External Funding Sources Research Articles

ПРОБЛЕМИ ТА ПЕРСПЕКТИВИ РОЗВИТКУ ПІДПРИЄМСТВ ЗАЛІЗНИЧНОГО ТРАНСПОРТУ

The article proves that today, in conditions of drastic changes in macro- and micro-environments, Ukrainian railway transport enterprises are not always able to adequately and flexibly respond to these changes, as a result of which the industry's potential opportunities for obtaining economic benefits can turn into a source of problems. Studies have shown that currently the characteristic features of the modern state of railway transport enterprises are a high level of wear and tear of the rolling stock and material and technical base, a critical level of the financial state of the industry, as well as open questions regarding restructuring, the development of public-private partnerships, attracting investments, and technical innovations. and technological modernization in the industry. This situation arose as a result of: almost complete lack of state support, state funding, which does not allow covering the needs for maintenance and development of transport infrastructure; lack of own means of railways; lack of external funding sources; administrative restrictions on the increase of railway transport tariffs, which does not allow to accumulate funds for capital investments; imperfections of the legislative and regulatory framework. To date, the railways of Ukraine have a sufficiently high level of efficiency, as evidenced by the main qualitative indicators that characterize the operation of railway transport: average daily locomotive productivity, average daily wagon productivity and freight wagon turnover. It has been proven that without the implementation of decisive measures in the direction of improving management activities, the railway transport of Ukraine in the coming years may turn into the main restraining factor of the rise and structural restructuring of the economy, ensuring the country's security and defense capability, improving conditions and raising the standard of living of the population. Ensuring the effective development of railway transport should be based on a fundamentally new management approach, which would include the formation of innovative potential as a priority, as well as the constant and continuous improvement of the competence of railway enterprises.

Pengaruh Sumber Dana Eksternal dan Internal Perusahaan Terhadap Rentabilitas Modal Sendiri

The purpose of this study was to determine the effect of the company's external and internal sources of funds on the Profitability of Own Capital (RMS) in Manufacturing Companies Listed on the Indonesia Stock Exchange in 2018-2020. The variables used consist of the dependent variable, namely Rentability of Own Capital (RMS) and independent variables from external funds consisting of Debt to Total Capitalazition Ratio (DCR), Total Debt to Total Assets (DAR) and Debt to Equity (DER). Meanwhile, internal funding sources consist of Flow Back Ratio (FBR). The sampling technique used purposive sampling, namely the sampling technique with certain considerations. The number of samples in this study were 75 manufacturing companies with an observation period of 2018-2020. The results of this study indicate that 4 (four) independent variables consisting of DCR, DAR,DER as an external source of funds and Flowback Ratio as an internal source of funds simultaneously affect to RMS. The conclusion from the results of the study is that companies must be able to increase capital in order to increase the value of the company in order to compete to gain and increase investor confidence. Company management needs to adjust the composition of the use of FBR as internal capital by optimizing the management of assets owned.

EVALUASI ANGGARAN PENDAPATAN DAN BELANJA DAERAH KABUPATEN SUMBAWA

This study aims to know the performance of regional financial of Sumbawa District in 2017-2021. The type of this study was descriptive study. The data used was quantitative namely Regional Government Budget (RGB) of Sumbawa District from 2017-2021. The data used was secondary data. The methods used to collect data were through literature study. The data analysis technique was the RGB performance analysis technique which is assessed through three measures, namely the ratio of regional financial independence, the ratio of regional financial effectiveness and the ratio of regional financial efficiency. The results of the study showed that financial independence of Sumbawa in 2017-2021 was in the Very Low category with Instructive relationship pattern, then the financial effectiveness of Sumbawa District in 2017-2021 was in the Very Effective category and financial efficiency of Sumbawa District in 2017-2021 was in the Inefficient category. The Sumbawa District Government has not been able to implement regional autonomy, by reducing dependence on the central government. Therefore, it is needed the act of government to reduce dependence on external funding sources by optimizing the existing regional potential so that RGB can increase so that regional dependence on budgets from the Central and Provincial Governments can be reduced.

ПОВОЄННЕ ВІДНОВЛЕННЯ УКРАЇНИ В КОНТЕКСТІ ФРАГМЕНТАЦІЇ СВІТОВОЇ ЕКОНОМІКИ

Досліджено питання сучасного світового розвитку з огляду на російську воєнну агресію проти України. Охарактеризовано світові тенденції щодо фрагментації на противагу попереднім глобалізаційним тенденціям. Глобалізаційні процеси продовжують існувати у світі, але в умовах регіональних і покраїнових обмежень. Ще напередодні 2020-х років світова економічна думка дискутувала щодо перспектив розвитку в умовах так званої слоубалізації (повільної глобалізації). Активне використання режиму санкцій визначає окремі країни не лише як не сприятливі для економічної діяльності, а й як такі, що фактично виключені з процесу глобалізації. Відбуваються реальні зміни центрів економічної могутності. Нині дедалі активніше йдеться про теоретичну і практичну фрагментацію. Фактично у світі відбуваються процеси посилення економічної фрагментації, що виступає противагою традиційним глобалізаційним процесам. Фрагментація є одним з вагомих наслідків російської збройної агресії проти України і має перспективи призвести до поділу світу на геополітичні блоки із своїми власними технічними стандартами, резервними валютами і системами платежів. Визначено, що перспективи повоєнної відбудови України відбуватимуться в умовах фрагментації світової економіки і реалізовуватимуться за відповідними параметрами. Україна і надалі залежатиме від зовнішніх джерел фінансування і матеріальної допомоги. У цьому контексті вкрай актуальним є збереження зовнішніх пріоритетів розвитку країни, у першу чергу набуття повноцінного членства в Європейському Союзі. Важливо також усвідомити роль держави в економічному житті в умовах війни і в період післявоєнної відбудови. Крім того, беззаперечною повинна бути максимальна коректність у відносинах з іноземними партнерами, зокрема, у питаннях розрахунку потреб України у фінансуванні процесу відбудови з огляду на відмінності в ставленні до проблем корупції в Україні й країнах Заходу.

PENGARUH RETURN ON ASSET, RETURN ON EQUITY, NET PROFIT MARGIN, DAN EARNING PER SHARE TERHADAP HARGA SAHAM

The capital market is one of the sources of external funding for a company. Investors who want to invest in the capital market will analyze the financial ratios owned by a company to determine the financial performance of the company. Food and beverage companies are one of the sectors that are quite attractive to investors to invest. The purpose of this study was to determine the effect of Return On Assets (ROA), Return On Equity (ROE), Net Profit Margin (NPM), and Earning Per Share (EPS) on Stock Prices in Food and Beverage Companies Listed on the Indonesia Stock Exchange Period 2017 – 2021. The data used is secondary data in the form of financial statements of food and beverage companies listed on the Indonesia Stock Exchange for the period 2017-2021. The sampling technique used in this study is purposive sampling. The sample used in this study were 10 companies. The data analysis techniques used are normality test, multicollinearity test, heteroscedasticity test, autocorrelation test, multiple linear regression analysis, coefficient of determination (R2), t test and F test. The test tool used is SPSS Version 25. The results of this study indicate that partially Return On Assets (ROA), Return On Equity (ROE), Net Profit Margin (NPM), and Earning Per Share (EPS) affect the stock prices of food and beverage companies listed on the Indonesia Stock Exchange in the period 2017 – 2021. Simultaneously Return On Assets (ROA), Return On Equity (ROE), Net Profit Margin (NPM), and Earning Per Share (EPS) affect the stock prices of food and beverage companies listed on the Indonesia Stock Exchange for the 2017 period – 2021.

Дослідження впливу кваліфікуючих факторів на інвестиційно-інноваційні процеси в умовах сучасних викликів

This article explores the influence of qualifying factors on investment and innovation processes in the face of modern challenges. The influence of Ukraine's positioning in world rankings on the dynamics of investment and innovation processes is determined, which determines the degree of confidence of a foreign investor and highlights the main obstacles to the formation of an innovation-active environment within the country according to the structural components of the indices. Attention is paid to the scientific discussion of the issue of protecting the rights of minority shareholders, which has become aggravated with the implementation of the principle of liberalization of the Ukrainian financial market. The tendencies of the increase in the cost of borrowed resources within the country in connection with the policy of inflation targeting are considered, which reveals the difference between the planned and actual inflation target, since an increase in the discount rate is a managerial lever for reducing inflation. Attention is focused on a fairly high share of NPL loans in the structure of the loan portfolio of commercial banks, which necessitated improving access to credit information through the creation of a new public credit registry based on the NBU. The need has been identified for increasing the volume of the resource base, in particular with increasing the share of external sources of financing, which will help ensure competitive conditions for the implementation of the financial and economic activities of national producers. The expediency of introducing managerial financial and economic levers for the development of medium- and long-term financial instruments in the context of financing investment and innovation processes is substantiated.

Political Economy of Fiscal Reforms in the 1990s

Throughout the decade of the 1990s, major emphasis in Pakistan remained on fiscal reform as a part of the reform programmes undertaken by the various governments of Pakistan. Fiscal reform assumes significance considering the high budget deficits that Pakistan has been experiencing. These have added to Pakistan’s total debt burden in general and external debt in particular. Increase in the burden of debt adds to debt-servicing expenditure which further feeds back into the issue of high fiscal deficit. Debt-servicing increased to almost 47 percent1 by the middle of the decade of 1990s and comprised 8.3 percent of the GDP, up from less than 1 percent mid-1960s. Pakistan’s external debt at over $32 billion2 in 1998 was 41 percent of its GNP which was amongst the highest in the South Asian region with India’s at 20 percent of GNP in the same year and Sri Lanka’s also at 41 percent3 of its GNP. In this paper, we attempt to explore the rationale behind the emphases on the improvement in both the deficit-to-GDP and the tax-to-GDP ratios that have remained the cornerstones of Pakistan’s fiscal reform effort in the decade of the 1990s. Section 2 is a discussion of the extent of successes and failures of the fiscal reform effort thus far and explores the relationship between tax generation and budget deficit. Section 3 discusses the impact of expenditures on budget deficit. Section 4 shows the rise in dependence on external sources of financing. Section 5 gives the conclusions.

Multi-Сhannel Source of Financing for Innovative Projects

The article deals with the problem of financing innovation activities that hinder the development of the innovation system of Kazakhstan. The types of sources of financing for innovative projects are given, the limitations of their use are noted. A feature of innovation-oriented enterprises is a higher demand for external sources of financing, while innovative activity is characterized by a sufficiently high degree of uncertainty and risk, therefore, the multiplicity of sources of financing, flexibility, and adaptability to a rapidly changing external environment are important principles of financing innovative projects. The use of own funds in the development and implementation of an innovative project provides maximum freedom in making managerial decisions. The implementation of innovative projects proves the effectiveness of the use of debt and equity instruments. The methodology of the study is based on a descriptive and comparative analysis of the features of domestic and foreign methods of developing innovative activities and financing innovative projects, which are not based on empirical data, synthesis, and systematic and logical approaches. The modern market economy is characterized by the inevitability of the transition to an innovative path of development, which defines itself as one of the significant factors of accelerating the economic growth of the state, and its technological and socio-economic development, ensuring economic security and competitiveness in the world market. The innovative way of economic development is based on the process of searching, preparing, creating, implementing, and commercializing innovations, i.e., ensuring the transformation of an idea directly into an innovation. The innovative development of the state is based on attracting the necessary investments that ensure economic growth, which is considered by the author of this article. The Republic of Kazakhstan, having a number of direct and indirect methods, can expand its arsenal by applying effective.

Sources of financing for increasing the competitiveness of the food Industry in Azerbaijan

The state policy of the government of Azerbaijan is aimed at the sectoral diversification of the economy of the country, in which the food industry occupies a significant place. Since for a long time there has been a raw materials-based model of the economy in Azerbaijan, investment funds have not been not directed to increase the competitiveness of the food industry in order to operate successfully in the global market. The main aim of the research is to investigate the opportunity of using various sources of financing, which are required to improve the Azerbaijani food industry competitivity. The methods of summary and grouping, analysis, synthesis, induction, deduction, were used in order to reach the goal. It was shown that the food industry in the state could be improved by increasing the climate investment and the share of outside and joint financing sources. During the research conducted it was determined that over the past 15 years, the government of Azerbaijan has implemented more than 70 national and industry specific programs. The work separately points out the State Programs I and II on the economic and social development of the regions, which were introduced in the period from 2004 to 2013. For increasing the food sector competitivity in Azerbaijan, additional financial resources, which reached $65 billion in 2012, were attracted in the country; loans to strengthen the competitiveness of the food industry increased by 9.7 times in the period between 2006 and 2021, and the investment volume will exceed $3 billion in the result. The positive impact of the measures, which were taken, was reflected in the creation of additional 1.2 million jobs in the food industry in the Republic of Azerbaijan. The study results showed that internal sources were the largest share in the financing of the food industry in the country, while the due attention was not paid to the development of international cooperation aimed at increasing external and joint sources of financing. The practical significance of the results of the study presented in this article lies in its providing of the basis for subsequent areas of study of the topic under consideration, as well as for the development of state programs on the improving of the food sector in Azerbaijan

SMOKING MIGHT INCREASE THE FAILURE RATE AND MARGINAL BONE LOSS AROUND DENTAL IMPLANTS.

Mustapha AD, Salame Z, Chrcanovic BR. Smoking and Dental Implants: A Systematic Review and Meta-Analysis. Medicina. 2021 Dec 27;58(1):39. No external sources of funding were available for conducting this study. Systematic review (SR) with meta-analysis (MA) of data.

ANALYSIS OF THE IMPORTANCE OF THE BANK LOANS AS FINANCING SOURCE OF SMEs IN KOSOVO AND NORTH MACEDONIA

SMEs financing is one of the most important factors that influence SMEs growth and development in every country. Among researchers around the world this is always an important topic which needs continual research from different approaches. Knowing the importance of SMEs on the economic development of every developed and developing country and being aware that without financing the SMEs growth and development isn’t possible it is very importance to analyze the financing sources of SMEs in both neighbor countries. Bank loans are considered as the most important external financing source for SMEs around the globe. In this paper we are going to analyze the importance of bank loans as financing sources of SMEs based on comparative analysis between Kosovo and North Macedonia. Research methodology is compound by primary and secondary data, where, primary data was collected through quantitative research conducted on 300 SMEs in the Republic of Kosovo and 300 SMEs in the Republic of North Macedonia, while, the secondary data we have collected from state institutions, EU reports, research reports, etc. The results revealed that in both countries more than 50% of SMEs use bank loans as external sources of financing. The findings suggest at the end for some future lines of research and provides recommendations for the main stakeholders of this field of study.

ARDL Analysis of Remittance and Per Capita Growth Nexus in Oil Dependent Economy: The Nigeria’s Experience

Purpose: Remittance is essential to economic wellbeing. Realising this fact, this study examined, within the optimist theoretical framework, whether international remittances significantly impact per capita economic growth in Nigeria. Design/methodology/approach: Employing annual time series data spanning 1980-2020, the study adopted the Pesaran, Shin, and Smith ARDL bounds estimating model to examine the type of relationships between remittances and Nigeria’s per capita growth. Finding: The study reveals a statistically significant positive nexus in the long-run and short-run among the variables. Specifically, it found that higher remittances inflow enhances per capita growth both in long-run and short-run in Nigeria. Furthermore, the study found that remittances are sources of external financing and eventually, it is a means to economic growth and also may help to fill fiscal deficit gap. Research limitations/implications: This study recommends that government should, through sound policy option, encourage remittances influx. This could be realised by creating viable relationship among international communities that largely account for remittance inflow into Nigeria. It further suggests a prudent and optimal management of remittances inflow through the appropriate monetary authority. This may include formulating policy that will ease remittance inflow and remove unnecessary barriers to inflow of remittances. Originality/value: The study contributes to literature by examining whether international remittances within the optimist theoretical framework significantly impact per capita economic growth (PCEG) in Nigeria.

Financing decisions in private family firms: a family firm pecking order.

Family firms are one of the most ubiquitous forms of business organizations worldwide. Their survival and growth are thus not only crucial for the firms themselves but also for the overall economy. One of the factors that influence their survival and development are their financing decisions. These decisions are generally described through the pecking order theory. However, not much is known about the applicability of this theory in private family firms. Given the shortcomings (both theoretically and empirically) of the current literature, we analyze 1087 incremental financing decisions from 277 family firms to develop and test a specific family firm pecking order. We integrate the elements of the socioemotional wealth perspective to theoretically explain the preferred order and introduce family capital into the pecking order model. Our findings indicate that family firms first prefer internal financing, next debt financing, followed by family capital, and last external capital. We also find that SEW considerations play a role in this financing decision. Especially the retention of control over the firm and the aim to pass the firm to the next generation appear to play an important role in determining this order. These dimensions ensure that family firms try to avoid extra capital. However, when it is needed, they will opt for family capital over external capital. This paper thus provides more insight into the reasoning behind financing decisions in private family firms. How do family firms finance their investments? When looking for ways to finance their investments, firms have several options. According to traditional finance theories, they generally follow a so-called pecking order: they prefer to first use their internal funds, before turning to external financing. For family firms, the most ubiquitous form of business organization worldwide, two important aspects have been ignored in this research until now. First, socioemotional aspects influence decision-making in family firms and thus probably also financing decisions. Next, the business family itself can act as an external source of finance, which is not yet accounted for in the current pecking order model. In this research, we take these issues into account in order to develop-theoretically and empirically-a family firm pecking order. We investigate over a thousand financing decisions of 277 privately held family firms. Our results show that they prefer internal financing, followed by bank debt, family capital, and external capital. Especially the retention of control over the firm and the aim to pass the firm to the next generation appear to play an important role in determining this order. Our research thus indicates that future research should pay attention to the peculiarities of family firms when investigating their financing decision.

Assessment of the role of innovative activity as a method of increasing the financial performance of an enterprise (on the example of textile industry enterprises)

This article analyzes the indicators of economic and innovative activity of all enterprises, including enterprises of the textile industry of the Republic of Kazakhstan, and also the volume of services for financing enterprises and their impact on the activities of enterprises was studied. The study purpose is to assess the volume of domestic enterprises’ innovative activity in the textile industry of the Republic of Kazakhstan and identify the financing sources for innovative projects, their effective directions. The scientific and practical significance of the work lies in the study of the current volume of financing of innovative services of domestic light industry enterprises and the costs of general innovation, in determining the process of increasing the profitability of enterprises by improving product quality and using innovative opportunities. The innovative measures’ correspondence with the volume of production costs, production quality, costs, market demand, adhering to certain requirements, is considered. The methodological basis of the study was the following general scientific and special methods:  the method of system-structural analysis, scientific abstraction, induction, economic-statistical, logical and comparative analysis. The research is conducted by authors on the significance of innovation in all light industry enterprises in global and national, regional economic development, the financial deficit of enterprises and the volume of financial dependence on external sources, and also analyze the amount of funds allocated for innovation in foreign companies (USA and EU), the necessary recommendations. The ability and volumes of financing the innovation activity of domestic enterprises were assessed, the effectiveness of increasing the innovative activity of enterprises was assessed, the main factors and directions that increase the innovative activity of enterprises were identified. A comparative analysis of performance indicators of enterprises providing innovative services has been made. Key words: еnterprises, financing of innovations, venture funds, multinational companies, search for investors, lending, external sources of financing, innovation activity.

Credit Constraints and Investment-Cash Flow Sensitivity in Declining Economic Conditions: The Role of Reliance on Bank Debt

This paper examines the sensitivity of investment to cash flow in declining economic conditions, focusing on the impact of a firm’s reliance on bank debt. Using the context of Jordan, a developing Middle East and North Africa (MENA) country, the study utilizes the standard Q theory of investment augmented by cash flow, leverage, and liquidity. Then, it allows for differential loading on the cash flow coefficient pre- and post-2008, the year that marks the beginning of declining conditions, and by categorizing companies based on their reliance on bank debt, measured by having access to a bank line of credit. Using alternative estimation specifications, the findings indicate that firms’ investments decreased significantly in episodes of declining conditions. In addition, the findings indicate that firms’ investments exhibited more sensitivity to cash flow during declining conditions, especially for firms with access to lines of credit. The latter finding suggests that firms reliant on bank debt could not compensate for the credit shortages by switching to other sources of external funding and therefore they were compelled to use more of their internally generated funds to finance their investments.

Intentional and unintentional benefits of minority writing accountability groups.

A faculty position can be a balancing act. Many new faculty, particularly minorities, struggle due to a lack of mentorship. Writing accountability groups (WAGs) offer new faculty an opportunity to glean advice from mentors and improve their writing skills and enhance their career development in science, technology, engineering, and mathematics (STEM).

Capital Access For Micro Small Medium Enterprises

Along with the development, various factors are needed including in terms of capital which must be continuously fulfilled to continue distribution activities from producers to consumers. Ease of access to capital for MSMEs includes the ease of requirements in applying for formal financing so that business people do not choose personal or non-formal loans which can be said to have less stable capital availability. These easy requirements, even accompanied by light financing services, greatly encourage business people to develop their businesses so that they continue to receive circular financing. The research uses literature research. The data collection method used is the documentation method. The data analysis emphasis on disclosing the content (essence) aspects of several existing propositions. Furthermore, this method is the nature of the review of various theories and analyses. The results of his research SME usually use business capital from personal pockets or joint capital with partners at the beginning of establishing a business. MSMEs are important because compared to large companies, external sources of MSME financing are limited in terms of supply and demand. Business capital can also be interpreted from various aspects, namely capital for the first time to open a business, capital to expand the business, and capital to run daily businesses obtained from the investment model and working capital. MSME constraints on bank credit can be viewed from the demand and supply side. Efforts are being taken to increase the use of credit facilities from banking institutions by micro, small and medium enterprises by increasing access to banking to obtain credit facilities for MSMEs, strengthening MSMEs in financial, managerial, partnership, and entrepreneurial capabilities.

A Fork in the Road for Emergency Medicine and Critical Care Blogs and Podcasts: Cross-sectional Study.

Free open-access meducation (FOAM) refers to open-access, web-based learning resources in medicine. It includes all formats of digital products, including blogs and podcasts. The number of FOAM blog and podcast sites in emergency medicine and critical care increased dramatically from 2002 to 2013, and physicians began to rely on the availability of these resources. The current landscape of these FOAM sites is unknown. This study aims to (1) estimate the current number of active, open-access blogs and podcasts in emergency medicine and critical care and (2) describe observed and anticipated trends in the FOAM movement using the Theory of Disruptive Innovation by Christensen as a theoretical framework. The authors used multiple resources and sampling strategies to identify active, open-access blogs and podcasts between April 25, 2022, and May 8, 2022, and classified these websites as blogs, podcasts, or blogs+podcasts. For each category, they reported the following outcome measures using descriptive statistics: age, funding, affiliations, and team composition. Based on these findings, the authors projected trends in the number of active sites using a positivist paradigm and the Theory of Disruptive Innovation as a theoretical framework. The authors identified 109 emergency medicine and critical care websites, which comprised 45.9% (n=50) blogs, 22.9% (n=25) podcasts, and 31.2% (n=34) blogs+podcasts. Ages ranged from 0 to 18 years; 27.5% (n=30) sold products, 18.3% (n=20) used advertisements, 44.0% (n=48) had institutional funding, and 27.5% (n=30) had no affiliation or external funding sources. Team sizes ranged from 1 (n=26, 23.9%) to ≥5 (n=60, 55%) individuals. There was a sharp decline in the number of emergency medicine and critical care blogs and podcasts in the last decade, dropping 40.4% since 2013. The initial growth of FOAM and its subsequent downturn align with principles in the Theory of Disruptive Innovation by Christensen. These findings have important implications for the field of medical education.

View From the Chair: The First 5 years.

Department of Surgery, Boston University Medical Center, Boston, MA No external sources of support or funding contributed to this work. View from the Chair Note from the authors: This article was built on the scaffolding of a talk given by one of the authors (JT) at the Academic Surgical Congress during a Society of University Surgeons Hot Topics Session in February 2022 in Orlando, Florida. The authors report no conflicts of interest. [email protected]

Is financial distress risk important for manufacturing SMEs to rebalance the short-term debt ratio?

PurposeThis study seeks to analyse if the adjustment towards the target short-term debt ratio of small and medium-sized firms (SMEs) is related to financial distress risk.Design/methodology/approachData obtained for a sample of Portuguese manufacturing SMEs from 2010 to 2017 were analysed using the system-generalised method of moments (GMM-sys). Using the modified Z-Altman score, the authors classify SMEs according to their exposure to financial distress risk.FindingsManufacturing SMEs exposed to a high risk of financial distress rebalance their short-term debt ratio quicker. However, regardless of the financial distress risk level, SMEs distant from the target short-term debt ratio adjust more slowly, suggesting that transaction costs are greater than financial distress costs.Practical implicationsPolicymakers should promote the access to external sources of finance with low transaction costs for SMEs, exposed to low levels of financial distress risk, to rebalance their short-term debt ratios quicker. Distressed SMEs far from their target short-term debt ratios, but with capacity to rebalance, need government programmes to access finance with low transaction costs to rebalance their short-term debt ratios.Originality/valueThis paper contributes to deepening our understanding of how SMEs, facing financial risk, rebalance their short-term debt ratios. SMEs, facing high financial distress risk, adjust towards their target short-term debt ratios more rapidly. However, SMEs, distant from the target short-term debt ratio face higher transaction costs than financial distress costs. These firms adjust towards their target short-term debt ratios more slowly, which may aggravate the refinancing risk and, ultimately, announce bankruptcy.