Page 36 - IMDR MSME BOOK 2021

Managing Finance in Micro, Small & Medium Enterprises
proceeds. However, of the four, likely the best
measurement of a rm's health is the level of its
protability.
One of the most important tasks successful business
owners undertake is monitoring their nancial health on
a regular basis. The management who understands
where the business currently stands from a performance
standpoint as well as where it’s heading hold a huge
advantage over those who choose not to monitor the
nancial health periodically. The assessment of nancial
health of MSME is imperative to keep check on the
performance of the rm as the scale of operations is
limited, any sign of nancial trouble can prove to be
detrimental to the well-being of the rm and even it may
challenge the survival of the small rms. In the research-
based study, attempt has been made to know whether
the respondent rms (MSMEs) are assessing their
nancial health regularly or not in order to take
corrective measures timely.
Therefore, the question has been asked to the
respondent business units that have they dened key
parameters for monitoring nancial health of your
organization. The 72% of the respondents have dened
the key parameters to monitor the nancial health of
their organization. The majority of the respondents have
well dened parameters for monitoring nancial
performance of the business which creates more
certainty and condence in making both short-term and
long-term decisions. This in turn leads to a healthier
business and faster growth rate. When it came to the
frequency of monitoring nancial health of the
enterprise, it is found that 36% of the sample monitored
parameters monthly, 25% of the units covered monitored
nancial health parameters quarterly, 7% of them
monitored half yearly, 13% of them monitored nancial