THE IMPORTANCE OF INDEBTEDNESS AND PROFITABILITY INDICATORS IN ASSESSING THE PERFORMANCE OF SMEs

This study aims to present the importance of the information provided by financial accounting in assessing the performance of economic entities in the form of SMEs. In this regard, a study was conducted that presents structural data on the economic and financial indicators of the largest SMEs, by turnover in 2023, from each of the five Counties of S-W region of Oltenia, Romania. Subsequently, the assessment of the performance of these SMEs was taken into account by calculating and analyzing the main debt and return indicators. The research methodology used was based on the analysis of the documents available on the website of the Ministry of Finance in Romania. The research question was: Is the financial and accounting information provided by the annual financial statements relevant in assessing the performance of SMEs? The results showed that the annual financial reports of SMEs facilitate the monitoring and evaluation of performance with the help of economic and financial indicators. Knowledge and use of financial and accounting information relevant to the economic entity represents the fundamental raw material in the adoption of the managerial decisions. Financial and accounting information represents the starting point of any form of analysis used to establish the realistic, objective and useful economic and financial situation of a SME, at a given time. The path to achieving performance by SMEs is directly connected to the quality and relevance of the financial and accounting information provided by the annual financial statements. The dynamics of the economy, the current social and economic conditions, the complexity of the activities of SMEs in competitive economic circumstances with major influences on managerial decisions, require the abandonment of routine and force the identification of new possibilities for increasing the relevance of financial and accounting information in the context of performance evaluation.