<![CDATA[This study aims to examine and determine the effect of firm size and profitability on the financial performance of SMEs in Batu City. This study uses a quantitative approach with a causal associative research type to test the established hypotheses. The data used in this study are secondary data in the form of SME financial reports obtained from the Batu City Cooperatives, Industry, and Trade Office (Diskoperindag). The population in this study is all SMEs in Batu City, totaling 3,208 business units. The sample determination uses a purposive sampling method with certain criteria so that a sample of 71 SMEs is obtained. Data analysis techniques used include descriptive statistical analysis, classical assumption tests, multiple linear regression analysis, hypothesis testing (t-test), simultaneous tests (F-test), and coefficient of determination with the help of the SPSS program. The results of the study indicate that firm size has a positive and significant effect on the financial performance of SMEs in Batu City. Profitability also has a positive and significant effect on the financial performance of SMEs in Batu City. Furthermore, firm size and profitability simultaneously significantly influence the financial performance of SMEs in Batu City. The Adjusted R-Square value of 36% indicates that firm size and profitability variables are able to explain 36% of the variation in SME financial performance, while the remaining 64% is influenced by other factors outside this research model.]]>
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