Page 249 - Social Enterprise A New Business Paradigm for Thailand

8.2.3 Data Analysis
The data analysis is divided into three main approaches, each briefly described as follows:

1) Measuring the concentration of total income and net profit among social enterprises

This analysis employs two key indicators: (1) the concentration ratio (CR), specifically
focusing on the top four enterprises, referred to as CR4, and (2) the GINI coefficient (GC).
Both methods are briefly described below.:

▪ The concentration ratio (CR) is an index that indicates the market share held by the largest
enterprises among the social enterprises under study, based on either total income or net
profit. It ranks enterprises from the largest downward, and in this study, it focuses on the
top four enterprises, referred to as CR4. This value reflects the combined share of total
income (or net profit) held by the top four. A CR4 of 0.67 or higher indicates high

concentration; a value between 0.34 and 0.66 indicates moderate concentration; and a
value below 0.33 indicates low concentration. However, while the CR is useful for
emphasizing the dominance of a few large enterprises, it does not capture the overall
distribution of income or profit among all social enterprises in the sample.

▪ The GINI coefficient (GC) is a widely used indicator of inequality, with values ranging from
0 to 1. A value closer to 1 signifies greater inequality, while a value nearer to 0 reflects a
more equitable distribution. Although traditionally applied to income distribution, the GC
has also been used to assess disparities in other domains, such as the distribution of income,

land ownership, and other assets. In this study, the GC is used to measure the distribution
of total income and net profit among the social enterprises in the sample, thereby
illustrating the degree of financial concentration. The GC is calculated from unordered data
using the relative mean difference. A GC value approaching 1 indicates a high level of
concentration in income or net profit, whereas a value approaching 0 suggests a more
balanced distribution.

2) Financial sustainability is assessed through financial ratio analysis using seven key indicators:
total income, net profit, net profit margin (NPM), current ratio, debt-to-equity ratio (D/E),

return on assets (ROA), and return on equity (ROE). These indicators are calculated using
data only from social enterprises that submitted financial reports, with the number of
reporting entities varying by year and by indicator. Each of the seven indicators is briefly
defined below.

▪ Total income refers to all revenue generated from the sale of goods or provision of services
that align with the social enterprise’s primary mission, as well as income from other
operations not directly tied to core activities.

▪ Net profit is the residual amount after deducting total expenses, financial costs, and
income tax from total income. A positive value indicates profit, while a negative value
reflects a net loss.

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