Financial Harmony in Diversity: Exploring the Dynamics of SMEs' Finance through the Lens of Business Size, Debt-to-Equity Ratio, and Revenue Growth toward the Perfection of Net Profit Margin

Adi Gunanto, Larisa Elena Preda

© 2023 Adi Gunanto, published by UIKTEN. This work is licensed under the Creative Commons Attribution-NonCommercial 4.0 International. (CC BY-NC 4.0).

Citation Information: SAR Journal. Volume 6, Issue 4, Pages 230-235, ISSN 2619-9955,, December 2023.

Received: 19 August 2023.
Revised:   09 November 2023.
Accepted: 16 November 2023.
Published: 25 December 2023.


This study aims to analyze the impact of three independent variables: business size, debt-to-equity ratio, and revenue growth on the net profit margin of SMEs. In its execution, the methodological approach is based on multiple linear regression analysis, while the data acquisition technique involves surveys of SMEs from various sub-sectors. The novelty of this research lies in its in-depth analytical approach to the relationship between financial variables and their impact on the net profit margin of SMEs. The findings of this study indicate that business size, debt-to-equity ratio, and revenue growth significantly affect the net profit margin. The practical implications of this research provide guidance for SMEs in managing their finances through an understanding of the net profit margin, enabling them to make more comprehensive financial decisions.

Keywords – analytical approach, financial variables, MSMEs.


                                                                      Full text PDF