Assessment of Financial Sustainability in Ecuadorian Microenterprises

Abstract

Financial sustainability is the one desired by any company, however, economic externalities could catapult a company to business insolvency, therefore, this research aims to assess the financial sustainability of microenterprises in Ecuador, in the sectors of the economy, the purpose is to determine the optimal level by means of financial ratios, in order to provide the reader with the key parameters in which a microenterprise must develop in order to survive, together with the aforementioned, we proceed to analyze the microenterprise from the perspective of the financial structure, the impact of advertising, taxes and sources of financing; The tools used are the fixed effects model, Hausman adjustment, Turkey test and Levene’s statistic. The results showed that microenterprises are biased by the indebtedness of assets, portfolio recovery and financial cost, and that the best financial structure is dominated by a proportion of 33.33 to 66.66% of liabilities.