IDEAS home Printed from https://ideas.repec.org/a/bcp/journl/v7y2023i5p1341-1348.html
   My bibliography  Save this article

An Assessment of Liquidity and Shareholders’ Earnings of Listed Firms at The Nairobi Securities Exchange, Kenya

Author

Listed:
  • Kirui Kipngetich Vincent

    (School of Human Resource Development, Jomo Kenyatta University)

  • Dr. Onchangwa Gilbert, PhD

    (Department of Economics Accounting and Finance, Jomo Kenyatta University)

Abstract

The global changes in the business environment and the increased demand for improved shareholder’s earnings have prompted big firms to re-examine their liquidity levels. During the 2008 global economic crisis, many big institutions experienced liquidity challenges which led to the decline in the earnings of shareholders. The current study was therefore necessary to analyse the effect of liquidity on shareholders earnings of listed firms at the Nairobi Securities Exchange. The liquidity theories, were used to guide the research. A descriptive research design was used in this study. The study’s target population was all listed companies on the Nairobi Securities Exchange over the period 2015 to 2021. The 64 companies were analyzed using the census study. Data had been collected using a secondary data collection sheet. The study employed secondary data obtained from the published financial statements of the respective firms, from the Nairobi Securities Exchange and the Capital Markets Data. A panel regression model was employed in the analysis of data with the aid of the stata version 14. The study found out that Liquidity had a positive significant effect on the shareholders earnings. The study recommends that listed firms should enhance its liquidity by investing more on liquid assets. This should entail more investments in treasury bills, treasury bonds and other liquid stocks. They should also diversify their investments by investing in money markets. Additionally it should enhance its liquidity by controlling its overheads through getting rid of unnecessary expenses. Secondly, the listed firms need to expand its asset base.

Suggested Citation

  • Kirui Kipngetich Vincent & Dr. Onchangwa Gilbert, PhD, 2023. "An Assessment of Liquidity and Shareholders’ Earnings of Listed Firms at The Nairobi Securities Exchange, Kenya," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(5), pages 1341-1348, May.
    • Handle: RePEc:bcp:journl:v:7:y:2023:i:5:p:1341-1348
    as

    Download full text from publisher

    File URL: https://www.rsisinternational.org/journals/ijriss/Digital-Library/volume-7-issue-5/1341-1348.pdf
    Download Restriction: no
    File URL: https://www.rsisinternational.org/journals/ijriss/articles/an-assessment-of-liquidity-and-shareholders-earnings-of-listed-firms-at-the-nairobi-securities-exchange-kenya/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Bahaaeddin Alareeni, 2018. "The impact of firm-specific characteristics on earnings management: evidence from GCC countries," International Journal of Managerial and Financial Accounting, Inderscience Enterprises Ltd, vol. 10(2), pages 85-104.
    2. Abdullah Ibrahim Nazal & Fuad Al-Fasfus, 2018. "Impact of Liquidity Rules on Shareholders’ Returns in Jordan Islamic Bank," International Journal of Business and Management, Canadian Center of Science and Education, vol. 13(6), pages 225-225, April.
    3. Gul, Ferdinand A. & Fung, Simon Yu Kit & Jaggi, Bikki, 2009. "Earnings quality: Some evidence on the role of auditor tenure and auditors' industry expertise," Journal of Accounting and Economics, Elsevier, vol. 47(3), pages 265-287, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Garcia-Blandon, Josep & Argiles-Bosch, Josep Maria & Castillo-Merino, David & Martinez-Blasco, Monica, 2017. "An Assessment of the Provisions of Regulation (EU) No 537/2014 on Non-audit Services and Audit Firm Tenure: Evidence from Spain," The International Journal of Accounting, Elsevier, vol. 52(3), pages 251-261.
    2. Astrid Rudyanto, 2017. "Audit Firm Reputation versus Auditor Capability: Their Effect on Audit Quality in Indonesia," GATR Journals afr147, Global Academy of Training and Research (GATR) Enterprise.
    3. Alzoubi, Ebraheem Saleem Salem, 2018. "Audit quality, debt financing, and earnings management: Evidence from Jordan," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 30(C), pages 69-84.
    4. Liwei Shan & Albert Tsang & Xiaoxue Zhang, 2024. "Transporting Audit Quality Across Countries: Returnee CEOs and Audit Fees," Journal of Business Ethics, Springer, vol. 192(4), pages 845-874, July.
    5. Mehdi Nekhili & Fahim Javed & Haithem Nagati, 2022. "Audit Partner Gender, Leadership and Ethics: The Case of Earnings Management," Journal of Business Ethics, Springer, vol. 177(2), pages 233-260, May.
    6. Sherry Fang Li & Sherry Fang Li, 2020. "Cost Of Debt And Auditor Choice," Accounting & Taxation, The Institute for Business and Finance Research, vol. 12(1), pages 35-44.
    7. Ammar Ali Gull & Ammar Abid & Rashid Latief & Muhammad Usman, 2021. "Women on board and auditors’ assessment of the risk of material misstatement," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 11(4), pages 679-708, December.
    8. repec:mth:ijafr8:v:9:y:2019:i:1:p:450-461 is not listed on IDEAS
    9. Kamarudin, Khairul Anuar & Ariff, Akmalia M. & Jaafar, Aziz, 2020. "Investor protection, cross-listing and accounting quality," Journal of Contemporary Accounting and Economics, Elsevier, vol. 16(1).
    10. Timothy A. Seidel & Chad A. Simon & Nathaniel M. Stephens, 2020. "Management bias across multiple accounting estimates," Review of Accounting Studies, Springer, vol. 25(1), pages 1-53, March.
    11. Guanmin Liao & Mark (Shuai) Ma & Xiaoyun Yu, 2022. "Transporting transparency: Director foreign experience and corporate information environment," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(7), pages 1343-1369, September.
    12. Siew, Eu-Gene & Rosli, Khairina & Yeow, Paul H.P., 2020. "Organizational and environmental influences in the adoption of computer-assisted audit tools and techniques (CAATTs) by audit firms in Malaysia," International Journal of Accounting Information Systems, Elsevier, vol. 36(C).
    13. Ya-Fang Wang, 2020. "New Insights on Audit Quality," International Journal of Business and Economic Sciences Applied Research (IJBESAR), Democritus University of Thrace (DUTH), Kavala Campus, Greece, vol. 13(1), pages 21-28, April.
    14. Lonkani, Ravi, 2019. "Gender differences and managerial earnings forecast bias: Are female executives less overconfident than male executives?," Emerging Markets Review, Elsevier, vol. 38(C), pages 18-34.
    15. Arun, Thankom Gopinath & Almahrog, Yousf Ebrahem & Ali Aribi, Zakaria, 2015. "Female directors and earnings management: Evidence from UK companies," International Review of Financial Analysis, Elsevier, vol. 39(C), pages 137-146.
    16. Shailer, Greg & Wang, Kun, 2015. "Government ownership and the cost of debt for Chinese listed corporations," Emerging Markets Review, Elsevier, vol. 22(C), pages 1-17.
    17. Mohamed Khalil & Aydin Ozkan, 2016. "Board Independence, Audit Quality and Earnings Management: Evidence from Egypt," Journal of Emerging Market Finance, Institute for Financial Management and Research, vol. 15(1), pages 84-118, April.
    18. Sandeep Goel & Nimisha Kapoor, 2022. "Is earnings management related to board independence and gender diversity? Sector-wise evidence from India," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 19(4), pages 363-373, December.
    19. Giuseppe Iuliano & Gaetano Matonti, 2015. "Do big 4 audit companies detect earnings management and report it in the audit opinion? Empirical evidence from italian non-listed firms," ESPERIENZE D'IMPRESA, FrancoAngeli Editore, vol. 2015(2), pages 5-43.
    20. Fung, Simon Y.K. & Goodwin, John, 2013. "Short-term debt maturity, monitoring and accruals-based earnings management," Journal of Contemporary Accounting and Economics, Elsevier, vol. 9(1), pages 67-82.
    21. Nooraisah Katmon & Omar Al Farooque, 2017. "Exploring the Impact of Internal Corporate Governance on the Relation Between Disclosure Quality and Earnings Management in the UK Listed Companies," Journal of Business Ethics, Springer, vol. 142(2), pages 345-367, May.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bcp:journl:v:7:y:2023:i:5:p:1341-1348. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dr. Pawan Verma (email available below). General contact details of provider: https://rsisinternational.org/journals/ijriss/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.