Effects of Total Assets on Financial Performance of Food and Beverage Manufacturing Firms in Nakuru County, Kenya

Abstract

Since 2015 some manufacturing firms in Kenya closed their business due to poor performance while others have been forced to relocate their manufacturing plants to other countries. Some companies have also scaled down their manufacturing capacity impacting negatively on the financial performance of manufacturing firms therefore the study sought to analyze the effect of total assets on financial performance of food and beverage manufacturing firms in Nakuru county Kenya. The study was guided by economic theory of firm growth. The study adopted descriptive survey research design with a target population of 15 food and beverage manufacturing firms. The unit of observation was 15 food and beverage manufacturing firms in Nakuru County. The unit of analysis was 56 employees in the finance department. The study utilized primary data. Questionnaires were used to collect primary data desirable for the study. Piloting was done in Kericho County. Data was analyzed using both descriptive and inferential statistical methods. Descriptive analysis was done using frequency, percentage, means and standard deviations to describe the basic characteristics of the population. Inferential statistics involved the use of Pearson’s Product Moment correlation and multiple regression model. The finding of the study was presented in table form. There exists a moderate positive and significant relationship between total assets and financial performance of food and beverage manufacturing firms in Nakuru county Kenya (r=0.513 and p=0.000). The study recommended that food and beverage manufacturing firms ought to have more tangible assets this is because tangible assets are often an essential resource for such business. The study also recommended that for food and beverage manufacturing firms to increase their sales revenue, they ought to align marketing with sales