Effects of Cash Management Practices on the Financial Performance of the Hotel Industry in Kisii County, Kenya

Abstract

This study was carried out in Kisii County on the topic of effects of cash management practices on the financial performance of the hotel industry. Literature has existed about cash management practices as a pre-requisite for better financial performance of the hotel industry. The study was based on the objectives which included, finding out how budgeting, controlling, and planning as cash management practices affect the financial performance of the hotel industry. Data used included primary and secondary with primary data collected by use of self administered questionnaire. The study covered a sample of 134 respondents. The findings revealed that there is significant correlation of 0.05 between cash management practices and the financial performance of the hotel industry. Cash as an important current asset that needs critically budgeted, planned and controlled for optimal balance to enable business activities take place smoothly. If cash management is maximally ensured in business ventures, holding other factors positive the business must boom and serve the public as expected reflecting better and improved financial performance. However poor cash management practices constrains business operations and some customers who are not satisfied with the services run away signifying poor financial performance and hence retardation in the business growth.