Advanced Medical Technology Solution Essay

Would you, as Mr. Winter, recommend a add to AMT? If so, on what basis? As Mr. Winter, I would recommend a loan to innovative Medical Technology Corpo dimensionn (AMT). There are s eeral reasons wherefore I would recommend a loan to AMT. The biggest factor is this company is becalm in the increment / infancy stage of its life cycle. They have invested capacious amounts of capital into the research and development, and marketing of its products, and it is too soon to see the rewards from these investments. about of the changes that need to be made in order for a loan to be approved for AMT include improving manufacturing efficencies, short-term loans, operations, and managing their accounts recieveables. The manufacturing operations of AMT butt be streamlined which will enable AMT to see greater profits. even out now they are building in ten to twelve week readiness sizes, and they are not always making the products they need. With the investment into a information system, t hey can streamline this process.This was installed in 1984, and they are making progress. I would recommend reshuffling some positions (i. e. , MRP, planning, master data) in order to harbor the full benefit of the information system. They can build larger lot sizes of some products which will cut pile on the direct jab costs for the materials. Making only the products they know they have demand on will minimize the excess and obsolesnce amount they have to reserve for individually quarter.AMT can also improve its accounts receivable days outstanding ratio by having more control over its A/R. Having soul do background checks on in the raw customers instead of granting all new customers the same 30 days. Some customers with poor assurance history should be returnn no credit, and must remunerate COD or in advance the products are shipped to minimize risk of default. Well-known customers or customers with great credit can be given more than 30 days. Also, collection of past-d ue accounts should be pursued more aggressively.Based on the criteria mentioned, and the financial statements, I would give AMT the full $8 million line of credit. The company has had great growth in its revenues. Although this company has not been profitable over the last 3 years, if it had to turn a profit, it could do so by eliminating research and development. proficient by selling existing products, it would have had a net income of $3. 8 million in 1985 if it did not have the research and development expense. I am not advising the removal of R&D, I am safe providing a worst case scenario for the company.Ending the R&D section would cause no new products, and new improvements to existing products in an ever changing evenronment. This company has the potential to become profitable in 1986, and pay down significant amounts to its debt by the end of 1987. And they need to pay down some debt in order to improve their operative capital which was delightful in 1983, but because of expenses (possibly related to the installation of the information system) in 1984 its working capital has soured.