📄 Abstract
The purpose of this study was to investigate the effect of debt on the financial performance of tea companies in Kenya. The study was grounded on Static Trade-Off Theory of Capital Structure. An explanatory research design was adopted, targeting three multinational tea companies located in Kericho County, with a census approach employed to include all tea factories in the study. Secondary data were primarily sourced from the financial statements of these companies, collected using documentary guides and data sheets. Descriptive statistics, such as frequencies, mean, and standard deviation, alongside regression analysis, were used to analyze the data. The results from correlation analysis indicated a negative correlation between debt financing and return on assets. The study concluded that debt financing had a significant influence on the financial performance of tea companies in Kericho County. Consequently, the study recommended that tea companies should aim to determine an optimal capital structure that minimizes capital costs and maximizes returns. This could involve a balanced strategy in leveraging debt and equity to finance operations and growth, thereby enhancing their financial performance.
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📚 How to Cite:
Josphat Kipkurui Mibei, Dr. Vincent Shiundu , EFFECT OF DEBT FINANCING ON THE FINANCIAL PERFORMANCE OF TEA COMPANIES IN KERICHO COUNTY, KENYA , Volume 11 , Issue 9, september 2024, EPRA International Journal of Economics, Business and Management Studies (EBMS) , DOI: https://doi.org/10.36713/epra18222