Econometric analysis of the financial sustainability of popular and solidarity economy organizations

Objective. To evaluate the financial sustainability of popular and solidarity economy organizations in Ecuador. Methodology. Employing an econometric approach, the natural logarithm of income was structured as the dependent variable and indicator of sustainability, including ratios of profitability, liquidity, equity indebtedness, and asset indebtedness. The independent variables in the study were the natural logarithm of assets and the sector classification. Results. Liquidity, economic profitability, asset size, and production sector membership are significant variables explaining financial sustainability; thus, popular and solidarity economy organizations function structurally as free market enterprises, requiring immediate credit lines and liquidity to meet their obligations or cover production costs. Furthermore, as they grow, they are capable of capitalizing on resources and achieving higher profitability. Conclusions. The financial sustainability of an organization can be assessed by examining its income, which is highly contingent on the explanatory variables whose management is aimed at achieving the organization's long-term survival and success in the market.