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Advanced Medical Technology

In: Business and Management

Submitted By pbhati
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CASE 2. BA 280.1

The case analysis focused into determining whether Tom Winter (Western National Bank) shall approve Peter Haskins’ (Advanced Medical Technologies) application for an $8M loan.
Advanced Medical Technologies, a young company who has invested in research and development and marketing in its three years of operations (1983-85), is seeking for WNB’s approval of the said loan to fund their growth to 1986. This was despite the fact that the company has already availed of short-term loans from Sunnyvale and two other banks and in all accounts fell short of meeting their responsibilities. On top of this, AMT has also opened itself to Biological Laboratories’ buying of shares and possible merger.
Using Tom Winter’s perspective, the 3-year financial statements of AMT was analyzed and revealed that the company’s operating expenses have continually increased over the 1983-85 period, overdrawn credit limit at Sunnyvale. Despite these seemingly negative indicators of AMT’s financial health, the company still presents itself as a strong player in the industry with its Gross Profit (GP) Ratios which increased from 48 to 55% from 1983-853. For AMT to realize its full potential, it must ensure that it has facilities in place to support production.
Hence, the group came to a conclusion that Mr.Winter should approve the entire $8M which AMT applied for. Furthermore, so as for WNB to continuously support AMT’s financial needs, Tom Winter should impose the following conditions to Mr.Haskins:
a. AMT to determine when will their R&D and Marketing investments would pay-off
b. AMT to settle its financial responsibilities with Sunnyvale and the other two banks
c. AMT to keep its R&D ratio at 40% of sales
d. AMT to provide detailed cash budget for the year.

Peter Haskins, President of...

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