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“Getting Big by Thinking Small”: An Empirical Analysis from Trading SME’s

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  • Ardita Todri
  • Francesco Scalera

Abstract

The necessity to manage the debts capacity within Small and Medium Size Enterprises (SMEs) remains pivotal to their solvency and growth potentiality, especially in trading sector. Therefore through a ROC Curve analysis there were identified the discriminative variables (organized in four indicators groups such as- liquidity, turnover, structure and return) pertaining to a panel of 62 SME’s with performing and not status (default ratio of 50%) by referring to the 2013-2014 period.The latest, excluding the others indicators confirms that total debt to equity, total assets to shareholder’s equity and long term assets to shareholder’s equity can better do it. In addition, a regression analysis is used to estimate the impact of the above mentioned discriminative variables on SME’s debts management capacity in the quality of a performance measure (pertaining to liquidity indicators group). Under these circumstances it was evidenced that the variables that positively impact SME’s performance are- equity to total debts, long term assets to shareholder’s equity as well as return on equity.Referring to the Albanian economical structure, undoubtedly these results give some hope signals regarding SME’s development strategy being that they can contemporary contribute in the country’s GDP growth by good performing in micro level.

Suggested Citation

  • Ardita Todri & Francesco Scalera, 2016. "“Getting Big by Thinking Small”: An Empirical Analysis from Trading SME’s," International Journal of Business and Management, Canadian Center of Science and Education, vol. 11(8), pages 1-1, July.
    • Handle: RePEc:ibn:ijbmjn:v:11:y:2016:i:8:p:1
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    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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