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Research Paper | Business Administration | Kenya | Volume 12 Issue 10, October 2023
The Nexus between Working Capital Management Practices and Sustainability of Water and Sanitation Companies (WASCOs) in Kenya: A Post Positivism Approach
David Ndumo [3] | Dr. Rosemary Kagondu [2] | David Kiragu [11]
Abstract: Sustainability of Water and Sanitation (WATSAN) services is an artful trade-off between adequacy and quality of supply. Achievement of the two attributes remain a problem globally. Water and sanitation is classified as sustainable development goal number six in the UN seventeen sustainable development goals. The sector is regarded as an enabler to the achievement of all the other SDGs. WATSAN sustainability encompasses improved access, acceptable water quality against growing demand. The study examined the effect of working capital management practices on sustainability of WASCOs in Kenya. The study was guided by Gitma's cash conversion cycle theory. The Study adopted a post positivism research philosophy and mixed research design. A sample of 46 companies was selected from the 91 licensed WASCOs in Kenya. A five-point likert scaled questionnaire was used to collect primary data. Secondary data was collected using secondary data collection sheet from the annual impact reports by water and sanitation regulatory board (WAREB). Cronbach's alpha coefficient was used to assess for reliability while Kaiser-Meyer-Olkin test and Bartlett's Chi-Square test of Sphericity was used to assess for validity of the data collection instrument. Diagnostic tests of Gaussian distribution, outliers, autocorrelation, multicollinearity and linearity were carried out using Q-Q plot, box plot, Durbin-Watson d statistic, Tolerance & Variance Inflation Factor statistics and Pearson's correlation coefficient respectively. A multivariate linear model generated result with R2=0.930. The results imply working capital management practices explained approximately 93% of WASCO sustainability. ANOVA results show F-statistics of 135.979 with a p-value of 0.000 indicating existence of a statistically significant influence of financing practices on sustainability of WASCO. Beta coefficients results for cashflow management practices show ?=13.396 followed by ?=9.043 for payables management practices, ?=6.841 for receivables management practices and lastly, ?=3.224 in the case of inventory management practices. The study recommends the consistent implementation of sound practices across the working capital pillars as all were statistically significant in driving sustainability of the WASCO's.
Keywords: Sustainability, Water and Sanitation, Working Capital Management, WASCO
Edition: Volume 12 Issue 10, October 2023,
Pages: 122 - 127