Working Capital Management and Financial Sustainability of Commercial State Corporations in Kenya

The economic development of Kenya substantially depends on Commercial State Corporations which supply vital infrastructure and energy and transportation services. However, many Commercial State Corporations face financial sustainability challenges due to rising debt levels and operational inefficiencies. The Auditor General's 2024 report highlights deteriorating financial stability in key Commercial State Corporations, evidenced by declining interest coverage ratios and rising interest expenses. Despite the recognized importance of working capital management in ensuring financial sustainability, limited empirical studies have explored its effect on Commercial State Corporations in Kenya. This study aimed to examine the effect of working capital management on the financial sustainability of commercial state corporations in Kenya. The study was guided by the following specific objectives: to determine the effect of cash management, accounts payable management and accounts receivable management on financial sustainability.