Case review addressing receivables management

Complete Case 27: Commonwealth Pharmaceuticals

Case review addressing receivables management

Complete Case 27: Commonwealth Pharmaceuticals

Background

This case deals with receivables management of a pharmaceutical company 'Commonwealth Pharmaceuticals' established by Kathleen Grogan, a PhD in pharmacology from Boston University and an MBA. After her graduation, Kathleen went for working with Criser Corporation, a drug manufacturer. In this company she was able to develop a new anti-allergy drug which passed all the Food and Drug Administration trials. On the other hand, Criser instead of progressing with the drug Kathleen helped in developing, developed their own that was cheaper to produce and was effective in treating most of the symptoms that Kathleen's drug was able to treat. The refusal of Criser to proceed with Kathleen's drug and willingness for distribution rights to another company provided Kathleen a chance to quit the job and establish her own firm which she named Commonwealth Pharmaceuticals. The primary goal of the establishment of this company was the obtaining of the license, the production and distribution of the new drug that she had produced which named as 'SneezeRelief”

Business plan and receivable management

The establishment of the company required from Kathleen to develop a business and hence she is working on it that she intends to present at a venture capital conference in New York. The conference is primarily for matching entrepreneurs with venture capitalists who show interest in giving finances to new firms. Kathleen thought a lot with regard to the management of the receivables of the company she was proposing since she was aware of the problems that many companies like her had faced in terms of finances due to improper management of receivables.

According to the plan that she has developed, the proposed company of Kathleen plans to sell to directly and exclusively to 4 retail ...