Effect of Accounts Receivable on Financial Performance of Firms Funded By Government Venture Capital in Kenya
This study sought to establish the effect of accounts receivable management on financial performance of firms funded by Government venture capital in Kenya. The study's objective was to determine the effect of accounts receivable management on firms' financial performance and explore the moderating effect of political environment on a firm's financial performance. The target population comprised all firms (24) funded by government venture capital in Kenya. The study adopted a census approach because of the small number of firms. The study reviewed both theoretical and empirical literature on accounts receivable management. From the review of related literature, a comprehensive conceptual framework of argument of the relationship between accounts receivable management and firm financial performance was formulated. Based on the conceptual framework, a questionnaire was formulated and used to collect primary data for the independent variables while a record survey sheet was used to collect secondary data for the dependent variable. Out of 72 respondents, 51 responded, being 71% Both descriptive and inferential analyses were done. Statistical package for social sciences (SPSS) version 20.0 was used as the statistical tool for analysis of the study. Analysis for variant (ANOVA) and regression analysis were used to test the hypothesis. The results show there is a positive relationship between accounts receivables and financial performance of firms funded by government venture capital in Kenya (0.038) Accounts receivable explain 25.7% of the financial performance of firms funded by government venture capital in Kenya while the variation of 74.3% is explained by other factors. The study recommend that managers in the firms funded by government venture capital should put in place good credit policies to enhance efficient management of accounts receivable thereby improve on their financial performance.