FINANCIAL CAPAPBILITY OF SMALL AND MEDIUM ENTERPRISES: CAPACITY FOR USING CAPITAL

Abstract

This study aims to understand the financial capapbility of small and medium-sized enterprises in terms of capacity for using capital. The authors use both qualitative research methods and quantitative research methods. The survey subjects were employees of SMEs in Hanoi. The results show the financial capapbility of small and medium-sized enterprises in terms of capacity for using capital, including revenue, profit, profitability ratio (ROA, ROE, ROS), and a survey on the capacity for using capital of SMEs. Of which, in 2022, revenue will reach 9.6 million billion VND, an increase of 18.52% compared to the previous year and the highest in the period 2018–2022. In 2022, medium-sized enterprises will have pre-tax profits at their highest, reaching 35.4 trillion VND, an increase of 108.1% compared to 2018. This is a year of outstanding development for medium-sized enterprises in this period. In the period 2018–2022, the return on assets (ROA) and return on equity (ROE) of SMEs are proportional to the scale of the firm. The profit margin on revenue (ROS) of SMEs in the period 2018–2022 tends to increase gradually with scale. The debt index of the surveyed firms has a value of 0.67, less than 1 (<1), showing that the majority of assets of these firms are funded by debt; only 33% are funded by equity.