Profitability of MSMEs in the real estate sector in Ecuador

Abstract

The objective of this study is to examine the factors affecting the profitability of MSMEs in the real estate sector in the province of Guayas using a multiple linear regression model with accounting and financial information provided by 608 companies in the sector in 2020. The results of the study showed that there is a positive relationship between asset turnover, indebtedness and leverage with profitability. The results also showed a negative and significant relationship of current liquidity, firm size, age and fixed asset levels with profitability. This research highlights the importance of financial indicators in explaining firm performance behaviour. The findings of this study provide guidelines to companies on measures that can be used to assess, improve and increase the profitability of MSMEs.