Effect of Working Capital Management Practices on Liquidity Risk of Insurance Firms Listed at the Nairobi Securities Exchange (Nse), Kenya

Abstract

This study investigated the liquidity risk of firms listed in the (NSE), Kenya. This study established the existing relationship between two or more non manipulated variables using two groups’ i.e. listed insurance firms and non-listed insurance firms. The population was made up of 12 firms and it included all the 6 NSE listed insurance firms and 6 non listed and this was over a period of 5 years. The 6 non listed insurance firms were selected using simple random sampling technique. The data was collected from secondary sources which was audited and published financial statements. Descriptive statistics was used. Statistical inferences were drawn using testing of hypotheses. The correlation matrix showed a negative correlation coefficient with the dependent variable (Liquidity). Regression analysis revealed that the total variability in the dependent variable (Liquidity) could be and Cash Conversion Cycle (CCC)), at R Square = 48.4%, 22.2% and 30.1% respectively and this was statistically significant. From the findings, the researcher concluded that all the independent variables had a positive statistically significant impact on the liquidity risk of listed Insurance firms.