THE EFFECT OF FINANCIAL LITERACY AND INTELLECTUAL CAPITAL ON FINANCIAL PERFORMANCE

Abstract

This study aims to analyze the effect of financial literacy and intellectual capital on the financial performance of MSMEs in Denpasar City. This research was conducted on MSMEs in Denpasar City with a sample of 150 MSME. Methods of data collection using a questionnaire. Determination of the sample using purposive sampling. Data were analyzed using Structural Equation Modeling (SEM) with Partial Least Square (PLS) approach. The results showed that financial literacy, human capital, structural capital, and relational capital had a positive effect on the financial performance of MSMEs in Denpasar City. This provides information that can be used by MSMEs in Denpasar City to maintain their business financial performance by managing existing finances and resources through increasing understanding of financial literacy and also optimally empowering their intellectual capital which consists of human capital, structural capital. and relational capital.