Preliminary Financial Analysis

In assessing technology opportunities, it is important to understand what the opportunity is, whether it represents a sustainable competitive advantage, the market for the opportunity, a preliminary financial analysis, and a discussion of personnel who are key to exploiting the opportunity. 

In writing a preliminary financial analysis, the main point is to determine whether the business has sufficient margins and volume to justify a business. This can range from a simple back-of-the-envelope breakeven analysis to a more complete set of 3-year pro forma. More formal texts on entrepreneurship (Timmons, 1999), business planning short courses and workbooks (www.fasttrac.org), and business planning software (www.bplan.com) can be used on the more formal end of this planning spectrum. 

Many of the most promising options will require significant levels of funding to proceed. The preliminary financial analysis will help estimate the cash needs to get started, but the entrepreneurial engineer s tendency toward optimism will, in this case, tend to underestimate cash needs. 

Section 1 of the guidelines establishes the context of the submission. It asks for a description of the drug, its use on the PBS and the therapies that wiU be co-administered or substituted. Section 2 asks for the best available evidence on the clinical performance of the drug, including the scientific and statistical rigour of randomised trials, and a preliminary economic evaluation based on evidence from the randomised trials. Section 3 describes when extrapolation beyond the preliminary economic evaluation maybe made and how adjustments can be made in a modelled economic evaluation. Section 4 requests a financial analysis from the perspective of the PBS and government health budgets. 

The preliminary engineering phase is where the options are designed and costed. Financial analysis is conducted and the options are recycled to business planning in an iterative fashion. 

Capital Investment. Erom the viewpoint of a project, all of the capital that must be raised is external capital. Equity capital is the ownership capital, eg, common and preferred stocks or retained cash, whereas debt capital consists of bonds, mortgages, debentures, and loans. Nearly all investment involves a mixture of both types so as to maximize the return on investment (21). The debt ratio (debt/total capital) for the chemical industry is typically over 30%. Because financial details are not well known during the preliminary phases of project analysis, the investment is viewed simply as the total capital that must be expended to design and build the project. 

A second reason is due to the absence of preliminary risk analyses in everyday activities involving chemical substances. Only sensitive activities are subjected to analyses (mainly because of what is at stake and for financial reasons). This is due to, on the one hand, the absence of literature on how to diagnose a priori risks and, on the other hand, the difficulty of such an analysis,(the chemistry being difficult). Finally, preliminary risk analyses are not part of managerial experience and work practice. 

The same authors also used the method just described to determine STR in meat and milk. For honey analysis, HPLC was compared with ELISA. The possibility of using the ELISA test was discussed for screening with and without SPE cleanup. A preliminary cleanup was absolutely necessary, because too many false positives (24%) were observed. After the SPE cleanup of the honey extract, ELISA results were quite in accordance with those observed by HPLC, and almost no false positives (4%) were recorded. However, because each positive ELISA result must still be confirmed by HPLC, the usefulness of this test is open to discussion. Considering the high financial cost and the time needed, this method really seems suitable only if a large number of samples must be analyzed. Comparison between the HPLC and ELISA results indicated a relatively good correlation between the techniques. However, the ELISA repeatability (CV of ca. 11 %) was not as good as that of the HPLC (CV of ca. 6%) (108). 

Another aspect of the court s role relates to expert testimony. A trial judge has broad discretion to consider whether a witness is qualified as an expert, and whether the expert s knowledge will assist the jury. In response to concerns about the prevalence of "junk science" in federal civil cases, the Supreme Court recently determined that this requires a preliminary assessment of whether the expert s reasoning and methodology is scientifically valid (223).Technical or financial expert analysis that does not satisfy accepted standards in the expert s particular field is subject to exclusion. 

The preliminary study helped obtain information on which of the researched companies dealt with analysis of risk caused by operation on an international scale (Figure 5.2). The results of the research show that the people responsible for risk analysis are most often the owner or the president of the company. Only one company had appointed a risk manager. As few as 13 respondents had chief financial officers. In turn, 124 companies answered that no one is responsible for the risk analysis. 

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