Abstract:
Waste management companies are instrumental in achieving environmental sustainability and economic efficiency in rapidly urbanizing cities. However, in developing contexts such as Kenya, their performance is often hampered by limited access to capital, weak financial planning systems, and stringent environmental regulations. This study examined the effect of financial management practices on the operational performance of waste management companies in Nairobi County, using Taka Taka Solutions as a case study. Specifically, the study investigated how working capital management, cost management, and capital budgeting influence operational performance, while also assessing the moderating role of environmental regulations. The research was anchored on the Liquidity Preference Theory, Pecking Order Theory, and Resource-Based View, providing a
robust theoretical foundation for linking financial practices to organizational outcomes. A
descriptive correlational research design was employed, targeting a population of 350 employees from Taka Taka Solutions, from which a stratified random sample of 203 respondents was selected. Primary data were collected using structured questionnaires and analyzed through descriptive statistics, correlation, multiple regression, and moderated regression models. The findings established that working capital management, cost management, and capital budgeting have a significant positive effect on operational performance. Moreover, environmental regulations were found to significantly moderate these relationships, enhancing the effectiveness of sound financial management practices under supportive policy conditions. The study concludes that efficient financial management systems strengthen liquidity, cost efficiency, and investment
decision-making, thereby improving the sustainability and competitiveness of waste management companies. The study recommends that such firms institutionalize cost control mechanisms, adopt data-driven capital budgeting tools, and align financial practices with regulatory requirements to optimize operational performance.
