Cash management and profitability of private organisations: the case of New Vision group

Abstract

The study was set out to establish the effect of cash management and profitability of private organizations taking a case of New Vision. The study looked at specific objectives that is cash planning (determination of optimal cash balance, cash budgeting), cash collection procedures (cash float management, cash cycle planning) internal cash control (cash control procedure, cash monitoring. The study took both quantitative and qualitative approaches and co relational, cross sectional survey designs. A sample size of 129 respondents participated in this study but only 118 returned the questionnaires. The study also employed Pearson correlation and Regressive Analysis to determine the direction, strength, significance and influence of independent variable on dependent variable. The research findings indicated that cash planning, cash collection procedures and internal cash control are all important and affect financial performance of New Vision. If all of them are emphasized, cash management can be enhanced. From the findings and corresponding discussion, the study concludes that cash management has significant influence on profitability in New Vision. All the dimensions of cash management(cash planning, cash collection procedure and internal cash control) had significant influence on profitability in New Vision which indicated that cash management can significantly predict variations in financial performance in New Vision. The study in view of the major findings made some recommendations including proper cash budgeting must be in place so as to be able to determine the anticipated cash receipts, strong cash collection procedures means and strong cash control system in place. Management must also learn to use the cash budget to direct the firm to a profitable position