Cash Control Practices and Financial Efficacy of Manufacturing Firms in Mombasa County of Kenya

Abstract

The study aimed to test the influence of cash control practices on financial efficacy of manufacturing firms in Mombasa County of Kenya. This study was anchored on Trade off Theory. The research adopted descriptive research design. The target population for the study was 611 employees of the 31 manufacturing firms in Mombasa County. The sample size was 62 respondents comprising of chief executive officers and finance officers of the manufacturing firms selected using purposive sampling method since they are the ones exclusively dealing with financial matters on daily basis. Primary and secondary data was used. Structured questionnaires used, which were both open and closed ended, collected primary data while audited annual financial statements of manufacturing firms provided secondary data. Kaiser-Meyer-Olkin (KMO) Measured of Sampling Adequacy of cash controls was at 0.795 which was above 0.5. Inferential and descriptive statistics was used in analyzing data through Statistical Package for Social Sciences (SPSS) which conducted the analysis of variance(ANOVA).Inferential statistics included correlation and regression analysis. The confidence level was 95% with an error margin of 5%. It emerged that cash controls have a significant positive influence on financial efficacy of manufacturing firms in Mombasa County of Kenya. The study concluded that cash control practices have a positive notable influence on the financial efficacy of manufacturing firms in Mombasa county of Kenya. The variable studied was done at the choice of the researcher which therefore limits the comparability of other studies. Therefore, this study recommends further studies should be geared towards focusing on other variables which influence the manufacturing firm’s financial efficacy in the entire coastal region so that a conclusive agreement can thereby be reached.