Global Journal of Management and Business Research, A: Administration and Management, Volume 22 Issue 8

reporting changes. The ZETA model has been found to outperform alternative bankruptcy classification strategies in terms of expected cost criteria utilising prior probabilities and explicit cost of error estimates (Altman, 2000). Altman (2000) states that in other studies a number of financial ratios and other measures have been found to be helpful in providing statistical evidence of impending failures. The analysis covered 27 variables based on their use in credit analysis. After a careful process of reducing the number of variables, a seven- variable model was selected which not only classifies the test sample accurately, but also proves the most reliable in various validation procedures. That is, adding more variables could not significantly improve on the results, and no model with fewer variables performed as well (Altman, 2000). The seven variables for the ZETA model are: return on assets, stability of earnings, debt service, cumulative profitability, liquidity, capitalisation and size. These models are used as a basis for ratio analysis and interpretation. They use a combination of similar ratios to give a single score that can be interpreted to efficiently predict business failure. The ZETA credit model has a much higher accuracy than the MDA model more than two years prior to bankruptcy, but the former is a proprietary model, available only to subscribers to ZETA Services Inc. III. O bjectives and R esearch D esign The main objective of the study reported on in this article was to investigate the financial performance measures used by manufacturing SMEs in Pretoria, South Africa. The secondary objectives of the research were to: • identify financial tools currently used by manufacturing SMEs in measuring their financial performance; • recommend necessary improvements to financial performance measures used by manufacturing SMEs; and • recommend necessary training interventions for manufacturing SMEs that would be needed to successfully measure financial performance. This article is based on an exploratory case study approach and qualitative research. However, a mixed qualitative-quantitative method was used in the data analysis. The units of analysis were the members or elements of the population, in this case manufacturing SMEs in Pretoria, South Africa. The units of observation were the people interviewed, namely the managers or owners of the manufacturing SMEs. Taking into account that there is no complete list of SMEs in South Africa, judgement (purposive) sampling (a non- probability form of sampling) was used to select a sample. Ten owners or managers of the selected SMEs were interviewed. There is no ideal sample size for qualitative studies, but the number of participants in this case is in keeping with the guidelines set for both case studies and interviews. Eisenhardt (1989) proposes between four and ten, and Creswell (2002 ) three to five. Guest, Bunce and Johnson (2006) suggest that between six and twelve interviews should suffice. The small sample is also congruent with the interpretivist research philosophy as proposed by Saunders, Lewis and Thornhill ( 2009 ), as is the data collection technique of interviewing. Guest et al. (2006) maintain that saturation, the point at which no new information or themes are added, especially at a meta-theme level, can occur as early as six interviews. The unit of analysis was the individual Generation X participant interviews at the theme level (Babbie, 2007; Perry, 2001). Semi- structured interviews were used to collect data at the premises of the participant SMEs, using an interviewer- administered questionnaire. Information from the interviewed SMEs was gathered, analysed and interpreted. Given the information sought, thematic content analysis appeared to be the most appropriate analysis technique. Qualitative content analysis goes beyond merely counting words or extracting objective content from texts to examine meanings, themes and patterns that may be manifest or latent in a particular text. Qualitative content analysis is mainly inductive, grounding the examination of topics and themes, as well as the inferences drawn from them, in the data. In some cases, qualitative content analysis attempts to generate theory (Zhang & Wildemuth, 2011). IV. R esults a) Characteristics of SMEs The SMEs studied were from various sectors of manufacturing, classified in terms of the products manufactured; these included steel components and hand tools, automotive parts, industrial ovens, corrugated boxes, rubber, exhaust systems and accessories. Table 1 summarises the profile of the participant SMEs Financial Performance Measurement of Manufacturing Small and Medium Enterprises in Pretoria, South Africa: A Multiple Exploratory Case Study 36 Global Journal of Management and Business Research Volume XXII Issue VIII Version I Year 2022 ( ) A © 2022 Global Journals