Thai SMEs employ about 69 per cent of the total population. However, SMEs structure in short term... more Thai SMEs employ about 69 per cent of the total population. However, SMEs structure in short term financial characteristics depends mostly on short term loan. Thus, researcher have to be aware of financial distress of SMEs. This study utilizes a Logit analysis model to examine financial ratio of 385 SMEs financial statements. The result shows that financial statement consists of 37 financial distress and 348 non-financial distress of enterprises. This study is conducted from 2 research questions which are (1) Are there significant differences in liquidity, leverage and profitability ratios of financial distressed and non-financial distress in Thai SMEs. (2) Is Logit model is appropriate for classifying Thai financial distress. The study has examined empirical evidence from Thai manufacturing industries to identify differences between financial profiles of financial distress and non-financial distress of SMEs before developing and testing the Logit analysis model in order to predict tendency of SMEs financial distress. The first hypothesis is accepted, which shows that there are statistically significant differences between financial ratios of financial distress and non-financial distress of SMEs in Thailand. The second hypothesis shows that the predictability of financial ratios in the Logit analysis model enables classifying Thai financial distress and non-financial distress of SMEs more accurately than an feasible classification. Finally, this study is expected to help policy-makers, SMEs owners and business consultants to determine strategies by providing sustainable development for Thai manufacturing SMEs to expand the growth of Thai industries.
Thai SMEs employ about 69 per cent of the total population. However, SMEs structure in short term... more Thai SMEs employ about 69 per cent of the total population. However, SMEs structure in short term financial characteristics depends mostly on short term loan. Thus, researcher have to be aware of financial distress of SMEs. This study utilizes a Logit analysis model to examine financial ratio of 385 SMEs financial statements. The result shows that financial statement consists of 37 financial distress and 348 non-financial distress of enterprises. This study is conducted from 2 research questions which are (1) Are there significant differences in liquidity, leverage and profitability ratios of financial distressed and non-financial distress in Thai SMEs. (2) Is Logit model is appropriate for classifying Thai financial distress. The study has examined empirical evidence from Thai manufacturing industries to identify differences between financial profiles of financial distress and non-financial distress of SMEs before developing and testing the Logit analysis model in order to predict tendency of SMEs financial distress. The first hypothesis is accepted, which shows that there are statistically significant differences between financial ratios of financial distress and non-financial distress of SMEs in Thailand. The second hypothesis shows that the predictability of financial ratios in the Logit analysis model enables classifying Thai financial distress and non-financial distress of SMEs more accurately than an feasible classification. Finally, this study is expected to help policy-makers, SMEs owners and business consultants to determine strategies by providing sustainable development for Thai manufacturing SMEs to expand the growth of Thai industries.
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