Advanced Medical Technology Corporation 1
Jessica Betts
Cecilia Hibbard
Celeste Maldonado
Niza Oun
Jessica Betts
Cecilia Hibbard
Celeste Maldonado
Niza Oun by by Advanced Medical Technology Corporation Advanced Medical Technology Corporation
TABLE OF CONTENTS
Question 1 2
Question 2 4 question 3 7 question 4 9 question 5 11 question 6 13
1. What has created the need for additional finance by AMT since 1983?
Extraordinary sales growth for AMT of 30% annually is resulting in major operating losses, and external funds are necessary to be able to continue with this rapid expansion. The net operating losses from 1983-1985 were $1,289,000 in 1983; $1,176,000 in 1984; and $1,487,000 in 1985. The bulk of these losses were a direct result of both SG&A and R&D.
The President of AMT believes that sales will continue to grow at the same rate at 30% annually for the next 5 years. However, cost of goods sold and SG& A is growing at 45% and 40% respectively. In addition, accounts receivable has also continued growing at 96.75% over the last 2 years, and thus, the cash cycle time has also increased. The 2-year growth rate for R&D is high at 89.22%, which has led to a shortage in cash.
All of these things have resulted in the additional need for financing by AMT to maintain its current market position and to aggressively enter new markets.
The Net Working Capital of AMT is the Current Assets less the Current Liabilities. | | | | | | | | | | 1983 | 1984 | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | Current Assets | $7,617 | $12,370 | $17,700 | 17,848 | 23,203 | 30,164 | 39,213 | 50,977 | Current Liabilities | $2,965 | $11,056 | $9,942 | 4,510 | 5,853 | 7,599 | 9,869 | 12,820 | NWC | $4,652 | $1,314 | $7,758 | $13,338 | $17,350 | $22,565 | $29,344 | $38,157 |
Based on the above information, NWC has increased over the last 6 years. The current assets are made up of accounts receivable and inventories, as well as cash and cash
Cecilia Hibbard
Celeste Maldonado
Niza Oun
Jessica Betts
Cecilia Hibbard
Celeste Maldonado
Niza Oun by by Advanced Medical Technology Corporation Advanced Medical Technology Corporation
TABLE OF CONTENTS
Question 1 2
Question 2 4 question 3 7 question 4 9 question 5 11 question 6 13
1. What has created the need for additional finance by AMT since 1983?
Extraordinary sales growth for AMT of 30% annually is resulting in major operating losses, and external funds are necessary to be able to continue with this rapid expansion. The net operating losses from 1983-1985 were $1,289,000 in 1983; $1,176,000 in 1984; and $1,487,000 in 1985. The bulk of these losses were a direct result of both SG&A and R&D.
The President of AMT believes that sales will continue to grow at the same rate at 30% annually for the next 5 years. However, cost of goods sold and SG& A is growing at 45% and 40% respectively. In addition, accounts receivable has also continued growing at 96.75% over the last 2 years, and thus, the cash cycle time has also increased. The 2-year growth rate for R&D is high at 89.22%, which has led to a shortage in cash.
All of these things have resulted in the additional need for financing by AMT to maintain its current market position and to aggressively enter new markets.
The Net Working Capital of AMT is the Current Assets less the Current Liabilities. | | | | | | | | | | 1983 | 1984 | 1985 | 1986 | 1987 | 1988 | 1989 | 1990 | Current Assets | $7,617 | $12,370 | $17,700 | 17,848 | 23,203 | 30,164 | 39,213 | 50,977 | Current Liabilities | $2,965 | $11,056 | $9,942 | 4,510 | 5,853 | 7,599 | 9,869 | 12,820 | NWC | $4,652 | $1,314 | $7,758 | $13,338 | $17,350 | $22,565 | $29,344 | $38,157 |
Based on the above information, NWC has increased over the last 6 years. The current assets are made up of accounts receivable and inventories, as well as cash and cash