Browsing by Author "Bratt, William"

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Cash flow and capital employed: Its relationship and impact on firm value – a Case Study of a firm operating in the technique development industry
(2015-10-01) Bratt, William; Larsson, Linnéa; University of Gothenburg/Department of Business Administration; Göteborgs universitet/Företagsekonomiska institutionen
Introduction: Maximizing the shareholder value is the main purpose for many firms. To be able to do so it is important to work with the firm’s cash flow and return on capital employed. Many firms only focus on generating a good profit and forget or find it complicating to work with the cash flow due to difficult calculations. These problems are often face on lower levels such as for business units. By improving the Return on Capital Employed and Cash Flow already at lower levels it will have a greater impact on the whole firm. It will also be easier for a deeper look to find slacks and which factors the company need to work with. Purpose: The purpose with this study is to make it easier for the financial managers to work with cash flow at lower levels by creating a simpler cash flow model. The study also aims to highlight the relationship between capital employed and cash flow. Method: A case study is performed and the essay uses a quantitative approach with help of a qualitative method for a deeper analysis. Two simpler cash flow models is created and analyzed on each of the three business units. Important variables and how those affect ROCE is investigated from earlier research. The relationship between the Capital Employed and Cash Flow is analyzed. Conclusion: The study shows that both of the models can be used when calculating cash flow for a whole year. When considering monthly basis there is still some improvement that needs to be made. The study provides propositions for further improvements, since the study its self is limited in this area because of lack of information. The created model 1 is recommended over model 2, since it provides a better overall result and would also be easier to adjust when needed. The study shows that there is a relationship between capital employed and cash flow. It also confirms earlier researches regarding which parameters that influence ROCE the most.
Innovative Revenue Models and their influence on the components of the Business Model: A multiple case study on global manufacturing firms
(2018-07-31) Bratt, William; Dynefors, Viktor; University of Gothenburg/Graduate School; Göteborgs universitet/Graduate School
Background: Manufacturing firms have developed innovative revenue models (IRMs) that are connected to their product-service offering, as a new way to differentiate. These new revenue models are dependent on usage, performance, or value delivered to the customer. The value proposition becomes connected to the actual input or output of the customers’ own business operations. Thereby, the customers’ experience value from being exposed to less risk since the service they are acquiring is adapted to their own business model (BM). However, these IRMs create several complications for manufacturing firms, which is why several have struggled with the implementation, and some even failed. The current academic papers provide a vague explanation of how manufacturing firms are affected when implementing an IRM. Purpose: This study aims to provide guidance for manufacturing firms in how their BM will become affected when implementing an IRM. Research Question: How are the Business Model components of large global manufacturing firms influenced when implementing an Innovative Revenue Model? Methodology: A qualitative strategy with an abductive approach has been chosen since the study investigates how the different BM components are influenced when implementing an IRM. To acquire a deeper understanding a multiple case study based on semi-structured interviews has been conducted. Findings: The study has found influences on the BM components that the current literature has been unable to explain, which further highlights the difficulties in understanding the influences an implementation of IRMs creates. For example, the case companies mention the need for developing capabilities of appropriate monitoring of the contracts through business case owners and diverse ways of how to manage the distribution of spare parts and replacement products. Furthermore, IRMs will lead to more complex accounting due to the uncertainty in the revenue streams, and highly automated administration is required to not letting an administrative burden erode the business case. Conclusion: A comprehensive framework has been created of how the diverse BM components are influenced, and the influences for some of the components are highly dependent on the company characteristics prior to the implementation of an IRM. However, the value proposition, revenue streams, and cost structure has been found as the most influenced independently on company characteristics, which can be explained by the fact that these components are related to the revenue capturing process. Furthermore, funding the revenue model, product knowledge, cost awareness, contract management, and efficient administration are considered as prerequisites for implementing an IRM. Additionally, the study has found that IRMs enable the customer to avoid the IFRS16 regulation which creates a potential for highly profitable business cases.