CREDITWORTHINESS AND FINANCIAL BALANCE — KEY INDICATORS FOR THE FINANCIAL HEALTH OF AN SME IN THE TRADE SECTOR

Abstract: Trade activity is an essential component of the economy, facilitating the movement of goods from producer to consumer. In the context of sustainable development, trade is of strategic importance in the optimal development of economic and social systems. In order to carry out this article, we have chosen the two largest SMEs in the S-V Oltenia region, Romania, by turnover in 2023, in the field of trade. In order to carry out the brief diagnosis in terms of financial health, we have chosen as main indicators, on the one hand, creditworthiness to assess the degree to which SMEs are able to pay their obligations on the basis of the assets held, and on the other hand, the analysis of financial balance to reflect on the equality between financial sources and the economic means necessary to carry out trade activity. In this regard, in addition to the theoretical aspects analyzed, the paper is based on a brief financial analysis in the form of balance sheets for the period 2021-2023, while also highlighting how the management of financial and accounting information is used for managerial decision-making. The research question was: Is creditworthiness and financial balance important in making financial decisions at the SME level? The results showed that the indicators addressed reflect the concordance between the sources of financing and the payment needs of SMEs in carrying out the activities they carry out, as well as the development needs required by the market and consumers.

Keywords: creditworthiness, financial balance, financial position, SMEs

JEL Classification: M41, G10, L25