Relationship between working capital management and profitability of small-size enterprises in Kisumu County, Kenya

Abstract

established by using Krejcie and Morgan’s table. Primary data was gathered by using semistructured questionnaire administered personally by drop and pick technique. Data was analyzed using descriptive statistics, the hypothesis was tested by use of Pearson moment correlation and multiple regression analysis. The findings of the study indicate a significant relationship between profitability and accounts receivables of small sized enterprises [r=.440, p=0.000], significant positive correlation between the profitability and inventory management [r = .339, n=314, p =0.000] and concluded that there was significant relationship between inventory management and profitability of SSEs as well as significant relationship between accounts receivables and profitability of SSEs. The recommends that managers should reduce inventory periods. The researcher recommends further study on relationship between working capital management, innovations and productivity among female owned SMEs in Kenya.