Relationship between commercial paper financing and working capital components in Kenya

Abstract

The objective of the study was to establish the relationship between Commercial Paper financing and working capital components in Kenya. A casual research design was adopted. Population consisted of all the twenty seven companies that have issued commercial paper in Kenya since the first issue by Brooke bond in 1994.Twenty two companies that have been in the market for at least two years were analysed. Secondary source of data was used to help the researcher measure both aspects of the variables which are Commercial Paper and working capital components - Inventory, Accounts receivable and Cash. Period of study was from 1994 when the first paper was issued in Kenya to 2011. The Source data included NSE database, Capital Markets Authority (CMA) and Annual Audited Financial Statements of selected companies. Data was analyzed using Statistical Packages for Social Sciences (SPSS) version 11. Regression and correlation analysis was used to determine the nature and the strength of the relationship between the independent and dependent variables