Building Financial Power in Small and Medium Enterprises

This paper examines the critical yet underutilized role of financial ratio analysis in enhancing the crisis preparedness and resilience of small and medium enterprises (SMEs). Drawing from recent studies, the paper synthesizes evidence showing that when ratio analysis is performed systematically and integrated into daily management, it can act as an early warning system and guide proactive decision-making during economic shocks. While large firms have demonstrated the effectiveness of real-time liquidity, solvency, and profitability monitoring during the COVID-19 pandemic, SMEs often lack the technological and governance capacity to do the same. This research highlights the potential of affordable digital dashboards, sector-specific benchmarking, and governance improvements to close this gap. Policy recommendations emphasize training, ecosystem support, and incentives to promote transparency and regular ratio use. Ultimately, the study underscores that ratio analysis must shift from a static compliance exercise to a dynamic, digitally enabled management practice if SMEs are to build robust resilience in an era of uncertainty.