From Balance sheet to economic analysis

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From Balance sheet to economic analysis

• Dott.ssa Notaro
• Dott.ssa Stefanoni

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What we are going to study

• Balance sheet analysis and Income Statement
  analysis
• Financial CBA
• Economic CBA

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Producing ARV in Sub-Saharan Africa
Project Objective

• The project aims to increase the offer of
  Antiretroviral drugs in Sub-Saharan Africa by
  reducing the price of Antiretroviral therapy
• Project stakeholders
• Private sector Sigma Tau
• Government Sudan Government

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Project activities

• Build up a plant to produce and can
  Antiretroviral (ARV) drugs in Sudan
• Finance the research on AIDS vaccine for both
  adults and children

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Expected impact

• Increase life expectancy of infected people
• Improve the quality of life by transforming a
  mortal disease in a manageable chronic illness
• Alleviate the economic impact of HIV/AIDS in
  Sub-Saharan Africa

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Analysis structure
Balance Sheet and Income statement
analysis Financial CBA
Sigma Tau
Sudan Government
Economic CBA
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Social and Economic Framework

• In the world there are 40 millions people living
  with HIV
• Africa accounts for 10 of the total world's
  population but the 83 of deaths caused by AIDS
  occurs in Africa
• Sub-Saharan Africa accounts for 28.1 people
  living with HIV/ADS.
• WHOs members have reached an agreement to allow
  LDCs countries to make use of compulsory licenses
  to import or produce in loco low cost generic
  drugs

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Market Analysis Demand

• Africa didnt experiment any reduction in the
  rate of prevalence of HIV/AIDS
• Between 1990 and 2000 the spread of epidemic has
  increased in the region
• At present in Africa the 99 of people living
  with HIV dont have access to ARV Therapy (ART)

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Potential demand
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Market Analysis Supply

• ART has become more affordable through
  international competition between producers of
  generic drug. (From 10.000 US per year to
  290US per year)
• So far there are not factories that produce ART
  in Sub-Saharan Africa

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Expenditures

• Investment costs
• Engineering costs
• Personnel costs
• Operating costs
• Row materials
• Personnel
• Distribution

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CBA and Balance sheet
Costs
Balance sheet Income Statement Financial ACB Economic ACB
Intangible assets Property Plant and Equipment Investment costs Investment costs Conversion Factors ( Shadow Prices)
Production Costs Raw materials Service Expenses Personnel Costs Other Accruals Operating costs Operating costs Conversion Factors ( Shadow Prices)
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Benefits
Benefits
Balance sheet Income Statement Financial ACB Economic ACB
Production value -Revenues from sales (adults) -Revenues from sales (pediatric) Others Revenues Revenues deriving by selling the drug on the market Value of life Economic Growth