From Balance sheet to economic analysis Dott.ssa Notaro Dott.ssa Stefanoni

What we are going to study Balance sheet analysis and Income Statement analysis Financial CBA Economic CBA

Producing ARV in Sub-Saharan Africa The project aims to increase the offer of Antiretroviral drugs in Sub-Saharan Africa by reducing the price of Antiretroviral therapy Project stakeholders – Private sectorSigma Tau – GovernmentSudan Government Project Objective

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

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

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

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. WHO’s 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

Market Analysis: Demand Africa didn’t 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 don’t have access to ARV Therapy (ART)

Potential demand

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

Expenditures Investment costs – Engineering costs – Personnel costs Operating costs – Row materials – Personnel – Distribution

CBA and Balance sheet Costs Balance sheetIncome StatementFinancial ACBEconomic 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 costsOperating costs * Conversion Factors (= Shadow Prices)

Benefits Balance sheetIncome StatementFinancial ACBEconomic 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 Benefits