Advanced Medical Technology Corporation

Question - Would you, as Mr. Winter, recommend a loan to AMT? If

so, on what basis?

As Mr. Winter, I would recommend a loan to Advanced Medical

Technology Corporation (AMT). There are several reasons why I

would recommend a loan to AMT. The biggest factor is this company

is still in the growth / infancy stage of its life cycle. They have invested

large 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. Some 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 can be streamlined which will

enable AMT to see greater profits. Right now they are building in ten

to twelve week lot sizes, and they are not always making the products

they need. With the investment into a information system, they 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 obtain the full benefit of

the information system. They can build larger lot sizes of some

products which will cut down on the direct labor 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 each quarter.

AMT can also improve its accounts receivable days outstanding ratio by having more control over it's A/R. Having someone do

background checks on new customers instead of granting all new customers the same 30 days. Some customers with