ABM 12 B

MARINDUQUE STATE COLLEGE

INTEGRATED HIGH SCHOOL

Financial Performance of Micro, Small and

Medium Enterprises (MSMEs) around
Marinduque State College
Main Campus

Researchers:
Alano, Chenie Lyn O.
Go, Ma. Gianne Blythe M.
Lambon, Michelle G.
Manuevo, Gelieth L.
Sarmiento, Janielle M.
Soriano, Stefhanie D.
Villanueva, Michaela P.

Research Adviser:
Mr. Armando H. Reyes, LPT
 ABM 12 B

MARINDUQUE STATE COLLEGE

INTEGRATED HIGH SCHOOL

CHAPTER I

INTRODUCTION AND IT’S BACKGROUND

This chapter leads the reader to the general topic of this study. It establishes the

background of the study, scope, context, and importance of the research by presenting the most

recent knowledge and background data.

Introduction

Micro, small, and medium enterprises (MSMEs) considerably contribute to social and

economic progress and prosperity through their entrepreneurial capacities and capabilities.

Globally, they drive economic growth and equitable development. Micro, Small, and Medium

Enterprises (MSME’s) are entities that are involved in the production, manufacturing and

processing of goods and commodities. The concept of MSME was first introduced by the

government of India through the Micro, Small & Medium Enterprises Development (MSMED)

(Act, 2006).

According to the World Bank, Micro, Small, and Medium Enterprises (MSMEs) are

defined as micro-enterprises: 1–9 employees; small: 10–49 employees; and medium: 50–249

employees. However, the local definition of MSMEs varies from country to country, and is

based not only on the number of employees but also on the inclusion of other variables such as

turnaround and assets. MSMEs play an essential role in the wider ecosystem of firms. Start-ups

and young firms, generally small or micro firms, are the primary source of net job creation in

many countries and are the driving force of innovation and sustainability in the private sector.
 ABM 12 B

MARINDUQUE STATE COLLEGE

INTEGRATED HIGH SCHOOL

There are about 365-445 million MSMEs in emerging markets: 25-30 million are formal SMEs,

55-70 million are formal micro and 285-345 million are informal enterprises.

The determination of what constitutes a Micro, Small, and Medium Enterprise (MSME) is

based on its total assets. This is provided in Republic Act No. 6977, as amended (also known as the

“Magna Carta for Micro, Small and Medium Enterprises (MSMEs)” previously called the “Magna

Carta for Small Enterprises”. MSMEs help reduce levels of poverty through job creation and

economic growth, they are key drivers of employment, decent jobs, and entrepreneurship for

women, youth, and groups in vulnerable situations. They are the majority of the world’s food

producers and play critical roles in closing the gender gap as they ensure women’s full and effective

participation in the economy and in society. (United Nations) 

MSMEs are seen as an essential engine for the economy in order for most economies to

grow, their financial management issues must be mainstreamed. The remaining section of this

essay includes the relevant literature, data, and methods, as well as the findings of the empirical

study and conclusions.

 ABM 12 B

MARINDUQUE STATE COLLEGE

INTEGRATED HIGH SCHOOL

Statement of the Problem

The main purpose of this study is to determine the financial performance of micro, small,

and medium enterprises. Specifically, it sought to answer the following questions:

1. What is the financial performance of MSMEs in terms of the following:

1.1. Sales

1.2. Expenses

1.3. Profit

2. Is there any significant difference in the financial performance of the MSMEs according

to variables?

3. What is the implication of the findings of the study to the MSMEs around the MSC main

campus?

Significance of the Study

The findings of this research will provide a significant and in-depth result about the

financial performance of micro, small, and medium enterprises (MSMEs). Likewise, the result of

this study will be valuable for the following:

For the Entrepreneurs, this research can help them learn what works and what doesn't work so

they can avoid making the same mistakes. It can also help them learn from the successes of

others so they can replicate those successes.

For the Businessman, this will show that they are capable of delivering on their promises,

which instills confidence in their abilities. Furthermore, this research also helps them to attract
 ABM 12 B

MARINDUQUE STATE COLLEGE

INTEGRATED HIGH SCHOOL

and retain the best talent, as people are more likely to want to work for a business that is doing

well.

To the School, this research has been crucial in helping Filipino entrepreneurs and businessmen

to understand the factors that lead to success in businesses. It shows that the college is an

excellent breeding ground for entrepreneurs and businessmen. The research will help the college

attract more students and will also help the college to develop its programs and services to better

meet the needs of its students.

For the Researchers, this study will provide evidence that the entrepreneur or businessperson’s

actions were effective in achieving the desired goal. It can also help researchers to identify

patterns and trends in entrepreneurial and business success, which can be used to improve future

research and policy-making.

For Future Researchers, this study could be a further resource that they can use as a source of

information and proof.

Scope and Delimitation of the Study

The scope of the research is to evaluate the financial performance of Micro, Small, and

Medium Enterprises (MSMEs) located around the Marinduque State College Main Campus. The

study aims to collect and analyze data on the financial performance of the selected MSMEs,

including their revenue, expenses, profit margins, and other relevant financial metrics. The

research will also examine the factors that contribute to the financial performance of these

enterprises, such as their location, size, industry, and management practices. 

 ABM 12 B

MARINDUQUE STATE COLLEGE

INTEGRATED HIGH SCHOOL

The research will focus only on MSMEs located within a specific radius of the

Marinduque State College Main Campus, as defined by the researchers. The study will exclude

MSMEs outside this area, as well as those that are not registered with the appropriate

government agencies. The research will also not cover the non-financial aspects of MSMEs, such

as their social and environmental impact. Additionally, the study will rely on self-reported

financial data provided by the MSMEs, which may be subject to reporting biases or errors.

Finally, the study will be conducted within a limited time frame and with a limited budget, which

may impact the depth and breadth of the research findings.

Research Hypothesis

Null Hypothesis: There is no significant difference between the financial performance of

MSMEs according to their variables.

Alternative Hypothesis: There is a significant difference between the financial

performance of MSMEs according to their variables.

 ABM 12 B

MARINDUQUE STATE COLLEGE

INTEGRATED HIGH SCHOOL

Research Paradigm

Figure 1: Research Paradigm

This conceptual framework aims to illustrate what to expect to find in the study and

defines relevant variables by mapping their correlation. Inputs – the process made available to

our study, respondents’ sales, expenses, and profit. It also displays the process. Processes in the

study are analysis of data using questionnaires and statistical treatment which is sample paired –

t-test to identify the significant differences of the MSMEs financial performances according to

variables. Output defines the result of our study, which are the data the researchers collected and

the significant difference of financial performance.

 ABM 12 B

MARINDUQUE STATE COLLEGE

INTEGRATED HIGH SCHOOL

Definition of Terms

Entrepreneur. An individual who makes a business to fulfill it.

Businessman. A person who handles a business to earn money.

Innovator. A person who creates a new form of an existing product.

Marketing. The strategies to do to promote the business.

Strategy. The system of doing something to achieve the goals.

MSC. Marinduque State College

 ABM 12 B

MARINDUQUE STATE COLLEGE

INTEGRATED HIGH SCHOOL

CHAPTER II
REVIEW OF RELATED LITERATURE

This chapter presents the literature relevant to the concept of the present study. It also

analyses some studies and material on the internet to provide sufficient background and

information necessary for the completion of this study.

 ABM 12 B

MARINDUQUE STATE COLLEGE

INTEGRATED HIGH SCHOOL

CHAPTER III

METHODOLOGY

This chapter presents the methodology used for collecting the data needed for the study.

It includes the Research Design, Research Locale, Research Population and Data Gathering

Procedure, Statistical Tool, and Ethical Consideration.

Research Design

This study used a quantitative in design, descriptive in method to highlight the objective

measurements and the mathematical, statistical, or numerical analysis of the data gathered.

According to Dan Fleetwood (2023), quantitative research is a systematic investigation of

phenomena by collecting measurable data and implementing mathematical techniques. The

purpose of this method is to obtain wider knowledge and understanding of the social world and

to observe situations that affect individuals.

This research study will undergo survey research, where researchers pose the same set of

predetermined questions to an entire group, or sample, of individuals. The main objective of this

research is to find out the significant difference in the financial performance of MSMEs around

MSC Main Campus.