Small and medium-sized enterprises (SMEs) play a foundational role in national economies by contributing significantly to employment generation, innovation, and economic resilience. Despite their importance, SMEs consistently face structural, financial, and managerial challenges that limit their growth potential and long-term sustainability. Among these challenges, financial management practices, access to finance, financial literacy of owners and managers, and strategic decision-making frameworks emerge as central determinants of SME performance. Drawing strictly on established academic literature, this study develops an integrated research narrative that examines how financial literacy, accounting standards adoption, capital structure decisions, risk management, corporate social responsibility, and strategic orientation interact to shape SME financial performance and resilience.

The article adopts a comprehensive theoretical and descriptive analytical approach, synthesizing insights from corporate finance theory, SME growth models, financial literacy research, and risk management frameworks. It elaborates extensively on how financial knowledge and managerial competencies influence financing decisions, compliance with financial reporting standards such as IFRS for SMEs, and the ability of firms to navigate financial constraints. Particular attention is given to the behavioral dimensions of SME owners, including default behavior, risk perception, and strategic orientation, which often differ significantly from those observed in large corporations.

By integrating perspectives from diverse empirical and conceptual studies, this research identifies critical gaps in the existing literature, particularly the lack of holistic frameworks that connect financial literacy, financial management practices, and strategic behavior in SMEs. The findings highlight that SMEs with higher levels of financial literacy and structured financial management systems are better positioned to access external finance, manage risks, and sustain performance during periods of economic uncertainty and crisis. Furthermore, the article underscores the growing importance of responsible financial management and corporate social responsibility practices as strategic tools rather than compliance-driven activities.

The study contributes to the academic discourse by offering a unified theoretical framework that explains SME financial performance through interconnected financial, strategic, and behavioral dimensions. It also provides valuable implications for policymakers, financial institutions, and SME support organizations seeking to enhance SME resilience and competitiveness. The article concludes by outlining directions for future research, emphasizing the need for longitudinal and cross-country studies that further explore the dynamic relationships between financial literacy, financial management practices, and SME performance.