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  • January 2021
  • Supplement
  • HBS Case Collection

Aster DM Healthcare: Budget Exercise

By: V.G. Narayanan and Amy Klopfenstein
  • Format:Electronic
  • | Language:English
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Abstract

In April 2020, Alisha Moopen, Deputy Managing Director of Aster DM Healthcare, a network of clinics, hospitals, and pharmacies in the Middle East and India, must create her company’s budget for the 2021 fiscal year in light of the onset of Covid-19. The pandemic had forced Aster to indefinitely cancel elective procedures, which represented 70% of the company’s revenue. Meanwhile, materials costs increased as the Aster team had to procure enough personal protective equipment (PPE) to keep frontline staff safe from the virus, even as revenue from clinics and pharmacies declined. To offset the impact of the pandemic, Alisha and her team must decide whether to implement austerity measures, such as temporary salary decreases, whether to request temporary rent reductions from their landlords, and whether to renegotiate their debt covenants with their lenders. They must also decide what assumptions they can make about revenue: when elective procedures will resume, whether their new telehealth practice will gain traction, and when clinic and pharmacy revenue will recover.

Keywords

Decision Making; Decisions; Forecasting and Prediction; Judgments; Decision Choices and Conditions; Cost vs Benefits; Finance; Borrowing and Debt; Financial Institutions; Banks and Banking; Financial Condition; Financial Liquidity; Accounting; Budgets and Budgeting; Management; Crisis Management; Health Pandemics; Health Industry; Asia; India; United Arab Emirates; Dubai

Citation

Narayanan, V.G., and Amy Klopfenstein. "Aster DM Healthcare: Budget Exercise." Harvard Business School Spreadsheet Supplement 121-025, January 2021.
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About The Author

V.G. Narayanan

Accounting and Management
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