables. Analyzed data was presented using tables and graphs. The findings revealed that, retained earnings have significant positive effect on profitability of manufacturing firms listed at the Nairobi Securities Exchange. This implied that increase in the utilization of retained earnings in the capital structure would results to significant increase in profitability. The study recommended that it would be prudent to recommend that manufacturing firms listed at the Nairobi Securities Exchange adopt the use of retained earnings as a source of finance in most of their operations as compared to other sources of funds so as to maintain the positive relationship between retained earnings and financial performance. The study further recommended that the manufacturing firms listed at the Nairobi Securities Exchange should embrace retained earnings as sources of finance for new projects in emerging markets. Key words: Retained Earnings, Capital Structure, Profitability CITATION : Mulekano, M. A., & Miroga, J. (2023). Retained earnings and profitability of manufacturing firms listed at Nairobi Securities Exchange. The Strategic Journal of Business & Change Management, 10 (4), 163 – 173. http://dx.doi.org/10.61426/sjbcm.v10i4.2741

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在内罗毕证券交易所上市的制造业公司的留存收益和盈利能力

本研究试图评估留存收益对在内罗毕证券交易所上市的制造企业盈利能力的影响。本研究的具体目标是:找出留存收益对在内罗毕证券交易所上市的制造企业盈利能力的影响。本研究以啄食顺序理论为指导。本研究采用描述性研究设计。这项研究的目标是印度证券交易所的8家上市制造业公司。样本大小为8家在内罗毕证券交易所上市的制造业公司。每年收集5年(2016年1月至2020年12月)的二次数据。使用stata15进行描述性和推断性统计分析。描述性统计包括集中趋势(均值)和离散度(标准差)。推理统计，如回归和相关分析，也被用来确定因变量和自变量之间关系的性质和强度。分析后的数据以表格和图表的形式呈现。研究发现，留存盈余对在内罗毕证券交易所上市的制造业企业的盈利能力有显著的正向影响。这意味着资本结构中留存收益利用率的增加将导致盈利能力的显著增加。研究报告建议，谨慎的做法是建议在内罗毕证券交易所上市的制造公司在其大部分业务中采用留存收益作为资金来源，而不是其他资金来源，以便保持留存收益与财务业绩之间的积极关系。该研究进一步建议，在内罗毕证券交易所上市的制造企业应将留存收益作为新兴市场新项目的资金来源。关键词:留存盈余、资本结构、盈利能力Miroga, J.(2023)。在内罗毕证券交易所上市的制造业公司的留存收益和盈利能力。商业战略杂志;变革管理，10(4)，163 - 173。http://dx.doi.org/10.61426/sjbcm.v10i4.2741

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Strategic Journal of Business & Change Management

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