Effects of Retained Profits on Performance of Supermarkets in Trans Nzoia County, Kenya.

Abstract

This study analyzed effects of financing structure on financial performance of supermarkets. The study aimed to specifically determine the effect of retained profits on performance of supermarkets. The study was informed by Pecking Order Theory and Tradeoff Theory. The study adopted an explanatory research design to show cause effect relationship. The target population of this study was 210 comprising of 4 supermarkets operating within Kitale central business district. The study used simple random sampling of 137 respondents that were used in the study. Five points like at scale questionnaire was used to collect data. SPSS version 20 aided to analyze Quantitative data using descriptive statistical methods such as mean. Inferential statistic such as Pearson correlation coefficients r and multiple regression models was used. The study findings indicated that there is a significant relationship between retained profits and performance of supermarkets, (p<0.05). The study concludes that retained profit affect performance of supermarket through reinvestment. The study recommends that; the supermarkets should prioritize on the use of retained profits to increase stock.