| dc.description.abstract | Working capital management relates to daily organization's operations. From the
literature review, there is relationship between working capital management and
performance of organizations for profit. However, no known study has linked
working capital management with performance of public health centers. Previous
studies in working capital management have just delved on its relationship with
profitability and firm value. No available study has singled out the elements of
working capital management like accounts payable days and accounts receivable days
and investigated their effect on efficiency and liquidity as measures of financial
performance. These relationship is therefore not known in the context of public health
centers in Ugenya Sub County. The purpose of this study was to establish the
relationship between working capital management and financial performance of
public health centers in Ugenya sub-county. Specific objectives of the study were to
establish the effect of accounts payable on financial efficiency of the public health
Centre and to determine how accounts receivable days affect liquidity of the public
health centers. The study adopted a correlation survey design. The target population
was nine facility administrators in the nine Ugenya sub county public health centers
taken through a census survey. A pilot study was carried on one health facility
administrator representing ukwala health center. Primary data for the study was
obtained through structured questionnaires while secondary data obtained from
document review. The results showed that the accounts payable (days with
unstandardized beta coefficient and p value of ~ = -0.303, p< .05 meaning that
accounts payable significantly affects financial efficiency of public health centers in
Ugenya sub county. This relationship implies that when the number of days in which
creditors are paid is reduced, the financial efficiency of these health centers increases
meaning that their degree of efficiency in using labor, management and capital is
increased as a result. The study.further revealed that accounts receivable days had
unstandardized beta coefficient of p values of ~ = -0.858, p< .05. This means the beta
coefficients, ~, which is the degree to which the independent variables each explain
the dependent variable, is negative and significant. The standardized ~ coefficient of
accounts receivable days shows that a unit standard deviation of accounts receivable
days causes -8.58 standard deviations in liquidity of the health centers in Ukwala subCounty. This implies that when the number of days in which debtors are supposed to
repay the debts they owe the public health centers is reduced, their liquidity increases
meaning that their ability to meet their financial obligations is enhanced as a result of
prompt collection of debts from debtors. Finally, it was established that the
correlation between accounts payable days, accounts receivable days and liquidity
was negative with correlation coefficients of -0.583,-0.633 and -0.442 respectively.
This implies that an increase in the accounts payable days, accounts receivable days
and average stock would automatically lead to a decrease in the liquidity of public
health centers in Ugenya sub-county. The study recommended that the public health
facilities should settle their bills to services offered or goods supplied promptly as this
will enhance their financial efficiency and will curb the errors of overpayment to
suppliers as a result of accrued bills | en_US |
