The Relationship Between Cash Management and the Financial Performance of Unilever Tea Limited, Kericho County, Kenya

Abstract

This paper sought to assess the relationship between cash management and the financial performance of Unilever Tea Limited. The study was anchored on the liquidity performance theory. The study adopted a cross-sectional research design with a target population of 150 employees drawn from the top, middle and lower management levels. A sample size of 109 respondents was obtained scientifically using the Yamane (1967) formula. The study adopted purposive and simple random sampling techniques to select respondents. The study used both secondary and primary data. Primary data was collected using a structured questionnaire, while secondary data was collected from the records at Unilever Tea Limited. Data collected was analyzed using descriptive and inferential statistics, where descriptive results were presented in the form of means and standard deviation, while inferential statistics used correlation and regression models. The findings established that cash management has a positive influence on the financial performance of the tea industry (r=0.699, P<0.05). The study concluded that cash management had a positive influence on the performance of the tea factories. Financial performance was mainly influenced by the ability to plan and manage cash efficiently. The study recommends that cash audits, cash planning, and credit management be done effectively to ensure the availability of working capital.