Abstract
Micro, small and medium enterprises (MSMEs) are considerably contributory to social and economic progress and prosperity through their entrepreneurial capacities and capabilities. However, they experience constraining challenges that importunately impair their abilities, failing to optimally engage themselves in the privileging opportunities around, particularly in the financial aspect. This paper aims to establish the financial factors affecting the financial performance of Philippine MSMEs whose audited financial statements are utilized to extract financial ratios needed for the study. It also aims to determine the factor structure that can explain the variation among these financial factors and to determine the cohesive cluster that can separate these financial factors. It employed multiple linear regression, factor analysis and cluster analysis in order to respectively achieve its objectives. It establishes that debt ratio, asset turnover and gross profit margin have a significant effect on return on assets. It further establishes that there are two significant factor structures, namely
Highlights
Micro, small and medium enterprises (MSMEs) are considerably contributory to social and economic progress and prosperity through their entrepreneurial capacities and capabilities
1) Is there a significant effect of the financial factors on the financial performance of Philippine MSMEs? 2) Is there a factor structure that can adequately explain the variation among the financial factors affecting the financial performance of Philippine MSMEs? 3) Is there a cohesive clustering that can separate the financial factors affecting the financial performance of Philippine MSMEs?
This study researched on the financial factors affecting the financial performance of Philippine MSMEs that are nationally figuring to 995,745.00 and regionally numbering 202,011.00 in the National Capital Region for year 2019
Summary
Small and medium enterprises (MSMEs) are considerably contributory to social and economic progress and prosperity through their entrepreneurial capacities and capabilities. They drive economic growth and equitable development [1]. Distributed producing for the world economies [2], they significantly share 90% of the global entities that substantially supply 70% of the global employment [3]. They are exceptionally and extensively supported by governments because they will responsibly render the 600 million jobs predicted in 2030 [4]. In Europe, MSMEs account for 99% of the total enterprises, and employ 66% of the total occupations and manufacture 56% of total value-added products of the Universal Journal of Accounting and Finance 9(6): 1524-1532, 2021
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