Business Characteristics and Financial Ratios Affecting the Survival of Small and Medium-sized Enterprises in the Three Southern Border Provinces
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Small and medium-sized enterprises (SMEs) should build sustainability through their ability to avoid financial problems in order to prevent economic issues that often arise in developing countries. This study aims to analyze the factors-business characteristics and financial ratios-that contribute to the survival of SMEs in the three southern border provinces of Thailand. A systematic sampling method was used with data from companies listed with the Small and Medium Enterprise Promotion and the Department of Business Development; 230 SMEs were included in the sample. Using multiple regression analysis, it was found that factors significantly affecting the survival of small and medium-sized enterprises in the three southern border provinces of Thailand, as measured by return on total assets, include legal status, age of the firm, current ratio, and debt-to-operating-capital ratio. For survival measured by return on owner’s equity, the factors are age of the firm, authorized share capital, revenue streams, current ratio, and debt-to-total-asset ratio. This evidence indicates that the long-term sustainability of SMEs is contingent upon their capital structure and business management. Consequently, the government should implement strategies to support SMEs, including the provision of financial management training and the promotion of access to capital. SMEs should concentrate on the management of working capital and the control of debt to guarantee their long-term survival.
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