Michiko Miyamoto

(Akita Prefectural University, Japan)

 

 

Abstract: The purpose of this study is to investigate indicators needed for credit risk measurement for Japanese Small and medium-sized enterprises (SMEs), using financial information, as well as corporate information of a large SMEs database. Since this data include non-financial information with categorical data, the author applies a multinomial logit regression analysis to develop the model. The analyses in this study show that not only financial information but non-financial information is the valuable source for a SMEs risk assessment. Sales (log), internal reserves to total assets ratio, ROA, interest coverage ratio, debt to equity ratio, and operating profit to sales ratio are statistically positive and significant financial ratio. Firms which do not own real estates are statistically significantly positive.

 

 

Key words: credit risk assessment; SMEs; multinomial logistic regression mode; financial information; non-financial information

 

JEL code: G31