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Explore factors determining profitability of SMEs in Bangladesh through survey and analysis. Understand impacts on performance in this significant sector contributing to national GDP.

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  1. Welcome to our presentation

  2. Research Project Determining Profitability of Small and Medium Enterprises: An analysis on influential factors

  3. Presented by Mehedi Abedin ID – 182-0160-231 Mst. Koli Akter ID - 171-0117-231

  4. Executive Summary • The business and enterprises literature show that there are many factors determining the profitability of an enterprise • In this paper, profitability of SMEs is being measured through survey. • The data are collected through questionnaire to businesses.

  5. CHAPTER 1 Introduction

  6. 1.0 Introduction • Small and medium enterprises (SMEs) are the most important segment of any economy in the world. • These enterprises are easy to start, require only minimum capital, employ a comparatively higher number of people, and produce goods that meet local demands as well as contribute to export earnings. • Size of SME varies based on the socioeconomic condition of the country or even the region.

  7. 1.1 Background • According to ADB Institute, about 99 percent of Bangladeshi formal business enterprises are SMEs. • They constitute about 75 percent of non-agricultural employment and contribute about 25 percent to the national GDP. This 25 percent of National GDP is contributed by only the manufacturing SMEs. • This sector faces several problems like - lack of technical know-how, shortage of long-term financial support, lack of skilled workers, marketing link, research and development etc.

  8. 1.2 Significance of the Study • Completing this research project brings together aspects of theory and practice. • For theory, this study is an expansion of previous studies on analysis of profitability of SMEs by focussing on identifying the impacts of factors on SME. • In practice, this study is significant for determination of profitability in Bangladesh. Results will indicate profitability of SME and relationship with performance.

  9. 1.3 Objectives of the Study • Prime Objective • To determine profitability of the SME sector of Bangladesh. • Specific Objectives • To appraise the present financial situation of SME in Bangladesh. • To determine the factors that influence the profitability of the SME sector of Bangladesh • To identify the factors that constrain to the more profit of SME in Bangladesh.

  10. 1.4 Limitations of the Study • Most of the sample units do not keep proper books of accounts and statistics. So, they used to give estimated figures of different questions of the questionnaire. • Since secondary data has been widely used, so limitations pertaining to secondary data is unavoidable. • Some of the respondents were reluctant to give proper information. Therefore, the analysis may suffer from non-sampling errors.

  11. CHAPTER 2 Methodology of the Study

  12. 2.0 Methodology • 2.0.1 Research Design • The research project not only determine profitability of SME of Bangladesh but also determine the factors that influence the profitability. So, it is descriptive type of research design. • 2.0.2 Study Area • Uttarkhan, Dhaka, and • Dakshinkhan, Dhaka.

  13. 2.0 Methodology • 2.0.3 Population and Unit of the Analysis • Number of all unorganized SME units excluded. • Target Population – All around 10,000 owners of SME. • The total number of owners of SME in Uttarkhan and Dakshinkhan is our estimated unit for the analysis.

  14. 2.0 Methodology • 2.0.4 Sampling Design • 2.0.4.1 Sampling Frame • We excluded all Industrial SME owners. • 2.0.4.2 Sampling Technique • Convenience sampling procedure used. • 2.0.4.3 Sample Size • We have considered 20 owners of the population for our sample size.

  15. 2.0 Methodology • 2.0.5 Data Collection • 2.0.5.1 Primary Data • Our primary data for the research project originated by survey. • Through questionnaires we collected primary data from every sample element.

  16. 2.0 Methodology • 2.0.5.2 Secondary Data • Major Research Articles • Determinants Of Small To Medium Enterprises (SMEs) Performance In The Zimbabwean Informal Metal Fabrication Industry: Evidence From Firm Level Data – C. Makate (2014) • Analysis of the effect of financing on profitability of small and medium enterprises (SMEs) in Nigeria: Lagos State Outlook – Taibat A. and T. Adejare (2016)

  17. 2.0 Methodology • 2.0.5.2 Secondary Data • Major Research Articles • Factors Affecting Profitability of Small Medium Enterprises (SMEs) Firm Listed in Indonesia Stock Exchange - F. Margaretha and N. Supartika (2016) • The Financial factors that Influence the Profitability of SMEs - A.E. Popa and Radu Ciobanu (2014)

  18. 2.0 Methodology • 2.0.5.2 Secondary Data • Other sources of data • Online components • Newspapers • SME Center (BSCL) – Uttara

  19. CHAPTER 3 Concept & Theory

  20. 3.1 Literature Review

  21. 3.2 Conceptual Framework

  22. 3.3 Hypothesis Development • We developed four hypotheses based on independent variables - • H1: Firm growth positively influences profitability. • H2: Owner’s experiences positively influence profitability. • H3: Debt influences a firm’s profitability positively. • H4: A firm’s size positively influences its profitability.

  23. CHAPTER 4 Data Analysis & Evaluation

  24. 4.1 Data Processing & Analysis • We used basic 5-likert scale. • Microsoft Excel 2019 used here for data analysis. • The questionnaire system used to be structured.

  25. CHAPTER 5 Findings & Interpretation

  26. 5.0 Findings & Interpretation • H1: Firm growth positively influences profitability. (4.13; Accepted) • H2: Owner’s experiences positively influence profitability. (4.05; Accepted) • H3: Debt influences a firm’s profitability positively. (3.63; Accepted) • H4: A firm’s size positively influences its profitability. (3.93; Accepted)

  27. 5.0 Findings & Interpretation • The hypothesis standard result level is 3 & our Hypothesis result is higher than 3. • Majority of the respondent agreed that growth, experience of owner, debt and firm size has positive influence on profitability of SME.

  28. CHAPTER 6 Recommendations & Conclusion

  29. 6.0 Recommendations & Conclusion • Result shows that these factors have positive and significant influence on profitability. • However, there are some other factors which were not identified by this study due to time and other constraints. • Therefore, there is an ample scope to identify those factors or variables by conducting further research with more samples.

  30. Thank You

  31. Do you have any question?

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