Details

Case

Educator Copy

Antibiotics Private Limited

Shazia Imtiaz


INDUSTRY : Pharmaceutical

AREA : Finance

ORGANIZATION : Antibiotics Private Limited

LENGTH : 10

LUMS No : 02-170-90-1

PUBLICATION YEAR : 1990

DESCRIPTION

KEYWORDS:

Antibiotics,Private,Limited,Finance,Pharmaceutical,Chemicals,Plant,Funds,Breakeven,Analysis,Working Capital


DESCRIPTION:

Antibiotics (Pvt) Limited was the only plant in Pakistan that produced basic Penicillin. The company was established in 1958, and since then had suffered repeated losses. In 1989, it filed a request for a short-term finance facility with the Pakistan Development Finance Institution (PDFI). R I Khan, a senior investment officer at PDFI had to evaluate APL's estimate of its working capital needs, the probable schedule of repayment on the loan, and the nature and degree of risks that PDFI would be incurring in lending to APL. The case is designed to illustrate the mechanics of financial forecasting, the use of such analytical techniques as breakeven analysis and the sources and uses of funds statement.


LEARNING OBJECTIVES:

1) The mechanics of financial forecasting by using the explicit and implicit information provided. 2) The use of various techniques such as the breakeven analysis and the sources and uses of funds statement, for the evaluation of a firm's existing and potential financial position. 3) The importance of planning for orderly growth.


SUBJECTS COVERED:

Finance