Analysis of Effect of Long Term Financing on Profitability of Supermarkets in Central Business District Nairobi City Kenya

:The research aim was to examine the effect of long-term financing on the profitability of supermarkets in the central business district of Nairobi city Kenya. The study was based on pecking order theory. The study adopted a cross-sectional explanatory research design. The study focused on 18 major supermarkets in Nairobi central business district Kenya. The target population was 18 branch supervisors and 18 accountants of major supermarkets in Nairobi central business district Kenya. The study utilized a census approach. Structured questionnaires were utilized to gather primary statistics from the respondents and secondary data were obtained from the annual corporate financial statements of selected supermarkets in Nairobi central business district. Data were evaluated by the use of descriptive statistical analysis and inferential statistical analysis. The statistics gathered were dissected using regression analysis with the support of Statistical Package for Social Sciences (SPSS) model 22. The relationship between long-term financing and profitability was assessed using Pearson's correlation and multiple regression analysis. The study revealed that the long-term financing correlation coefficient was positive and significant (r=0.590**, P<0.000). Further revealed that long-term financing positively influenced the profitability of supermarkets in the central business district of Nairobi city. The study concluded that long-term financing had a positive and statistically significant effect on the profitability of supermarkets in the central business district of Nairobi city Kenya. The study recommends that management of the supermarkets should emphasize the need to make the ideal decisions that include increased long-term funding that will assist with expanding supermarket profitability, additionally, they should introduce strategies like a mix of equity and debt that will decrease the cost of capital which will boost profitability and ensure that there is optimal capital in their operations and developments. The study recommends that the government should nurture the retail sector by forming different strategies and schemes such as debt relief finance schemes, collateral-free loans, corporate rates reliefs, business rates deferral, and tax credits schemes to help improve their capital base and cash flow.