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Sustainability 2018, 10(1), 192; https://doi.org/10.3390/su10010192

Econometric Modeling of SME Performance. Case of Romania

1
Faculty of Economics and Business Administration, Babeş-Bolyai University, 58-60 Teodor Mihali Str., Cluj-Napoca400591, Romania
2
Faculty of Economics, University of Oradea, 1-5 Armatei Romane Str., Oradea 410087, Romania
3
Faculty of Economics, Juridical and Administrative Sciences, Petru Maior University, 69 Livezeni Str., Targu-Mures 540566, Romania
4
Faculty of Economics, Computer Science and Engineering, “Vasile Goldis” Western University of Arad, 86 Liviu Rebreanu Str., Arad 310414, Romania
*
Author to whom correspondence should be addressed.
Received: 12 November 2017 / Revised: 5 January 2018 / Accepted: 9 January 2018 / Published: 17 January 2018
(This article belongs to the Special Issue Sustainability in SMEs)
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Abstract

In the present study, we analyzed the financial equilibrium factors that have a major impact on SME financial performance, as this performance is considered to have played a pivotal role in Romania’s recovery from the economic crisis. Thus, we built econometric models based on return on assets and return on sales in five economic sectors, i.e., pharmaceuticals, furniture manufacturing, leather garment factories, software firms and textile factories. We show how the enterprises’ performance was influenced by the independent variables of the equilibrium: fixed assets, current assets, inventory, receivables, equity and liabilities. The results indicate that return on assets is influenced by the current assets ratio and the inventory ratio in all models, as well as by the equity-to-total liabilities ratio in 80% of the models. We also notice that assets ratios have the highest influence on performance evaluation, namely inventory ratio in all models and current assets ratio in 87.5% of the models. In addition, liabilities ratios influence performance as follows: equity-to-total liabilities ratio in 80% of the models and total debt-to-assets ratio in 35% of the models. View Full-Text
Keywords: sales; assets; debt-to-equity; total debt-to-assets sales; assets; debt-to-equity; total debt-to-assets
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).
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Batrancea, I.; Morar, I.-D.; Masca, E.; Catalin, S.; Bechis, L. Econometric Modeling of SME Performance. Case of Romania. Sustainability 2018, 10, 192.

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