Relationship between Cash Management and Financial Performance of Private Hospitals in Nairobi County, Kenya
Abstract
The general objective of this study was to investigate the relationship between cash management and financial performance of private hospitals in Nairobi County, Kenya. This study adopted a descriptive design. The target population for this study was 25 private hospitals in Nairobi County. The study collected primary data from the respondents. The data collected was quantitative and was analyzed through Statistical Package for Social Sciences (SPSSV18.0). Both descriptive and inferential analysis were conducted by the study. The findings indicated that cash conversion cycle and cash budgeting had a positive and significant effect on financial performance of private hospitals. However, cash banking and cash flow forecasting didn’t significantly improve financial performance. Given that cash management practices were found to enhance the financial performance of private hospitals, this study therefore recommends for continuous embracement of these practices (cash budgeting, cash banking, cash conversion cycle and cash flow forecasting) by private hospitals. To ensure efficient management of cash, clear guidelines and policies should be developed based on the hospital needs to guide the employees in doing the same. To monitor cash flows, private hospitals should adopt automated cash management technology to aid in maintaining healthy cash flow position. Investment in cash management technology will also improve the accuracy and efficiency of cash management and allows the staff to focus on development and innovation. The study recommends future studies to focus on recent hospital directory. The study focused on private hospitals within the Nairobi County, a more comprehensive study should include other counties.
Keywords: Cash Budgeting, Cash Banking, Cash Conversion Cycle, Cash Flow Forecasting, Financial Performance, Private Hospitals
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