The study sought to establish the relationship between debtors’ management, water loss management and financial performance of NWSC in the South Western Region of Uganda. The study adopted across sectional and correlation quantitative design using 97 respondents that were drawn from a population of 130 employees. The sample size was determined using Krejcie and Morgan Tables (1970). The data were tested for reliability and validity, analyzed using SPSS version 21 and results presented based on the study objectives. The correlation coefficient analysis revealed positive and significant relationships between debtors’ management, water loss management and financial performance of NWSC which implies that when one variable is improved it leads to improvement of the other. Furthermore, the hierarchical regression analysis indicates that debtors’ management combined with water loss management have a greater predictive potential on the financial performance (Adj R² of 0.380). However, it was further revealed that debtors’ management has a more direct effect on the financial performance based on the individual contribution (R Square Change). The management of NWSC should train all her commercial and technical field staff to ensure that they have the required knowledge, skills and abilities in debtors and water loss management to ensure that the best quality management mental solutions are effectively and efficiently employed to improve on financial performance. The managers and staff should build a strong relationship between the debtors and themselves by creating a strong trust and ensuring that clear and well explained procedures are maintained since this will increase on the compliance and it will turn improve on the financial position of the organization.

CHAPTER ONE

1.0 INTRODUCTION

1.1 Background to the Study

World over, the provision of Water and Sanitation services is intrinsically related to the sustainable development of every economy (Dahan and Kashiwase, 2016). Water lies at the heart of humanity’s social and economic transformations (Agnew and Woodhouse, 2010). Therefore, there is need for sustainable water management entities in every country to adequately provide such a resource. In Uganda, this mandate was entrusted to the National Water and Sewerage Corporation (NWSC), a state-owned utility that was established under the NWSC Act, Cap 317 (2000). The objective of the Corporation is to operate and provide water and sewerage services in areas entrusted to it under the Water Act, Cap 152 (2000). Indeed, one of the requirements for the NWSC to fulfill its mandate is provision of water supply and sewerage services on a sound commercial and financially viable basis. This implies that its financial performance must remain stable since it is paramount to sustainability.

Besides, Financial performance principally reflects business sector outcomes and its results show overall financial health of the sector over a specific period of time (Naz, Ijaz, & Naqvi, 2016). It therefore indicates how well an entity is utilizing its resources to maximize the shareholders wealth and profitability. This can be evaluated using various metrics such as Return on Investment (ROI), Return on Assets (ROA) and Average Return on Assets (AROA) among others (Nyangoma, 2012; Opanga, 2013 and Gatuhu, 2013). The NWSC has for overtime recorded an increasing trend in its financial performance but has consistently fallen short of its set targets. The corporation has not met its performance targets for revenues and profits in the last two financial years (NWSC performance report, 2017/2018). Existing studies have linked financial performance to debtors and water loss management, though not in isolation. For example, studies by Addaney, Awuah, & Afriyie, (2017) indicate that debtors management affects firm financial performance. Moreover, studies by Dong & Su, (2010)indicate that a firm’s profitability and liquidity are influenced by its debtors management strategies. Similarly, the works of Mburugu and Gekara (2016) indicate that there is a relationship between debtors’ management and firm financial performance and this is in agreement with works of Madegwa et al (2018), Kondo (2013) and Osoro et al. (2013).Moreover, theories such as the Operating Cycle Theory and the Cash Conversion Theory have also been used in previous studies to explain the relationships between debtors’ management practices and organizational financial performance. Hence this study will adopt the two theories to explain the relationships between the variables.

With the consistent trend of the corporation falling below its financial targets, the researcher suspects that this perhaps could be attributed to poor debtor’s management and water loss management gaps. Besides, extant literature has tended to partly associate financial performance of water utility companies to debtors and water loss management. Moreover, there is limited research explaining the same in NWSC Uganda and specifically to the NWSC branches operating in the South Western region. This therefore motivated the researcher to conduct this study.

1.2 Statement of the Problem

Although the NWSC has recorded an increasing trend in its financial performance over time, it has continuously fallen short of its set financial targets according to existing reports. In the financial year 2013/2014, it generated revenue of 88.1b against a target of 94.4b, profit after tax was 20.8b against a target of 21.6b and there was also a shortfall in the current assets by 4.1b (NWSC performance report, 2014). In the financial year 2017/2018, the target turnover was 390b against the actual of 387.8b while profit after tax target was 77.27b against the actual of 60.59b. This phenomenon has not been explained by the existing literature and remains a problem that needs attention if NWSC is to achieve good performance. Moreover, previous studies such as those conducted by Addaney (2016) and Kondo (2013) indicate that debtor’s management and water loss management are key factors towards financial performance of a water utility company but they don’t explain the same case in the context NWSC here in Uganda. Besides, there is limited research that has been carried out in Uganda to explore the causes of the declining financial performance of NWSC. The researcher therefore intends to investigate this matter in the context of NWSC Uganda, using NWSC branches operating in the South Western Region to contribute on bridging the gap.

1.3 Purpose of the Study

The purpose of the study was to examine the relationship between debtors’ management, water loss management and financial performance of NWSC in the South Western Region of Uganda

1.4 Specific Objectives of the Study

To establish the relationship between debtors management and financial performance of NWSC in the South Western Region of Uganda
To establish the relationship between water loss management and financial performance of NWSC in the South Western Region of Uganda

To establish the combined relationship between debtors management, water loss management and financial performance of NWSC in the South Western Region of Uganda

1.5 Specific Research Questions

What is the relationship between debtors’ management and financial performance of NWSC in the South Western Region of Uganda?
What is the relationship between water loss management and financial performance of NWSC in the South Western Region of Uganda?

What is the combined relationship between debtors’ management, water loss management and financial performance of NWSC in the South Western Region of Uganda?

1.6 Scope of the Study

1.6.1 Content Scope

The study was to investigate the relationship between debtor’s management, water loss management and the financial performance of NWSC in the South Western Region of Uganda. In breaking down this concept, three issues became of great concern to the researcher. First, debtor’s management as an independent variable was viewed in terms of debt collection, debt age analysis and disconnection notices given. Secondly, water loss management also as an independent variable was viewed in terms of illegal connections control, accuracy in meter readings and leakages & bursts detection. Finally, financial performance as a dependent variable was viewed in terms of profitability, revenue growth and liquidity.

1.6.2 Geographical Scope

The study was based on the National Water & Sewerage Corporation operational areas in the South Western towns of Lyantonde, Rushere, Mbarara, Bushenyi, Kamwenge, Ntungamo, Ruhama, Rukungiri, Kabale and Kisoro.

1.6.3 Time Scope

The study covered a time scope of one year since it focused on events happening in a point of time using a cross-sectional design. This time period was chosen because the time period given for study is one year which calls for cross-sectional design which allows collection of data at one point in time

1.7 Significance of the Study

The findings of the study will give an understanding to the management of NWSC on how debtors management and water loss management impact on the financial performance of NWSC
The findings of the study will be of significant help to the government, management consultants, academicians and researchers as a source of knowledge and this will be further important to policy makers, private water management organizations as they design debtors and water loss management policies aimed at enhancing financial performance

Academicians who wish to undertake further research on debtor’s management, water loss management and financial performance will also find the literature arising from this study to be of great value.

1.8 Conceptual Framework

Debtor’s Management

· Revenue collection

· Debtors age analysis

· Disconnection notices

Financial Performance

· Profitability

· Revenue growth

· Liquidity

Water Loss Management

· Illegal connections control

· Metering accuracy

· Leaks & bursts detection

Source: Developed by the researcher from reviewing past literature on this study: Mutikanga (2012), Mburugu and Gekara (2016), Nyangoma (2012)

The conceptual framework above shows debtor’s management and water loss management are independent variables while financial performance is the dependent variable. Good debtor’s management practices such as timely collection of revenues, aging of debtor’s and timely issuance of disconnection notices lead to improved financial performance. Similarly, well managed water losses such as controlling illegal connections, accurate metering and timely detection of leaks and pipe bursts save costs and improve the financial performance of an organization, and the reverse is true. Debtor’s management will be measured in terms of existing revenue collection strategies at NWSC, debt age analysis and issuing disconnection notices to customers who delay to pay their bills. On the other hand, water loss management will be measured in terms of existing controls towards illegal connections, accuracy in the metering as well as the detection of leaks and bursts in the piping system. Finally, financial performance will be measured by profitability, revenue growth and liquidity.

CHAPTER TWO

LITERATURE REVIEW

2.0 Introduction

This section involves an extensive review of the works of various scholars with specific emphasis on debtors’ management, water loss management and financial performance of NWSC in the South Western Region of Uganda. The relationships between the variables are also explored as per various scholars.

2.1 Theoretical Literature Review

2.1.1 Operating Cycle Theory

The Operating Cycle Theory was advanced by Groth(1992). This theory looks explicitly at current assets of which, debtor’s is a major component and gives income statement measures of a firm’s operating activities which includes production, distribution and collection. Debtors for instance are directly affected by the credit management policy of an organization and the frequency of converting these debtors into cash differ from one industry to another (Mugo, 2014). For instance, a liberal credit policy will increase the profitability of a firm at the expense of liquidity hence the need for tight balancing. The operating cycle theory is one of the very important theories in debtor’s management. It measures the efficiency of debtor’s management strategies and takes into cognizance the debtors related to working capital. The cycle traditionally commences from the receipt of raw materials to the collection of cash from debtors of the stock sales produced from those raw materials (Sugathadasa, 2018).

The traditional approach of relying on current or acid-test ratios as solvency indicators is quite defective compared to the operating cycle approach of relying on current or compared to the operating cycle approach where debtors and inventory turnover measures are incorporated as useful in liquidity management. This is quite clear because Average Collection Period (ACP) as a proxy for firms average debtors investment is converted to cash. One critical aspect to note is that changes in collection and credit policy have a direct effect on the balance of debtors outstanding, in relation to annual firm`s sales (Richard & Laughlin, 1980). According to operating cycle theory, when firms grants more liberal credit terms to its customers there is a higher tendency of having a bigger, but ultimately less liquid investment in cycle (that is, the inventory turnover); this shows the number of times with which business firms converts the totality of their raw materials stock, their work-in-progress and ultimately the finished goods into product sales.

Understanding an organizations operating cycle therefore helps the firm to effectively and efficiently collect from its debtors by applying various strategies and this would enhance its financial performance. This theory will therefore inform the study by checking the NWSC operating cycle, looking at the different strategies used in debtor’s management in the aspect of revenue collection, analysis of the age of the debtors as well as management of its disconnections (Sweetman, 2000).

2.2 The Cash Conversion Cycle Theory

The Cash Conversion Cycle theory approach was developed by Richards and Laughlin in 1980. In their work, the duo saw the need to have a critical look at working capital management and its individual components. They felt that although a substantial portion of financial manager`s time is spent on decision relating to short-term assets and liabilities, little attention has been given by most of the literature and researchers in this direction (Oseifuah, 2016). Accordingly, they describe the debtors, inventories and payables as the constituents of the cash conversion cycle model.

The theory of the cash conversion cycle centers on explaining a cycle that begins from the payment for the purchase of raw materials, through to its transformation and the emergence of new product, to the collection of receivables from the buyers and possible debtors of the interaction as a result of the stock sale (Wang, 2017). Undoubtedly, financial managers and all related financial analysts appreciate at least at an intuitive level that all working capital investments do not have the same life expectancy, and their transformation rate to usable flows of liquidity is always not at the same speed (Richard & Laughlin, 1980).

Therefore, in the overall, one can conveniently say that the cash conversion cycle theory is the most central one in explaining debtor’s management as it is concerned with all the concepts and components, ranging from raw materials to finished products, and outputs representing inventory levels, to receivables and payment representing the cash aspect. This theory will form the study in a sense that having an effective cash conversion cycle would tackle the question of debtor’s management in terms of revenue collected and age of debtors which would boost the liquidity levels of the firm and generally the financial performance (Panigrahi, 2013).

2.3 Empirical Literature Review

2.3.1 The Concept of Financial Performance

The financial performance of an organisation is a general measure of a firm’s overall financial health over a given period of time (Nyangoma, 2012). It can be reflected in the firm’s profitability measured by different metrics such as Return on Investment (ROI), Return on Assets (ROA) and Average Return on Assets (AROA). Maintaining optimal liquidity demonstrates that there are economies of scale associated with the cash levels required to confront the normal transactions of the firm. Revenue growth is often used as a measure of performance and it is argued that if revenues increase, profits will eventually follow. Information on financial performance is useful in predicting the capacity of the enterprise (Opanga, 2013).According to the Institute of Cooperate finance (2018), Return on Investment (ROI) is a financial performance measure used to evaluate the efficiency of an investment or compare the efficiency of a number of different investments. ROI tries to directly measure the amount of return on a particular investment, relative to the investment’s cost. ROI is a popular metric used as a measure of a company’s profitability.

Liquidity is important the proper functioning of financial markets and the business sector (Hiadlovský, et al., 2016). Before the financial crisis, financial intermediaries were stable as funding was readily available and at low cost. The rapid reversal in market conditions illustrated how quickly liquidity can evaporate, and that illiquidity can reserve already earned profits as financial institutions and businesses are either forced to sell assets well below their market value or borrow at interest rates charges above their weighted return on assets(Marozva, 2015). Though insufficient liquidity is one of the major reasons for bank failures, holding liquid assets has an opportunity cost of higher returns. The liquidity crisis significantly affected banks’ operational environment. In response to the catastrophe, financial bodies such as the Basel Committee for bank supervision advocated for the active management of liquidity risk. Liquidity and profitability are inversely related, when liquidity increases profitability decreases and vice versa while on the other hand, there is a direct relationship between higher risk and higher return, hence the dilemma in liquidity management is finding a balance between liquidity and profitability (Adler 2012).

Revenue growth from sales does not always mean more profit. Revenue is only part of the story. Revenue minus expenses equals profit. A business must keep their costs as low as possible to make sure it is maximizing its profits (Rwakakamba, 2011). Revenue growth management is an important approach to optimizing a company’s sales and marketing interactions with potential buyers across a revenue cycle by transforming their approach to people, processes, and technology. Done correctly, it can have a hugely positive effect on marketing ROI and result in considerable top-line growth (Hansen & Mowen, 2005). .A data-intensive approach, RPM requires collecting and analyzing huge amounts of data to learn about your approach to sales and marketing drives or impedes revenue. Implementing revenue performance management typically leads to alterations to the tools used by your teams and improvement in communication between them.

2.3.2 Debtors Management and Financial Performance

All organizations need capital to run their operations (Pasban & Nojedeh, 2016). Generating capital through debtor’s management systems has become a necessity for the growth of every organization (citation).According to the Investment Hand book (2010), advances that debt is the amount of monies incurred during a business period which payable to the organization is providing goods and services. Aspen Law and Business book depository defines debt as an amount owed to a person or organization for funds borrowed or for goods sold on credit. For the purposes of this study, debt is defined as any amount due to any organization for which payment has not been effected. Addaney (2016) argues that debtor management is any approach that is adopted to guide an individual or business organization to manage its debtors. This definition includes debt recovery, bankruptcy, debtor’s consolidation as well as other techniques that assist businesses to collect from outstanding debtors.

Debtor’s management is an act of trying to get one’s debtors under control and become responsible for repaying associated obligations (Addaney, 2016). It can therefore be inferred that debtors management is a conscious measure taken by an organization or agents hired on their behalf to reduce the debtors burden or strategize to eliminate the debtors through acceptable payment terms. (Cecchetti et al. (2011) observe that a reasonable debtor’s level improves welfare and enhances growth but high level debtors can lead to a decline in growth of a firm.

Reinhart (2015) reinforces this assertion by arguing that properly managed debtors impact positively to the performance of a firm only when it is within certain levels. He opines that an organization becomes vulnerable to financial crisis when the ratio goes beyond certain levels. Stern Stewart and Company shares a similar view that high level of debtors increases the probability of an organization facing financial distress (Addane,et al., 2016). Specifically, on the nexus between debtor management and performance of organizations, the findings from the literature analysis show that debtor’s management plays an important role in any organization (Wekesa, 2018). Thus prudent debtor’s management ensures that organizations are able to improve their performance. A similar study by Dong & Su (2010) concluded that a firm’s profitability and liquidity are influenced by its debtor management practices.

2.3.3 Water Loss Management and Financial Performance

A well-established water loss management system improves the financial performance of any water management company (Souzaa & Silva, 2013). This is mainly because it saves the company from unnecessary revenue loss through the lost water. According to Kingdom et al. (2006), about 30000ML of water is delivered to customers in the developing countries per day, but is not paid for because of water theft, employee’s corruption and poor metering practices. They estimate that about US$3billion of revenue is lost per year in the developing countries due to commercial losses. They go on to conclude that the ﬁnancial viability of utilities in developing countries is constrained as a result and this hampers necessary service expansions especially for the poor (United Nations, 2009). This clearly demonstrates that a well-established and functioning system of managing water loss would improve the financial viability of a utility company which justifies that there is a positive relationship between water loss management and financial performance.

2.3.4 Debtors Management, Water Loss Management and Financial Performance

Debtor’s management is the method by which you collect and control the payments from your customers. Gatuhu (2013) describe credit management as methods and strategies adopted by a firm to ensure that they maintain an optimal level of credit and its effective management. It is an aspect of financial management involving credit analysis, credit rating, credit classification and credit reporting. A proper credit management will lower the capital that is locked with the debtors, and also reduces the possibility of getting into bad debts.

Effective management of accounts receivables involves designing and documenting a credit policy. A sound credit policy is the blueprint for how the company communicates with and treats its most valuable asset, the customers. Mwangi (2013) proposes that a credit policy creates a common set of goals for the organization and recognizes the credit and collection department as an important contributor to the organization’s strategies. The water service providers lose considerable quantity of water on a daily basis caused by water leakages during pumping, storage, transmission in the main pipes or in distribution networks, thefts or illegal connections and metering inaccuracies. On the other hand, water service providers may not count, or bill, the quantity consumed by particular entities; such as government and public utilities.

Therefore, the total of non-revenue water can be viewed as the aggregate of leakages, illegal connections, metering inaccuracies, and unbilled consumption (Makaya, 2016). This leads to a reduction in the expected water sales for the service providers and increasing the water production quantities to cover the lost volume. From a financial point of view, the quantities of non-revenue negatively affect water service providers on three scales. They reduce the operating revenue, increase the cost of production, operations and maintenance and increase investment provisions and budget allocation for capital expenditures as additional amount have to be spent on investment in facilities which all affect the financial performance of the service provider.

CHAPTER THREE

RESEARCH METHODOLOGY

3.0 Introduction

This section presents the research methods that were used to carry out the study. It covers the research design, study population, sampling design, data collection methods, measurement of variables, reliability and validity tests, data analysis & tests and anticipated limitations.

3.1 Research Design

The researcher used a cross-sectional research design. This is a type of design where data is collected at one point in time. For this study, the researcher followed the cross-sectional research design because the design provides a snapshot of the distribution of factors and outcomes in the population at a specified period of time and the prevalence of the specific factors and outcomes that can be calculated for the population and the levels of exposure to factors and outcome status can be easily compared (Kothari 2014). The researcher adopted the quantitative approach. This is a kind of approach that enables researchers to express their findings in numeric terms. This approach was adopted because the research objectives were accurately answered following the quantitative approach

3.2 Study Population

The target population under study was from 10 NWSC offices situated in the South Western Region of Uganda. These were considered because they are deemed to possess adequate information about the variables under study. According to NWSC, there are 10 main water offices in the South Western region and on average, the researcher targeted 13respondents from different sections of each main office, making a target study population of 130 respondents.

The unit of analysis was National Water and Sewerage Corporation (NWSC) branches in south western Uganda while unit of inquiry was the different employees in the categories of commercial officers, accounts and finance officers, billing officers, area engineers, area managers and branch managers.

3.3 Sampling Method, Procedure and Size

The study was based on a sample size of 97 respondents that was drawn from a population of 130 employees. The sample size was determined using Krejcie and Morgan Tables (1970). The researcher used purposive simple random sampling techniques to select the respondents.

Table 3.1:Sample Distribution
Category	Total population	Samples
Area Managers	10	7
Branch Managers	10	7
Area Engineers	10	7
Commercial Officers	30	23
Accounts & Finance Officers	30	23
Billing Officers	40	30
Total	130	97
*Source: NWSC, 2019*

3.4 Sources of Data

3.4.1 Primary Data

Primary data was obtained from employees of NWSC in the categories of Area Managers, Branch Managers, area engineers, Commercial Officers, Accounts & Finance and Billing officers, who filled in the questionnaires administered to them.

3.4.2 Secondary Data

This was obtained from the available literature; journals, textbooks, articles, reports, newsletters and other available records on small business enterprises. The data was then analyzed, interpreted and evaluated by the researcher in line with the study variables before being presented in the report.

3.5 Data Collection Instrument

The key data collection instrument that was used is the questionnaire. The questionnaire was used in light of the fact that the data was gathered from a large sample in a brief time frame since the respondents were able to read and compose (Bill, 2011). The questionnaire comprised of closed-ended questions purely structured in nature whose variables were measured on a 5-point Likert scale (5 strongly Agree, 4 Agree, 3 Not sure, 2 Disagree and 1 strongly Disagree) in order to gather the different perceptions and views of the respondents to answer the questionnaire.

3.6 Measurement of Variables

As explained in the conceptual framework, the independent variables were debtor’s management and water loss management while the dependent variable was financial performance. These variables were measured using factors drawn from existing literature and theories. All the constructs and sub constructs were anchored on a 5 point Likert scale ranging from 1= Strongly Disagree to 5 = Strongly Agree. The respondents were required to indicate the extent to which they are in agreement with the prescribed items using their perceptions.

Table 3.2: Measurement of Variables

Concept	Definition and Measurement	Author (s)
Debtors Management	The methods by which NWSC collects and controls its debtors in terms of revenue collection, debt age analysis and disconnection notices. There is a debt collection policy at NWSC offices	Kariuki, 2010; Byusa and Nkusi, 2012
Water Loss Management	The way in which NWSC manages the quantity of water difference between its supply and consumption throughout the distribution system in terms of controlling illegal connections, managing the metering accuracy and detecting of leaks and bursts. The company has controls to reduce illegal connections	Mutikanga, 2012; Water Board, 2019
Financial Performance	The general measure of NWSC’s overall financial health over a given period of time in terms of Profitability, Revenue growth and Liquidity. We always meet our profitability targets	Thomas, 2007; Nyangoma, 2012; Opanga, 2013
*Source: Secondary Data, 2019*

3.7 Reliability Tests

Reliability assesses the extent to which the factors in a questionnaire generate consistent responses over several trials with different populations in the same setting or circumstances (Miles & Huberman, 1994).Reliability test indicates the extent to which the questionnaire was without bias or error free, and hence ensures consistent measurement across time and across the various factors in the questionnaire. In this study, Cronbach’s alpha coefficient was employed to determine the internal consistency of the 5-point scale used to measure the items of the study variables (Cronbach, 1951). According to Field (2006), a certain number of items that were found to affect the reliability of the scales were deleted to improve the reliability. According to Sekaran (2003), some professionals as a rule of thumb, require a reliability of 0.70 or higher (obtained on a substantial sample) before they use an instrument. Upon performing the test, the results that were 0.7 and above were considered reliable.

3.8 Validity Tests

Validity is the extent to which research instruments measure what they are intended to measure (Saunders et al., 2003). According to Sekaran (2000), content validity test ensures that the measures include an adequate and representative set of items that tap the concept. The more the scale items represent the domain of the concept being measured, the greater the content validity. The test was conducted at the questionnaire development stage where the draft questionnaire was given to four different experts (2 academicians and 2 practitioners) to assess the appropriateness of the items to capture the study variables. Validity was determined using Content Validity Index (CVI).

CVI = Number of items rated relevant x 100%

Total number of items

As recommended by Saunders et al. (2003), for the instrument to be valid, the CVI should be at least 0.7

Table 3.3: Validity and reliability results

Variable	CVIs	Cronbach’s Alpha	No of Items
Debt management	0.874	0.854	30
Water Loss Management	0.965	0.857	30
Financial Performance	0.774	0.951	30

Source: Primary Data, 2020

3.9 Data Processing, Analysis and Presentation

Data processing: from the field, data to verify, organize, transformed and extract data in an appropriate output form ready for analysis. This involved Tabulating, sorting, editing, classifying and coding. In addition, this step involved checking for missing values and outliers as below;

Detection of Outliers

Outliers are values that are out of the range compared to the measurement scale (Ong and Puteh, 2017). An outlier check was conducted using minimum and maximum frequency counts, means and scatter plots. A few identified outliers were due to data entry error and they were traced and corrected.

Missing Value Analysis (MVA)

Data can be missing at the point of questionnaire filling or data entry and if not handled, it distorts the analysis and results. MVA helps address several concerns caused by incomplete data (Ong and Puteh, 2017). Thus, MVA in this study was performed to establish whether there was any missing value and the respective magnitude of how data was missing and deciding how to deal with the missing values. Also, missing data may reduce the precision of calculated statistics because there is less information than originally planned.

After running descriptive statistics, the missing data were identified, and it was established that the omissions were made by respondents and not at data entry point. It was further established that the missing data constituted less than 1% of the data; and thus, considered too small and could not suppress the standard deviation (Field, 2009). Nonetheless, the missing data were replaced using the linear interpolation method. The cleaned data was summarized and converted into frequencies and percentages using the category system. The researcher then used Statistical Package for Social Scientists to (SPSS), version 26, to analyze the data collected. The data analyzed was presented using frequency distribution tables for easy interpretation. Pearson’s Correlation Coefficients was run to establish the relationship among the study variables as set in the objectives.

3.10 Ethical Considerations

The researcher acquired an introduction letter from the University together with the identity card presented to the organizations under study as well as the respondents. Assurance was made to management and staff that the information needed was for academic purposes and would be handled with confidentiality. The assent issue was resolved by obtaining an informed consent informing target respondents of the purpose of the study, the expected participation from them and any other information about the research that they would want to know. Confidentiality of the respondents was paramount except in the case where they would give permission to be cited in the study.

CHAPTER FOUR

PRESENTATION, ANALYSIS AND INTERPRETATION OF FINDINGS

4.0 Introduction

This chapter covers the data analysis performed, their presentation and interpretation. It focused on establishing the relationship between debtors’ management, water loss management and financial performance of NWSC in the South Western Region of Uganda. Although the targeted sample size was 97 respondents, only 95 respondents filled and returned the questionnaires, which gave a response rate of 98%.

4.1 Demographic Characteristics of Respondents

Demographic characteristics captures data on respondents by gender, age group, level of education, among others. Demographic characteristics were important to determine the respondents’ ability to participate in the study and provide valid and reliable data. The results are presented as follows:

Distribution by Gender of the Respondents

The gender of the respondents was distributed as indicated in table 4.1

Table 4.1: Gender of the respondents

*Item*	*Frequency*	*Percent*
Male	57	60.0
Female	38	40.0
Total	95	100.0

Source: Primary Data, 2020

The results in table 4.1 indicate that majority of the respondents were male (60%) and female were (40%). This means that males tend to take part more in NWSC than females because most of the activities in the national water requires men than women since they are more technical. And this calls for a need to involve more women in the finance participations for gender equality.

Distribution by Age bracket of the respondents

The age bracket of the respondents was distributed as indicated in table 4.2

Table 4.2: Age bracket of the respondents

*Item*	*Frequency*	*Percent*
18-27	12	12.6
28-37	38	40.0
38-47	32	33.7
48-57	13	13.7
Total	95	100.0

Source: Primary Data, 2020

The results in table 4.2 indicate that majority of the respondents were between 28-37 years(40%), these were followed by 38-47(33.7%) and the least group were those who were between 18-27 years (12.6%). These findings imply that NWSC in western Uganda has employee who are mature enough with good experience in executing their duties and this results in to financial performance

Distribution by the level of education

The education level of the respondents were distributed as indicated in table 4.3

Table 4.3: Education level of the respondents

*Item*	*Frequency*	*Percent*
Diploma	7	7.4
Bachelor	62	65.3
Post graduate	26	27.4
Total	95	100.0

Source: Primary Data, 2020

The results in the table 4.3 indicate that the majority of the respondent are degree holders (65.3.0%), these were followed by those who had studied beyond bachelor’s degree (post graduate) (27.4%) and the least group were diploma holders (7.4%). This imply that most of the employees are well educated and they have the right knowledge and skills which help them to do their allocated duties which results in to improved productivity hence increased financial performance

Distribution by time period spent by the branch of NWSC

The existence of the branch was distributed as indicated in the table 4:4.

Table 4.4: Period spent by the branch of NWSC

*Item*	*Frequency*	*Percent*
Less than a year	1	10.0
1 – 5 years	3	30.0
5 – 10 years	6	60.0
Total	10	100.0

Source: Primary Data, 2020

The findings in the table 4:4 indicate the majority of the MWSC branches has spent 5-10 years (60%), these were followed by those which had spent between 1-5 years (30.0%)and the least group had spent less than a year (10%). This implies that most of the branches enjoy the economies of scale which reduces the cost of providing water to the citizens’ hence increased financial performance.

Correlation results

The Pearson correlation was used to examine the relationship between debtors’ management, water loss management and financial performance since based on the quantitative data, Pearson correlation is the best method

Table 4.5: Pearson correlation results

*Variable*	1	2	3	4	5	6	7	8	9	10	11	12
Debt Collection(1)	1
Debt Age Analysis(2)	.719^**	1
Disconnection Notices(3)	.716^**	.810^**	1
Debtors Management(4)	.600^**	.911^**	.924^**	1
Illegal Connections Control(5)	-.059	-.013	.021	-.020	1
Accuracy of Meter Readings(6)	-.096	.010	-.010	-.039	.377^**	1
Leaks & Bursts Detection(7)	.021	.077	.096	.070	.378^**	.681^**	1
Water Loss Management(8)	-.063	.024	.038	-.003	.768^**	.639^**	.509^**	1
Profitability (9)	.388^**	.454^**	.454^**	.472^**	.132	.249^*	.517^**	.343^**	1
Revenue growth (10)	.385^**	.411^**	.354^**	.418^**	.143	.283^**	.514^**	.362^**	.525^**	1
Liquidity (11)	.372^**	.583^**	.550^**	.542^**	.121	.228^*	.444^**	.305^**	.605^**	.799^**	1
Financial Performance(12)	.409^**	.517^**	.487^**	.512^**	.141	.270^**	.527^**	.360^**	.546^**	.630^**	.627^**	1
**. Correlation is significant at the 0.01 level (2-tailed).
*. Correlation is significant at the 0.05 level (2-tailed).

Source: Primary Data, 2020

The relationship between debtors’ management and financial performance of NWSC in the South Western Region of Uganda

The results in table 4.4 show that there is a positive significant relationship between debtors’ management and financial performance of NWSC in the South Western Region of Uganda (r=.512^**, p≤.01). This means that any positive change in debtors’ management is associated with a positive change in financial performance of NWSC. In other words improvements in debtors’ management such as debt collection, debt age analysis and disconnection notices are associated with an improvement in financial performance of NWSC in the South Western Region of Uganda.

The relationship between water loss management and financial performance of NWSC in the South Western Region of Uganda

The results in table 4.4show that there is a positive significant relationship between water loss management and financial performance of NWSC in the South Western Region of Uganda (r=.360^**, p≤.01). This means that any positive change in water loss management is associated with a positive change in financial performance of NWSC. In other words improvements in water loss management such as illegal connections control, Accuracy of meter readings and leakages and bursts detection are associated with an improvement in financial performance of NWSC in the South Western Region of Uganda.

The combined effect of debtor’s management and water loss management and financial performance of NWSC in the South Western Region of Uganda

To examine the combined effect of the two independent variables (debtor’s management and water loss management) to the dependent variable (financial performance), the researcher used the hierarchical regression since it helps in explaining the combined effect of the two independent variables to the dependent, it shows the direction of the relationship and also brings out clearly the individual contribution of each independent variable to the dependent

Table 4.6: Hierarchical regression results

	Model 1			Model 2			VIF
	B	SE	β	B	SE	Β
(Constant)	1.763	.297		.530	.388
Debt management	.540	.094	.512**	.541	.086	.513**	1.000
Water loss management				.328	.074	.362**	1.000
R		.512			.627
R Square		.262			.393
Adjusted R Square		.252			.380
R Square Change		.262			.131
F Change		33.03			19.809
Sig. F Change		.000			.000
Dependent Variable: Financial Performance; N=95; regression is significant at 0.05; *regression is significant at 0.01

Model One

The results in model one indicate that 26.2% (R Square Change=.262) of the variations in the financial performance of NWSC in the South Western Region of Uganda is explained by debtor’s management. The results further indicated that a unit increase in debtor’s management will result in to 0.513 units (Beta=.513, p<.01) increase in financial performance of NWSC holing other factors constant.

Model Two

The results in model two indicate that 13.1% (R Square Change=.131) of the changes in financial performance of NWSC is explained by water loss management. In addition the results indicate that a unit increase in water loss management will result in to 0.362 units (Beta=.362, p<.01) increase in financial performance of NWSC holding other factors.

Finally the results in the regression model further explain that, the combined effect of debtor’s management and water loss management explain 38% (Adjusted R Square=.380), meaning that the remaining 62% is explained by other variables not considered in this study. It should be further noted that debtors’ management explains much of the variations in financial performance than water loss management as explained by the individual contribution (R Square Change)

CHAPTER FIVE

DISCUSSIONS, CONCLUSIONS AND RECOMMENDATIONS

5.0 Introduction

This chapter discusses all the findings reported in chapter four based on the research questions and objectives, draws conclusions and suggests recommendations for the findings, limitations of the study and also proposes some areas for further research.

5.1 Discussion of Results

The discussion of results followed the objectives of the study which include the relationship between debtor’s management and financial performance, the relationship between water loss management and financial performance and the combined relationship between debtor’s management, water loss management and financial performance of NWSC in the South Western Region of Uganda.

5.1.1The relationship between debtors’ management and financial performance

The findings indicated a positive significant relationship between debtor’s management and financial performance of NWSC in the south western region of Uganda. The findings mean that when there is improvement in debtors’ management in terms of debt collection, debt age analysis and disconnection notices, this will improve financial performance in NWSC. In addition, when there is a debt collection policy, team responsible for debt collection, debt collectors are always in touch with customers, NWSC has a competent debt collection team, there are clear debt collection guidelines in place, this will improve financial performance. This is also in line with the Investment Hand book (2010), advances that debt is the amount of monies incurred during a business period which payable to the organization providing goods and services. Aspen Law and Business book depository defines debt as an amount owed to a person or organization for funds borrowed or for goods sold on credit. For the purposes of this study, debt is defined as any amount due to any organization for which payment has not been effected. Addaney (2016) argues that debtor’s management is any approach that is adopted to guide an individual or business organization to manage its debtors. This definition includes debt recovery, bankruptcy, debtor’s consolidation as well as other techniques that assist businesses to collect from outstanding debtors.

Furthermore, when NWSC are skilled in planning, supervision, when they have access to new technologies, and have the skill in reducing the lead times, this will increase their performance. Finally abilities of the NWSC in handling the problems, when they have a sense of responsibility of the purchasing staff, and ability in conducting risky and ambivalent purchases, this will improve their performance.

The findings are in agreement with the findings of Addaney (2016) who found out that “debtors management are considered to be composed of the revenue collection, debtors age analysis and disconnection notices. That is associated with high performance on the job at an individual level.” Revenue collection can be defined as “taxes from different organization,” Debtors age analysis can be described as analyzing the debtors age,” and disconnection notices can be described as “notifying the staff on any disconnections to be made in advance.” Oseifuah, 2016). Moreover, the lack of appropriate debtor management, revenue collection, and debtor age analysis can lead to delays or even halt the business. This being the case, development of debtor’s management should be included in the long-term planning (Peltola, 2010). The significance of specific debtor’s management and water loss management is obvious. Indeed, numerous studies have already measured and evaluated resources and skills of consumers very extensively, using data related to aspects such as organizational resources and reputation (Kraatz and Zajac, 2000), property rights (Miller and Shamsie, 1998) and market shares (Cecchetti et al. (2011)

5.1.2The relationship between water loss management and financial performance

The findings of the study indicated a significant positive relationship between relationship between water loss management and financial performance. It can be observed that, when there is an improvement in the elements of illegal connections control, leaks and bursts control and metering accuracy there is much improvement in financial performance. This can be done through encouraging consumers to stay within the terms of contracts. A well-established water loss management system improves the financial performance of any water management company. These findings are in line with Souzaa & Silva, (2013) who found out that water loss management saves the company from unnecessary revenue loss through the lost water. According to Kingdom et al. (2006), about 30000ML of water is delivered to customers in the developing countries per day, but is not paid for because of water theft, employee’s corruption and poor metering practices. They estimate that about US$3billion of revenue is lost per year in the developing countries due to commercial losses. They go on to conclude that the ﬁnancial viability of utilities in developing countries is constrained as a result and this hampers necessary service expansions especially for the poor (United Nations, 2009). This clearly demonstrates that a well-established and functioning system of managing water loss would improve the financial viability of a utility company which justifies that there is a positive relationship between water loss management and financial performance

5.1.3 The combined relationship between debtors’ management, water loss management and financial performance

From the findings, debtors’ management and water loss management are very important since they explain much of the variations in the financial performance. This was indicated by a higher explanatory power of 38%. This implies that when there is good debtor management in terms of revenue collection, debtor age analysis and disconnection notices, this will enable them to perform efficiently and effectively. In addition when there is a good water loss control in terms of illegal connections control, leaks and bursts control and metering accuracy, this will improve financial performance.

The findings are in agreement with Gatuhu (2013) describe credit management as methods and strategies adopted by a firm to ensure that they maintain an optimal level of credit and its effective management. It is an aspect of financial management involving credit analysis, credit rating, credit classification and credit reporting. A proper credit management will lower the capital that is locked with the debtors, and also reduces the possibility of getting into bad debts.

5.3 Conclusions

This study was undertaken to identify how debtors’ management and water loss management impacts on financial performance of NWSC branches in the south western region of Uganda. While broader institutional-level decisions need to be undertaken for incentivizing water service providers to become more financially accountable, there are some interventions targeting reduced commercial losses that need to be undertaken at the provider level to produce revenue enhancements that will contribute in bringing about sustained improvement of services and these are resolved below:

Debtors’ management and financial performance

Based on the findings of the study, debtor’s management is a key factor that positively affects the financial performance of an organisation. It can be concluded that when an organisation has a stringent debtors’ management policy that is focused on intensive collections from customers, proper aging of debtor’s as well timely issuance of notification orders, customers will be able to pay their bills in time and this will improve the liquidity, profitability and revenue growth of an organisation. Conversely, if the organisation has a relaxed policy, there is likelihood for debtors to default and this will slow down revenues, profits and liquidity levels.

Also, strong elaborate debtors’ follow-up procedures on the delayed payments, staff competency and integrity in adhering to the debtors’ collection policy, formulation, implementation and regular review of debtors’ collection policy have been observed to be crucial while managing debtors. The study further found that debtor’s management impacts greatly on organisation performance with majority of the respondents holding the view that appropriate debtors’ management practices leads to the success of their organisation. This study therefore adds new insight into the existing literature on debtors’ management.

Water loss management and financial performance

Water loss management is very important in improving financial performance since according to the results, there is a confirmed positive significant relationship between the two variables which means that when one variable improves, the other will also improve. In addition, water loss management can be improved by building illegal connections control, leaks and bursts control and metering accuracy and ensuring that compliance with the procedures and quality is followed. As a result, the water saved will be turned into revenue which will improve liquidity levels and profits of the organization leading to improved financial performance. Moreover, using the water loss management strategies above, the organization will be able to benchmark and track their progress towards target goals and become better stewards of their financial resources. Generally, decreasing water loss is cost effective, but several factors need to be considered when evaluating the cost benefit analysis for a specific water system. Therefore, water system managers must decide the level of financing investment that result in a positive ROI (AWWA 2009)

Combined effect of debtor’s management and water loss management relationship on financial performance

The findings show that both independent variables have a positive significant relationship with the financial performance of NWSC. This also means that any positive change in any of these variables will result in a positive change in the financial performance of the sector . Much emphasis should be on effective management of accounts receivables which involves designing and documenting a credit policy. A sound credit policy is the blueprint for how the company communicates with and treats its most valuable asset, the customers. Mwangi (2013) proposes that a credit policy creates a common set of goals for the organization and recognizes the credit and collection department as an important contributor to the organization’s strategies. The water service providers lose considerable quantity of water on a daily basis caused by water leakages during pumping, storage, transmission in main pipes or in distribution networks, thefts or illegal connections and metering inaccuracies. On the other hand, water service providers may not count, or bill, the quantity consumed by particular entities; such as government and public utilities.

5.4 Recommendations

The research recommends the management of NWSC to train all her commercial and technical field staff to ensure that they have the right and the required knowledge, skills and abilities in debtors and water loss management, to ensure that the best quality management mental solutions are effectively and efficiently employed to improve on financial performance.

There is need to have a debt collector. Area managers should define detailed statements indicating its collection procedures, due dates, grace periods, penalties, date of turnover of delinquent account to a collection agency and make customers aware of the details of the collection process to avoid penalties. This will reduce arrears and improve on revenue growth

The branch managers and commercial officers should build a strong relationship between the debtors and themselves by building a strong trust and ensuring that clear and well explained procedures are maintained by establishing debt collection policies that clearly outlines the top management’s view of business development priorities and the terms and conditions that should be adhered to since this will increase on the compliance. The debt collection policy should be reviewed and regularly updated to reflect changes in the economic outlook and evaluation of branches on debtors’ portfolio and be distributed to all commercial officers

NWSC should concentrate on controlling real water loss which refers to the amount of water physically lost from the distribution system, including leakage and overflows, apparent water losses which is the amount of water that is not properly measured, accounted or paid for, apparent losses can occur for a number of reasons including metering inaccuracies, unauthorized consumption and data handling errors. This can be handled through acquiring tools like real time dashboards, control panels and interactive reports can efficiently consolidate network maintenance information and statistical data on historical customer consumption.

These tools can be used to enable a statistical oversight of the operation based on organization recognized models. Finally, the predictor variables in the study account for 38% of financial performance. This covers all the two predictor variables of the study. However, the remaining percentage may be attributed to other factors outside this study. This is because financial performance is affected by other factors which differ from one NWSC to another. Thus, it is important to consider variety of factors than to focus only on the predictor variables in this study.

5.5 Limitations of the study

Limitations are weaknesses of a study related to the proposed sample, data collection environment, measurement techniques, and personal biases that may affect the quality of the results and credibility of the conclusions. During the research study, the researcher encountered the following challenges in carrying out the study for NWSC in the south western region of Uganda:

Response rate was slow as some respondents had fear to disclose some information as they took such information to be secrets of their respective institution. However, the researcher was carefully and tactfully interacted with respondents and managed to get the data of interest for the study and I believe future researchers can use the same technique to ensure that they collect data from such respondents.

Accessibility to most of places was difficult due to rainy season which affected the collection of data. The researcher ended up visiting few places than those that he would have visited due to the interference by the rain, this means that future researchers can try their level best to fix the right season on when to collect data or prepare money to use protective rain gadgets.

Formulation of research aims and objectives. The researcher might have formulated research aims and objectives too broadly. This required the researcher to specify in which ways the formulation of research aims and objectives could be narrowed so that the level of focus could be increased.

Implementation of data collection method: Because as a researcher, extensive experience was a requirement as a primary data collection there could be a great chance that the nature of implementation of data collection method could flawed.

Lack of previous studies in the research area: Literature review is an important part of any research, because it helped to identify the scope of works that had been done so far in research area. Literature review findings were used as the foundation for the researcher to be built upon to achieve her research objectives. However, there might had been little, if any, prior research on your topic if you had focused on the most contemporary and evolving research problem or too narrow research problem.

Limited willingness to respond to questionnaires by respondents because they found it as time consuming. The researcher tried to explain each question to simplify the complexity of the questions in the questionnaire.

5.6 Areas of further research

The study adopted a cross sectional design where data is collected at one point in time and the findings from such studies are always limited to the current period only hence future studies should look at a longitudinal research design where financial performance in NWSC in south western Uganda are monitored for a long period of time

The study was restricted to a quantitative approach using a structured questionnaire to elicit information from the respondents meaning that other features that can be observed were not included in the findings and thus future research should incorporate qualitative factors using for example observations and interview guide.
In this study, the variables debtor’s management and water loss management relationship contributed 38% towards financial performance, further research should explore other determinants of financial performance and if possible, variables that need to be combined with these variables in order to stimulate financial performance in NWSC in south western Uganda.

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QUESTIONNAIRE

MAKERERE UNIVERSITY BUSINESS SCHOOL

Questionnaire for the Research Study on “Debtor’s Management, Water Loss Management and Financial Performance of NWSC: A Case of South Western Region, Uganda”

Dear Respondent,

I am Francis Oluka a postgraduate student of Makerere University Business School conducting a research on “Debtors Management, Water Loss Management and Financial Performance of NWSC”. Kindly answer these questions as objectively as possible so that the results of the data analysis are fairly accurate. Thank you very much for your cooperation.

SECTION ONE: DEMOGRAPHICS OF RESPONDENTS

A1Gender of respondent: Male Female

A2 Age of respondent: 18-27 28-37 38-47 48-57 58+

A3Respondent’s level of Education:

PLE O-Level A-Level Diploma Degree

A4 For how long has NWSC been in existence?

Less than a year 1 – 5 years 5 – 10 years 10 years & above

SECTION TWO: DEBTORS MANAGEMENT

This section contains questions about Debtors Management. Debtors Management are looked at in terms of debt collection, debt age analysis and disconnection notices. In the tables below, the numbers 1-5 represent levels of agreement from strongly disagree to strongly agree. Please mark the given statements according to your level of agreement.

Levels of Agreement

Strongly Disagree	Disagree	Uncertain	Agree	Strongly Agree
1	2	3	4	5

Debtors Management

Debt Collection		1	2	3	4	5
DC1	There is a debt collection policy at NWSC offices
DC2	There is a team responsible for debt collection
DC3	Debt collectors are always in touch with our customers
DC4	As an organization, we have a competent debt collection team
DC5	There are clear debt collection guidelines in place
DC6	Our organization has almost collected all its debtors in the last 12months
DC7	Our organization has no long outstanding debtors
DC8	Our organization has not written off debtors
DC9	Our organization’s debtors turnover level is improving
DC10	Our organization ensures it doesn’t lose money in bad debts

Debt Age Analysis		1	2	3	4	5
DA1	Our organization carries out debt age review
DA2	Debtors who exceed their time are penalized
DA3	Our organization keeps a database of all its debtors and is always analyzed
DA4	There are debtors who have exceeded their payment dates
DA5	There is a separate team responsible for debtor age analysis
DA6	Our organization makes reminder calls
DA7	Our organization separates debtors by age
DA8	Our organization writes off long outstanding debts
DA9	Our organization classifies its debtors per age
DA10	Our organization separates debtors who have over aged

Disconnection Notices		1	2	3	4	5
DD1	Disconnection orders are always served in time
DD2	Disconnection orders are confirmed received by customers
DD3	There is a team responsible for serving disconnection orders
DD4	All customers get disconnection orders
DD5	We have alternative channels for alerting customers on disconnection
DD6	Disconnections have helped the company to recover money
DD7	Disconnections pushes customers to pay their bills
DD8	Disconnections are executed in time
DD9	Our organization gets money from reconnection fees
DD10	Our organization has a standby disconnection team

SECTION THREE: WATER LOSS MANAGEMENT

This section contains questions about Water loss management. Water loss management is all about the mechanism put in place to minimize water loss at NWSC. In the tables below, the numbers 1-5 represent levels of agreement from strongly disagree to strongly agree. Please mark the given statements according to your level of agreement.

Levels of Agreement:

Strongly Disagree	Disagree	Uncertain	Agree	Strongly Agree
1	2	3	4	5

Water Loss Management:

Illegal Connections Control		1	2	3	4	5
WI1	Our organization puts controls to reduce illegal connections
WI2	Our company identifies individuals who illegally connect water
WI3	Our organization penalizes illegal water connectors
WI4	Our organization recovers money from illegal connections
WI5	Illegal connections have reduced over time
WI6	Our organization arrests illegal connectors
WI7	Most connections have been genuine in the last 12months
WI8	Our organization issues public warnings on illegal connections
WI9	Our organization employs a team to track illegal connections
WI10	Our organization maintains a policy on illegal connection

Accuracy of Meter Readings		1	2	3	4	5
WA1	The system of meter reading is accurate
WA2	Inaccurate meter readings are detected and reversed
WA3	There are minimal errors from meter readings
WA4	There are controls to minimize inaccurate readings
WA5	Meter readings are always accurate
WA6	Our organization employs competent staff for reading meters
WA7	Our organization gets few errors in meter readings
WA8	Meter reading inaccuracies have reduced in the last 12 months
WA9	There are no recurrent errors in meter readings
WA10	Our organization conducts a routine programme for meter reading

Leaks & Bursts Detection		1	2	3	4	5
WL1	There are minimal water leakages and bursts
WL2	Our customers continuously report leakages to NWSC
WL3	There are channels through which leakages are reported
WL4	Engineers respond very fast to fix leakages
WL5	There is a reduction in the amount of water lost in leakages over time
WL6	Our organization employs a stand by team to handle leakages
WL7	Our organization buys equipment for fixing leakages
WL8	Our organization provides a toll free line for reporting busts
WL9	No water leakage cases were reported in the last 12 months
WL10	Our organization conducts routine field visits to check unreported leaks

SECTION FOUR: FINANCIAL PERFORMANCE

This section contains questions about Financial Performance. Financial performance will be looked at in terms of return on investment, return on assets and adjusted return on assets. In the tables below, the numbers 1-5 represent levels of agreement from strongly disagree to strongly agree. Please mark the given statements according to your level of agreement.

Levels of Agreement

Strongly Disagree	Disagree	Uncertain	Agree	Strongly Agree
1	2	3	4	5

Financial Performance

Profitability		1	2	3	4	5
FP1	Our profit have increased over time
FP2	We always meet our profitability targets
FP3	Our profit increased due to limited water loss
FP4	Our profit is affected by good debt management
FP5	We can increase our profits if we strengthen debt collection
FP6	Our organization has been making profit in the last 5 years
FP7	Our organization makes enough profit to pay shareholders’ dividends
FP8	Our organization enough profit to expand its operations
FP9	The company’s profitability meets the industry average standard
FP10	Our profits have been increasing in the last 12months

Revenue growth		1	2	3	4	5
FR1	Our organization’s revenue is growth is stable
FR2	Our organization always meets its revenue targets
FR3	Our revenues are increased by good collection practice
FR4	Our revenues are increased by good debt management practices
FR5	We can increase our revenue if we strengthen debt and water loss management
FR6	The company’s revenue has been increasing in the last 12months
FR7	Our organization’s revenue has been increasing over time
FR8	Our organization’s revenue growth rate is high
FR9	Our organization’s revenues supersede its costs
FR10	The revenues of our organization meet the industry standards

Liquidity		1	2	3	4	5
FL1	Our cash levels are adequate
FL2	The firm has no cash constraints
FL3	Stringent debt collection measures have increased our cash levels
FL4	Stringent water loss management measures can increase our cash levels
FL5	Our organization enforces adequate debt and water loss management practices
FL6	Our organization has not suffered from cash constraints
FL7	Our organization’s cash flows meets industry average
FL8	Our organization’s cash levels have improved over time
FL9	Our organization’s cash levels have improved in the last 12 months
FL10	Our organization has enough cash to meet day to day operations

Financial performance (Simpson et al., 2004)

	*Over the last 3 years, the business’s*	*Less than 5%*	*5% – 8%*	*8%- 11%*	*Over 11%*
FP1	Sales volumes have steadily increased by	1	2	3	4
FP2	The profits have steadily increased by	1	2	3	4
FP3	Sales revenue has increased by	1	2	3	4
FP4	Total assets have increased by	1	2	3	4
FP5	Total cost of operation has increased by	1	2	3	4
FP6	Return on sales has increased by	1	2	3	4
FP7	Return on investment has increased by	1	2	3	4
FP8	Cash levels have improved by	1	2	3	4

Thank you very much for your time and responses

God bless you.