An Exploratory Analysis of Illiquid Assets: A Case Study On Dicopay Company

Abstract: In Business life, whether companies are selling goods or services, one thing is certain: cash is king. The success of a Small-to-Medium-Enterprise depends on the money at hand, and a series of aspects can positively or negatively influence the availability of cash. This study focuses on how lateness in payments can determine cash flow problems, determining illiquid assets at the hands of companies. Previous studies have highlighted how businesses could face problems by waiting for revenues from customers, but no studies have identified what is the real impact of this situation. In addition, up until now, companies offering financing or payment solutions have not paid attention to this problem, except for one. More precisely, a Startup based in Sweden has offered a Buy-Now-Pay-Later solution that could help remove lateness in payments and resulting illiquid assets. Therefore, the aim of this study is to quantitatively assess the potentiality of this solution and, through bivariate and multivariate analyses, show what could be the impact of this Startup. In the business realm, organizations are affected by a new offer in a different way, and that is why the data analysis goes from generic to specific to see how should the offer be launched in the market in order to create an uncontested market space, as the Blue Ocean Strategy suggests. Results show indeed that service companies could be more positively affected by this new way of financing/payment. More precisely, lawyers are, based on the statistical outcomes of this paper, the ones with the highest impact of this solution on the illiquidity of assets. The conclusions of this paper might be helpful for the Startup to identify which segment of the market must be targeted at the beginning to then create Word of Mouth and increase the network. Nonetheless, the usefulness of the results may be found also by companies who are struggling with lateness in payments, such that they would understand what should be done to remove the aforementioned problem.