Application of a financial model for a MSME

Abstract

At present it is no longer effective for managers to make decisions based on opinions or hunches without having any financial foundation, MSMEs are part of an environment in which economic, political and social aspects become constantly changing and this impacts the economic structure, that is why companies must identify the factors that can affect it and see both operational and financial problems. This article seeks positive results such as increasing the profitability of MSMEs by implementing a Financial Model through financial ratios that will reflect the economic reality of the enterprise, the evaluation of performance and the management of the organization. At the end of this research, some recommendations for MSMEs are raised and it is concluded that the proposed financial model constitutes for MSMEs a procedure through which they can transform their weaknesses into opportunities for growth, development and improvement. At the end of this research, some recommendations for MSMEs are raised and it is concluded that the proposed financial model constitutes a procedure through which it can transform its weaknesses into opportunities for growth, development and improvement. In addition to planning strategies to maximize profits, MSMEs are attentive to applying strategies that allow them to achieve competitiveness, so a financial model will facilitate them to achieve a positioning in the market with quality, productivity and efficiency.