Investments in Practice : A study of how small family owned companies within the county of Småland perform their investment calculations

• Main Authors: Johansson, Andreas, Andersson, Jakob
• Format: Others
• Language: English
• Published: Internationella Handelshögskolan, Högskolan i Jönköping, IHH, Företagsekonomi 2005
• Subjects: Business studies; Företagsekonomi
• Online Access: http://urn.kb.se/resolve?urn=urn:nbn:se:hj:diva-254

After several years of declining investment levels, it changed during 2004 and the investments in the Swedish industry increased. New information shows that there is a change in the investment conjunction; several branches report plans that indicate an increase in investments the next coming years. An investment in a machine is for a small private company often a large investment. The investment will lead to both a cost and an asset for the company that can have a huge impact of the profitability for the company. The small company has normally not the same access to expert recourses. Often the same person is handle the different roles and also within a limit of time. Investments are normally rarer in a small company and as a result of that it makes it harder to keep a high level of investment competence. Therefore, small companies often apply a more simple investment model. How the investment process is handled in a small company varies and it is also often very personal attached. The purpose of the thesis is to study how small family owned companies within the county of Småland makes calculations of their investments within the production process. Furthermore, consider the purpose and the importance of the calculation. Moreover, consider aspects that affect the investments and the investment decision. Finally, give suggestions for improvements within the investment calculation. To receive all the needed information to this study, semi-structured qualitative interviews have been made. The interviews have been made with the executive chief and the owner of the selected companies, which have been the same person. The selection of companies has been made from several different selection criteria’s such as turnover, number of employees, and yearly revenue. The Empirical study consists of four different small family owned companies. The information from the interviews are compared and analysed with previous studies and theory, this to receive a good comparison over years and between different sizes and types of companies. The study also gives small family owned companies suggestions for improvement within their investment calculation. The results form the interview and the analysis have given the study the following conclusions. Small family owned companies within the county of Småland does not make much investment calculations and they do not in very large extend use instructions or routines they do not either use a fully calculation method instead they use a “home made” method, which could be deduced from the pay-back method.