new mba project
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TRANSCRIPT
A
Project report
On
Ratio Analysis for Treffer Pharmaceuticals”
Submitted To
RAJIV GANDHI COLLEGE OF MANAGEMENT
MBA PROGRAMME
(2009-2011)
Affiliated To
GUJARAT TECHNOLOGICAL UNIVERSITY
In Partial Fulfillment of the requirement for the degree of
MASTER OF BUSINESS ADMINISTRATION
Submitted by
MR.VIKESH R. KALSARIYA
(0974705922055)
MBA (2nd - SEMESTER)
RAJIV GANDHI COLLEGE OF MANAGEMENT
MBA Campus, Ahmedabad Highway, BALASINOR, Dist-KHEDA
PREFACE
“THE MAN WHO HAS NO IMAGINATION HAS NO WINGS”
Human being enters the world with a raw brain & mind. Until he works out with his imagination, he can’t reach the soaring heights of success. Study of management will be worthwhile only if it is coupled with the practical studies & imagination power.
Practical training which is a part of management studies intends to provide a student with sufficient knowledge to develop an equation to connect theory and practical aspects and thereby gives an opportunity to test and verify application of theory and comprehends interaction between management concept and practice.
As a partial fulfillment of the course M.B.A. (Master of Business Administration) the candidate is required to undertake a project that would help him to enhance his knowledge.
It is with great sincerity and enthusiasm that we take up the challenge that this field has placed before us and hope to succeed with guidance from our professors.
ACKNOWLEDGEMENT
Knowledge is one of the most important tools. However, practical application of knowledge is essential in each and every field of life. Only theoretical knowledge is not enough, but practical application is also necessary alongside the theoretical knowledge. Thus, this type of project work is valuable for a management student I am highly obliged to Mr.Atit .B. Patel, Director & Chief Manager of Finance Department, who gave me the guidance for the project report on “Working capital management Analysis “of Treffer pharmaceuticals,Navsari.Due to this project, I received a vital opportunity to study the practical implementation of theoretical knowledge
I am also thankful to Dr.Shabbier H.Joon, Director of Rajiv Gandhi college of Management, Balasinor, & Pro. Mr. Sarfaraz.N Pathan, my project guide, for giving me an excellent and invaluable guidance during the course.
DECLARATION
I hereby undersigned, declare that this project report Entitled is the result of my own Research work carried out after second semester & hasn’t been previously submitted to any other university/institution. For any other purpose.
I will not use this project report in future to use a submission to any other university or institution or any publisher without written permission of our guide.
I also promise not to allow any other person to copy any part of this report in any form. If I am found as defaulter of above declaration, we know that our present or future submission may become in valid oar I may not be permitted to appear in the college or institute wherever we are studying.
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Kalsariya Vikesh R.
INDEXSR NO.
CONTENTPAGE
NO.
1 TITLE PAGE
2 CERTIFICATE (Company)
3 CERTIFICATE (College)
4 PREFACE I
5 ACKNOWLEGEMENT II
6 DECLARATION III
7
GENERAL INFORMATION
Introduction History Highlights Organizational Structure Size of Organization Form of Organization
1
8
MARKETING DEPARTMENT
Introduction Department Structure
11
9
FINANCE DEPARTMENT
Introduction Financial Planning Capital Structure Cash Management Ration Analysis
14
10
PERSONNEL DEPARTMENT
Introduction Employee Remuneration Training and Development
27
11 PRODUCTION DEPARTMENT Introduction Production process
30
11
PURCHASE & STORE DEPARTMENT Introduction Organization chart Packning & labeling
12
EXECUTIVE SUMMARY OF THE WORKING CAPITAL & RATIO Introduction Types of working capital Interpretation of the working capital of pharmaceuticals industry Types Ratio Advantages & limitation of ratio
37
13
RESEARCH REPORT
Introduction Objectives of the Study Research Methodology Research Design Data Collection Sampling Design Sampling Steps Research Analysis Limitation of the Study Findings and Conclusion
53
14
ANNEXURE
Research Instrument Balance of the last year
60
15
BIBLIOGRAPHY 62
GENERAL INFORMATION ABOUT THE COMPANY
Introduction
Location Product profile
Organizational Structure
Size of Organization
Form of Organization
COMPANY’SPROFILE
INTRODUCTION
Treffer pharmaceuticals being a small scale industry does have clarity in dept i.e. there are certain Department are that does not exit separately but the function of this dept. is carried out systematically. Treffer pharmaceuticals are a part of partnerships that perform all the function
of the various dept in consultant and co ordination with each other.
COMPANY PROFILEHistory of Treffer pharmaceuticals
The saga of Treffer pharmaceuticals begin with an enterprising advent of Navsari. In the year 1982 the second pharmaceuticals units at Navsari in Gujarat state
To cherish the first generation of friendship venturing MR. Hiren bhai .M. Patel & Mr. Atit .B.Patel joined the business as production chemist.
It is a policy of Treffer pharmaceuticals to mfg quality leadership by delivering products with complete quality assurance and constant improvement technology progress and motive employee.
“Be satisfied right from the beginning we had gone for innovation and invested in R&D constant improvement in quality as well as new products and new markets.”
We are exporting our various products since the year 1991 to various overseas countries like Netherlands, Denmark, Holland .west Indies Zambia, Zimbabwe, Europe, U.K, Canada, Honduras, Kenya and South Africa through merchant exporter.
LOCATION OF THE COMPANY:
Treffer pharmaceuticalsC-23, Udhyognagar.Navsari -396445Gujarat (India).
Owner of the companyHead of finance: - Mr. Atitbhai .B.PatelHead of marketing: - Mr.Hirenbhai. M.patelHead of personnel:-Mr.Bipinbhai PatelHead of production:-Mrs. Prabhaben Mandviwala
Objective of the company:- To get maximum profit. Customer satisfaction. To provide best quality and quantity of product with less price
Turnover of the company approximately 3 crores annually
PRODUCT LINE:-
A PRODUCT IS anything which is offered to the market for use or consumption that might satisfies the need of a customer, This company produce two type of a product i.e. tablets
Allopathic products for both human and veterinary Arurvedic product for both human And veterinar
NUMBER OF PRODUCTS
Ferrous sulphate tablets Paracetamol tablets Ferrous gluconate Chloroquin phosphate
AYURVEDIC HUMAN TABLETS AND CAPSULES:-
Ziwec tablets Preddup tablets Licoxcid tablets Diobil tablets Trex tablets Sudarshan tablets
Veterinary products
Wormono forte Aloxy bolus Diclenrowin injection Enrowin ds bolus and injection Herbex
MAJOR CUSTOMER:- The major customer for Allopathic, Ayurvadics, Veterinary are:-
For Allopathic:-
Pharma chem. International ,Honduras U.S.A Holden Medicals Laboratories, Netherlands. Devats India pvt ltd , New Delhi. Flamingo pharmaceuticals ltd , Mumbai Apex drugs , Mumbai
For Veterinary:-
Ambala Sarabahai enterprise ltd .Ahemdabad Bovine bird pharma pvt ltd, pune Sarabahai Zyds animal health pvt ltd , Baroda Indo biocare ,Ahemdabad
For Ayurvedics:-
Ajit medical store Navsari Bhatiya ayurvedics Dhanvantry Aushad bhandar Bardoli Shantital ambalal Ahemedabad
ORGANISATIONAL STRUCTURE
Production
Departm
Marketing
Departm
QualityControl
Department
Administrative
Department
ProductionManager
MarketingManager
Office In charge
Analytical
Chemist
Assistant
Chemis
RegionalManager
SalesRepresentat
ive
AreaSales
Manag
StoreKeep
er
Owner
Personnel dept.:-
Treffer pharmaceuticals being a small scale mfg unit it does not have specific personnel dept, but all the function relating to personnel dept are carried out There are various employee development programmed and schemes such as training programmed, ESI scheme Gratuity and P.F. Production Department:- Treffer pharma is a mfg firm and as such the production dept of the firm is very well developed and Mrs. Prabhaben Mandvivala is the head of this dept. The firm mainly receives orders from various customer situated in mainly Gujarat and maharasharta , This firm is a leader in production of IRON tablets and is well known in India as well as world, The production dept is well known equipped with all the modern machines and facilities .
Dept. of manufacturing active For Allopathic dept.
Office Raw material store room Granulation room Tablets punching room Tablets coating room Quarantine room packing and labeling room Packing material store room Finished goods store room Records room Tools store room General capsulation room Quality control laboratory Retained sample room Research & Development
Marketing dept:-
MR. Hirenbhai .m. Patel is the heads of this dept, in this firm orders are received from customer and the production is carried on as per order. The locals markets are very less as such it does not recruit local medicals representative .The customer contact the firm directly or through the agent of terffer pharmaceuticals for placing their Oder.
Finance dept:-
Mr. Atitbhai patel is the of this dept. Treffer pharmaceuticals is a partnership firm headed by the sons of HUD families and therefore all the finance required by the firm for its mfg activities are produced either from the reserves and surplus of the firm or from financial intermediaries. There is no issue of shares or debentures and the profit of the company is divided equally in the three partners after the allocation of various funds and reserves. The firm maintains various books of accounts and the head of the department regularly checks these books. Purchase and Stores Department: In Treffer Pharmaceuticals the production manager and finance manger handle all the function of purchase and stores dept. jointly.
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Introduction
For any organization marketing department plays an impairment role. The word market brings us the full concept of marketing. TO make aware of the done through advertisement in newspaper, magazines T.V etc. In this company as it is medicine so marketing is done by appointing a person known as a medical representative and for veterinary a person is appointed know as field officer. In this the medical representative himself goes to the doctor medicine in their area and make understand the effect of tablets and the thing contains in it, in the Treffer pharmaceuticals for human allopathic they mostly receive Oder from the export house situated at Bombay.
Oder processing system:- Oder for the veterinary products can be received from the wholesaler, retailer doctors’ .hospital. Etc. Orders come to the company either through medicals representative or from the wholesaler directly.
Reporting system:- Reporting system is necessary in marketing system. Every person in the dept. should be answer to his superior so that his activities are in control of his superior. In this company the reporting system for marketing personnel is comprised of tour programmed statement. This stamen informs the management of the where about of the marketing personnel and provides a basis for comparing their pal and accomplishment. Statement of expenses:- Statement of expenses is to be submitted by all personnel marketing to management. Expenses like travel fare daily allowance. Miscellaneous. Exp.etc. these expenses paid by management on the monthly basis.
Collection of receivable:-
A collection policy is needed because all customers don’t pay the fiefs bill in time. Some customer is slow payers while some are non payers. The collection efforts should therefore aim at accelerating collection from sloe Payers collection efforts should ensure prompt and regular collection.
PRICING:- Pricing is the only element related to revenue in any organization so the company has to fix the price in such way that all cost is covered and can get the maximum profit The company gives cash discounts quality discount i.e. price reduction to buyer who buy large volumes functional discounts i.e. discounts offered to trade channel member .
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Introduction Organization structure Relationship with department Ratio analysis
Introduction Finance department play an important t role for every organization. At every stages of all the company. For effective utilization of the finance management is necessary. The work of this department is to acquire the money at low interest and make it double by the way of the earning profit and to make best utilization of it.
In Shorty, procurement of funds, their utilization and proper management is known as finance manger
ORGANAZATION CHART:-
Finance Director
INTRODUCTION Financing means providing capital requirement so that business can run smoothly & efficiently. For running the business finance is necessary. All the activities of business depend on the finance. Finance is the core part of any business organization. If the company has sufficient finance so they can take future plan also. In modern time more and more finance are needed for running the business because for producing the goods quickly different type of machineries are needed. Finance department perform the activities like financing new projects, acquiring funds for financing capital requirement, making new investment, purchase of new assets etc. depend on the finance. Without finance we can’t run our business smoothly & efficiently.
Financial management concern with three activities
1. Anticipating financial needs
2. Acquiring financial resources
General Manager
Finance Manager
Account assistant
3. Allocating fund in business.
The role and responsibility of financial management in the organization are as follows
financing the new project Posting them in ledger and recording the data in computers arranging for the required funds recording the transactions in journal and subsidiary books Preparing final accounts
Financial accounting includes trading account, profit & loss account, & balance sheet. Organization of finance differs from organization to organization depending on the requirement. Organization of finance department means designing job structure, developing component activities, defining responsibility, delegating authority, defining responsibility. There are two types of financial information first show the profit or loss of the business & other show the assets & liabilities of the organization.
RELATIONSHIP WITH OTHER DEPARTMETS:Finance is closely related with different types of department. The relationships of
finance with other department are as follows
RELATIONSHIP WITH ECONOMICS:
There are two important linkages between economics & finance. The macroeconomic environment defines the setting within which a firm operates and the micro economics theory provides the conceptual understanding for the tools of financial decision making. Key macro economic factors such as growth rate of economy, domestic saving rate, rate of the government in economic affairs, nature of the external economic relationship, availability of funds to corporate sector, rate of inflation, real rate of interest & team of which the firm can raise finance define the environment in which firm operates.
An understanding of macro economic development gives idea to the finance manager of opportunities and threats in the environment, a firm grounding and micro economic principles sharpens his analysis of decisions alternatives
RELATIONSHIP WITH MARKETING Marketing depend on the finance because in order to conduct the survey & to do various promotional activities finance is needed. Marketing provides estimate regarding the future income and expense of the business through their survey in the market. Marketing & finance are interdependent on each other. Marketing department has to maintain the necessary report for the expense and incomes and has to submit it to the
finance department. The finance department has to undertake effective cost benefit analysis.
RELATIONSHIP WITH ACCOUNTING: Finance and accounting are closely related. The primary objective of accounting
is to measure the performance of the firm, assess its financial condition and determine the base for tax payment. The principle goal of financial management is to create shareholder value by investing in positive net present value project. Financial decision making required considerable inputs from accounting. The financial management use accounting data either in row form or after certain adjustment & analysis input to the decision making process.
RELATIONSHIP WITH PRODUCTION: To produce the goods in desire manner finance is necessary. Various expenses are including for producing the goods & these expenses are salary to production staff, worker, and purchase of row material, etc. Finance plays one of the most important roles in producing the goods.
RELATIONSHIP WITH PERSONNEL DEPARTMENT:Personnel department is responsible for maintaining the efficient workforce in
the organization for which they have to pay reasonably to their workers. They have to provide various facilities to their staff, for incurring all the expense related to maintaining the staff it has to depend on finance. Finance department pays for the salaries of the staff, pays for all the facilities provided to the staff, all miscellaneous expenses, etc
SOURCE OF FUNDS: Source of funds are the institutions or firms which can provide the finance in order to meet the requirement of the firm. B-TEX consider the financial institutions and bank as the best source of finance.
COST CONTROL SYSTEM: Cost is one of the main factors affecting finance department. There are lots of control techniques through which companies can control their cost. Costing is the factor that affects the pricing as well as profits of the company. If the costs are controlled then the company can fix competitive price and achieve targeted returns. If the company is able to get the cost at minimum level then can get an additional benefit over their competitors. To control Cost Company might have to:
1. Replacement of worm out machines and equipments with new ones.2. Make or buy decision3. Extension of existing production plant.4. By having latest technology machines and equipment.5. By producing large quantities of products.
6. Controlling the inventory levels.7. To do investments where maximum returns can be achieve.
ACCOUNTING POLICIES: The accounting department maintains the record of all the type of account. There are two types of account yearly account & quarterly account. It checks its account and finally prepares the balance sheet. It compares the planned balance sheet & takes necessary action.
Bases of accounting:- The preparation of accounts is being done on the basis of historical cost concept
Investments Investments are valued at its acquiring cost. Investment is the funds that company invests in some other companies or financial institutions or financial institutions or financial instruments, etc.
Depreciation: The rate of depreciation is decided by the company. The rate is fixed by the company as per the rate specified in the schedule XIV of the companies act of 1956.All the fixed assets are valued by the depreciated at written down value method. The depreciation is provided on pro-data basis.
1. Up to the data of disposal as disposal of fixed assets during the year. 2. from the data of addition to addition to the fixed assets during the year.
Revenue: 1. Income of insurance claim is accounted as and when they are admitted. 2. Sales of goods are generally accounted on the basis of dispatch to customers and
executed the accounts recovered towards excise duty and sales tax.
InventorieThere are three type of inventories raw material, work in process, & finished
goods. There are policy and method to determine its value.
Fixed assets: Fixed price are stated at their cost price. Cost price comprises of the purchase price
of an assets and any related cost in bringing the asset to the work place. Financial cost related to deferred funds attributable to construction or acquisition of fixed asset is included in the cost of fixed asset to which they are related.
Contingent liabilities: Contingent liabilities are those liabilities that arise due to the uncertainty of the
business. In order to provide for such uncertainties some amount is kept aside. All the remaining liabilities are provided in the account expect the liabilities of contingent nature which have been adequately disclosed in the accounts.
ACCOUNTING SYSTEM: The company is maintaining computerized system for recording and observing their day to day transactions since it is easier and quicker as compared to the manual system of accounting, with the help of accounting it is possible to make forecast regarding the revenues, expenses in the future .Even the change can be introduced very easily and comparison of any record is possibly through the computerized system of accounting. Since computerized system of accounting is easier, less time consuming, and give quicker results it is preferred by the company
TREASURT OPERATION: Treasury operation has to be managed effectively & efficiently in order to pay various
type of cost; various contingent liabilities etc. It has to be maintained in such a way that it can meet various production, purchase, sales expenses. If it is maintained well, budgeting can be done accurately on the basis of forecast. Treasury operation is maintained to facilitate demand & supply conditions, timely payment for purchase, contingent liabilities like dispatching of goods on delivery dates, minimizing opportunity cost. Some unseen contingencies like flood, fire, earthquake etc may arrive for this also solutions are to be found out.
EVALUTION OF FINAL ACCOUNTS OF THE ORGANIZATION:- Trading account & profit & loss account are prepared by the finance department. There after balance sheet is prepared to know the position of the company & take corrective action. They prepare rules and regulations for the company on the basis of factory act & a quarterly review of final account is do
RATIO ANALYSIS
Ratio Analysis is the most popular technique of financial analysis indicating the relationship that exists between two variables & is expressed as a percentage or number. Another defines a ratio as a quotient obtained by dividing one variable by another. A financial analyst can use a ratio as a ratio as a bench mark to evaluate the financial position & performance of a firm. Comparison & interpretation of various ratios obtained from financial statements can help in having a better understanding of the financial position & performance of an enterprise. Therefore it is a more meaningful & effective tool of analysis.
Ratio analysis offers many benefits. It helps in establishing relationship between various financial items of financial statements. These ratios provide important information, which serves as a basis for decision-making.
An inventors in interested regarding the exact financial position of the business , its earning capacity and the present position with regards to profitability and future possibility of the company. He has only the published accounted of the company before him. This would enable him to take any decision with respect to investing his money. Them published accounts are, Profit &loss accounts, balance sheet, Directors reports and auditor reports and chairman speech. The directors report and chair man speech would assist him in foreseeing the future prospect of the company. Let us see at this classifying in our study of analysis of accounts.
Assumption of Ratio Analysis:-
Financial statement gives the current position of the business Company which is being its facts data are comparable with other company in
the field and also comparable with whole industry facts.
Importance of Ratio Analysis:
The Important of the Ratio Analysis can be stated as follows: 1. Liquid Position:
A firm can be said to have the ability to meet its short term liabilities if it has sufficient liquid funds to pay the interest on its short maturing debt usually within a year as well the principal. This ability is reflected in the liquidity ratios of a firm.
2. Long term Solvency: The long-term solvency is measured by the leverage/capital structure & profitability ratios, which focus on earning power & operating. 3. Operating activity Ratio Analysis throws light on the degree of efficiency in the management & utilization of its assets. It would be recalled that the various activity ratios measure this kind of operational efficiency.
4. Overall Profitability: The management is constantly concerned about the overall profitability of the enterprise. I.e. they are concerned about the ability of the firm to meet its short term as well as long-term obligations to its creditors, to ensure a reasonable return to its owners & square optimum utilization of the assets of the firm. This is possible if an integrated view is taken & all the ratios are considered together.
5. Trend Analysis: Ratio Analysis enables a firm to consider the time dimension. In other words, whether the financial position of. The firm is improving or deteriorating over the year. Trend analysis shows the direction of movement i.e. whether the movement is favorable or unfavorable.
Limitation of Ratio Analysis:-
Ratio is useful in so far as they give expression to study of the relative aspect of a problem because ratio is meaningless by itself and carries significations only when it is studding along with another ratio.
Ratio limitation of ratio analysis lies in illusionary aspect of various accounting data. In fact the data are usually estimate regards the life of aspect the proper rate of deprecating the assets, provision for doubtful dept, etc
TYPES OF RATIO To evaluate the financial condition & performance of a firm meaningfully, financial
analysis need to compute a number of financial ratios from the accounting date presented in the financial statement of the firm. There are different ratios are as follows. A. Liquidity Ratios B. Leverage Ratio C. Turnover Ratio D. Profitability Ratio
A. Liquidity Ratios:- As the name suggests liquidity ratios are used ·to evaluate the firm's ability to honor its short-term or current obligations & judge, the present cash solvency of the firm. This indicates the relationships between current assets i.e. the resources available with the firm to meet current obligations & current liabilities. Some important liquidity ratios are: a) Current Ratio b) Acid-test ratio c) Cash Ratio
B. Leverage Ratios:- The short-term creditors who are interested in the current financial position would use the liquidity ratios. The leverage or capital structure ratio may be defined as the financial ratio which throws light on the long- term solvency of a firm reflected in its ability to-
1) Periodic payment of interest during the periods of the loan & advances.2) Repayment of principal on maturity or in pre-determined Installments at due-date.
There are thus, two aspects of the long-term solvency of the firm. First ratio, which is based on the relationship between borrowed funds & owner's capital. These ratios are computed from the balance sheet & have many variations such as; 1. Debt-equity ratio2. Debt- assets ratio 3. Owner's ratio The second type of Capital structure ratio popularly called coverage ratios, are calculated from the Profit & loss account include the following. Interest coverage ratio, Dividend Coverage ratio, Total fixed changes coverage ratio, Cash flow Coverage ratio, Debt service coverage ratio.
C. Turnover Ratios:- Turnover ratios, also known as activity ratios, are based on relationships between turnover or level of activity & various assets, namely net assets, fixed assets, net working capital, inventories etc. Turnover means sales revenue or total sales receipts during a period, i.e. a firm's gross trading income for a period. Thus, turnover ratios are obtained by dividing sales by various assets. They indicates how efficiently various assets have been employed. So these ratios are also called "asset management ratios." Some important turnover ratios are:1) Inventory turnover Ratio 2) Debtors turnover Ratio 3) Average collection period 4) Creditors turnover Ratio 5) Fixed Assets Ratio 6) Total Assets Ratio
D. Profitability Ratios: - In order to evaluate the results of business operations we need to know the profitability of the firm. Profitability is essential not only for a firm's survival but for its growth also. Profitability relationship or ratios are generally of two type’s profitability. As related to sales (profit margin ratio) & profitability as related to investment (rate of return ratios). These ratios reflect the firm's operational efficient
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INTRODUCTION
PERSONNEL DEPARTMENT
INTRODUCTION:-
Any organization has to depend on its human resources. It has to recruit and train workers also create an acceptable envt. For its human resources to work in. also it should be able to it their maximum participate towards the achievement of org. goal
Personnel mgmt is now known H.R.M and can be define planning organization directing and controlling of the procurement, development compensation integration and maintained of people for the purpose of contributing to the organization personnel & societal goal.
There is a personnel dept in big firms, while in small firms the owners themselves carry out the personnel function. As Treffer pharmaceuticals is a small partnership firm so there is not any personnel dept. to carry on personnel function Labor relation:-
The main objective of personnel mgmt is to maintained harmonies working relation in the organization. The success and failure of every company is dependent on its labor mgmt relation activity, if the labor mgmt is good than only company can get success.
In this firm there is no trade union and this reflect the firm’s excellence in maintaining harmonious working relation. Treffer has created a friendly atmosphere so all its member feels at home and work as family members. There is exceptionally good relation bet. Workers, supervisor, chemist, manager, directors, etc. These good relations indicate sign of good work and increasing rate of profit.
Human Resource Department:-
“The wonders of wonders are man who has infinite capacity to think, to develop, to create, to invents, to love, to kill, to respect and to hate. To analyze or destroy. Because of these traits or qualities human beings are complex in their behavior and in their psychological makeup and when they interact with one another in a group as an organization.
Human resource mgmt is that part of management of people in their work organization. Human resources management is a primary source for gaining competitive advantages.
The company provides training programmers to workers teaching them about the new technology, their behavior in the firm, cleanliness etc. thus with the help of this the company has following activates for the development of its human resource:
Research and storage data. Man power scheduling Employee welfare Training education and development Compensation and reward
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PRODUCTION DEPARTMENT :- For any organization which is producing or manufacturing product, the production dept. is necessary. To maintains and promote the production function production mgmt. is essential. Production referred to a process of conversation of raw material into finish goods. Production process:- In the firm production of tablets in the particulars way in the following:-
Granulation Punching Coating Packing Labeling
In granulation there are 2 methods are available like:-(1) Wet granulation (2) Direct compression methods
Wet granulation method:-Raw material is taken according to the required of tablet for preparation. This mixture is sieved to remove any extraneous particles and is put in mass mixture machine. This whole granulation is kept in trays in the dryer where the mixture is dared with the help of hot air. Direct compression method:- This is another method of granulation process. In this method all active and n active ingredients are sieved together. All the active and inactive materials required are not sieved separately. In this company this method is used to manufacture one tablet. Punching compression process:- This process is undertaken to covert powder or granulation prepared sized weight shape and character of tablets. Than the parameter for the tablet to be punched are set
Weight of the tablet as required or specified in batch mfg. record Disintegration Hardness Thinness Weight variations of individual tablets the compression machine is run tablets are
prepared by giving pressure on performed between the processes at mention time interval.
Coating process.- In this company only sugar coating method is used for the coating process.
In sugar coating method, is done through pan pour system through this system 50% of tablets weight is achieved first gelatin syrup is pour on tablets bad in pan. Than pan is rotate for sometimes. This process is repeated for 4 coats each of 30 minutes. After allowing tablets to dry about 3 to 4 hrs. These tablets are put in polishing pan for polishing tablets. Packing process:- Packing is most important and need very attention to protect the product from dust, humidity etc. so the Treffer pharmaceuticals following process for packing they use 3 type of packing
Bulk packing Strip packing Blister packing (1) Bulk packing:- pack size 100 tablets 1000 tablets. In the bulk packing ,
tablets and capsule are packed in either glass or plastic container or in bag or aluminum sachet.
(2) Strip packing :-Pack size 100 tablets 1000 tablets. A) Aluminum) classiness. Poly paper glassine ploys paper foil.Allopathic human and veterinary.
(3) Blister packing :-Pack size10, 20 capsulesMaterial used for blister packing is
PVC coated PVS foil
(4) Labeling:- The labeling is important for any product because it indentifies the brands. it can give the customer the information to know about the product, name .its manufacturing date when is it made when it’s expired date. The label of products of Treffer pharmaceuticals
Name of product Compression of product induction Dosage induction Manufacturing licenses number Manufacturing date and expire date Batch no
Name of manufacture Stronger induction
Quality control department:- Quality control dept has some objective:
To assure quality of raw material finished goods To suggest suitable method measure without increase in cost If quickly deviates measure are taken Product conforms to predetermine stand. To make dept. have quality conscious
As it is pharmaceutical company of product is very important. In this company there two method s are used is as follows:
Acceptance Sampling Process control method
In this first method sample are taken from a lot and sample are tasted. In second method during conversation process they are tested and if approved they are realized for subsequent next stage. When the raw material is arrived samples are tested by the Q.C chemist in the Q.C laborite. Without approved of the Q.C dept. the material can’t be used.
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ORGANIZATION CHART:-
GENERAL MANAGER
Q.C Manager Prod. Manager Packing in Charge
Q.C ChemistProd. Chemist
Supervisor
Worker
Supervisor
Worker
Oder lead time:-Lead time is total time necessary to replenish stock of item and it can be divided into parts viz, internal & external lead time. Internal; lead time consist of receiving time which includes time required for obtains quotations, negation price entering into contacts etc. Processing of paper material:- The success of the whole study depends to a large extant on the effective and accuracy of the records, which should be clear , conscious and complete. In the Treffer pharmaceuticals. Documents are design stage wise received and material properly. Batch processing records and as per noted in daily reports stage wise. All activities performed in production process are noted in daily reports stages wise with start time &completion time.
HANDILING OF REJECTION:-
RAW MATERIALQ.C testing of materialIf material rejectedStored in rejection roomRestricted to Authorized personInformation to Supplier
INTRODUCTION TO THE WORKING CAPITAL.
CONCEPT OF WORKING CAPITAL:-
There are two concept of working capital Gross working capital Net working capital
GROSS WORKING CAPITAL:-
It’s simply called as working capital refers to the firm’s investment tin current asset which can be converted in to cash within an accounting year and include cash, short term, securities debtors, and bills reciable and stock
NET WORKING CAPITAL:-
It refers to differences between current asset and current liabilities. Net working capital can be positive or negative. A positive net working capital will arise when current asset exceed current liabilities. A Negative net working capital occurs when current liabilities are in excess of current asset.
In summary of it may be emphasis that both gross and net concept working capital are equaled important for efficient management of working capital.
The Effects of excessive working capital are as follows:- It result is unnecessary accumulation of inventories. It is an indication of defective credit policy and slack collection period
consequent higher indication of bed results which adversely affects profits Excessive working makes management completeness which degenerates in ton
managerial efficiencyIn adequate working capital is also bad has the following effects:-
It stagnates growth. It becomes difficult for the firm to undertake profitable projects for noon availability of working capital.
It becomes difficult to implement operating plan and achievers the firms profit target
Operating influencers creeps in when it becomes difficult even to meet day to day commits
Fixed assets are not efficiently utilization for the lack of working capital funds thus the firms profitably would deteriorate.
Concept of operating cycle:-
There is always an operating cycle involved in conversation of sales into cash. There is a different between current and fixed assets i9n terms of their liquidity. Affirm require many years to recover the initial investment in fixed assets such as plant and machinery or land and buildings.
Operating cycle is the time duration required to convert sales after the conversation of resources into inventories into cash. The title of operating cycle is more expensiveness in the senses That the normal business of a manufacturing and trading and manufacturing company starts with cash, for though the successiveness segments of the operating cycle is raw material WIP finished goods period and collection from debtors before getting cash along with through Profits
Operating of Treffer pharmaceuticals ltd.:-
Conversation of cash into raw- material Conversation of raw material into work in progress Conversation of working in progress Conversation of finished goods into sales Conversation of debtors into cash
MEASURING WORKING CAPITAL REQURIEMENT:- Operating cycle concept penetrates to the understanding of the working capital management in a more dynamic form. The aim of such is not only to direct towards management of working capital and its fund inflow and outflows but also directed to refine the balancing judgments between liquidity and profitability. In financial planning understating of the operating cycle approach is very essential this means the current liabilities but also as source of increasing profitability and these by maximize the return on capital employed.
The inventory conversation period is the total time needed for planning and selling the product typically it includes:
Rae material conversation period Work in progress conversation Finished goods conversation Debtors conversation period Creditors conversation period
CHANGES IN WORKING CAPITAL
INTRODUCTION:There are two types of capital needed1. Fixed Capital2. Working Capital
Fixed capital is the amount which is invested in things such as buildings, plant & equipment while working capital is the amount principally to pay for stock and cover the amount of credit extended to customers.
Each & every company requires some of capital to run its day to day activities. Only capital investment in firm will not make it to work. For that the firm requires some of investment in current assets & current liabilities. This is known as “Working Capital”.
More or less investment in the working capital will be harmful to the firm & will affect to the profitability of the firm. This is the reason why each & every firm pays more attention to the management of working capital.
Working capital management is management for the short-term. Short-term management should not be discounted. As the old saying goes, “if you can make it in the short-term long enough you don’t need to worry about the long-term”.
STATEMENT OF CHANGES IN WORKING CAPITAL OF YEAR 2007-08:Particular 2006-07 2007-08 Increase in
working capital
Decrease in working capital
Current AssetsInventory 3751965 4569613 817648Debtors 7779981 8264969 484988Cash & Bank 0305909 0725081 419172Loans & Advances
0275363 0450791 175428
Other Current Assets
0353360 0722618 369258
Total Current Assets
12466578 14733072 -
Current Liabilities
6278707 6519592 - 240885
Creditors - - -Provision - - -
Total Current Liabilities
6278707 6519592 -
Net working Capital
6187871 8213480 -
Changes in Working Capital
2025609 - - 2025609
Total 8213480 8213480 2266494 2266494
STATEMENT OF CHANGES IN WORKING CAPIAL OF A YEAR 2008-09Particular 2007-08 2008-09 Increase in
working capital
Decrease in working capital
Current AssetsInventory 4041600 9324493 5282893Debtors 10963920 9214892Cash & Bank 1754112 2030304 276192Loans & Advances
494447 833549 339102
Other Current Assets
- -
Total Current Assets
17254079 21403238
Current Liabilities
Creditors 5481042 7448047Provision 326121 326121 6410
Total Current Liabilities
7774168 7774168
Net working Capital
11440506 13629070
Changes in Working Capital
2188564 - 2188564
Total 13629070 13629070 5904597 5904597
CONCLUSION:- By analyzing the data of the firm regarding in working capital we find as follows.In the year 2006-07, 2007-08the working capital is increased by 2025609.In the 2007-08, 2008-09 the working capital is decreased by2188564.It shows fluctuation changes in below
YEAR CHANGES IN WORKING CAPITAL2005-06 2025609 Increased2006-07 2188564 decreased
Statement of cost of sales:-
Particular 2005-06 2006-07 2007-08Opening stock of raw material 2011294 3205763 2846035+purchase 15720078 2305721 15880343-closing stock of raw material 2575569 2846034 4607330
Raw material consumed 15155803 23395450 14119048
+Manufacture exp. 2428941 45749958 2897343+depreciation 605760 1512211 1485412+operating exp. 1899095 2952309 3011797
Administration exp 1986580 4445708 1743372
Prime cost 22076179 37057436 232557154
+ opening stock of WIP 0 199000 192296-Closing stock of WIP 0 192296 1164378
Cost of production 22076179 37064140 22285072
+ Opening stock of finished goods
1127329 603845 975136
-Closing stock of finished goods
1659049 975136 3503715
Cost of goods sold 21544459 36692849 19756493
CONVERSATION PERIOD OF OPERATING CYCLE:-
Raw material conversation period: Raw material conversation period: - Raw Material inventory--------------------------------- ×300Raw Material consumption
YEAR RAW MATERIAL INVENTORY
RAW MANTERIAL CONSUMED
RAW MAT.CONSERVATION PERIOD
2006-07 1467302 10490236 422007-08 1338380 23395450 172008-09 1582297 14119048 34
2006-07 2007-08 2007-080
20
40
60
80
100
120
Series1
Conclusion: - From the Above table we can easily identify that there is fluctuation from 2006 to 2009. Shorter raw material period it again highly decreases by the 42 to 34.
Work in process conversation period:-
Work in process inventory------------------------------------ ×300Cost of production
Year WIPInventory
Cost of production WIP conversation period
2006-07 199000 16701636 42007-08 192296 37064140 22008-09 1164378 22285072 16
2006-07 2007-08 2007-080
20
40
60
80
100
120
Series1
Conclusion: - from the calculation of turnover and storage period finished goods inventory shows marginal fluctuation. In the year 2006-07 to 2007-09 is goes on the increase bases. And in the previous it highly increases to 59 days so the blocking up funds in finished goods.
Debtor’s conversation period: - Debtors/Credit purchase×300
Year Debtors Credit sales Debtors conversation period
2006-07 6789199 1976692 1032007-08 10963920 42733578 772008-09 23771857 23771857 116
2006-07 2007-08 2007-080
20
40
60
80
100
120
Series1
Conclusion: - The investment in sundry debtors has change a lot in this 3 year. In the company the debtors period it continuous fluctuation. On the decrease bases.
Creditor’s conversation period: - Creditors/ credit purchase ×300
Year Creditors Creditors purchase Creditor’s conversation. period
2006-07 4890883 1489374 982007-08 5481042 29135268 562008-09 7448047 31134062 72
2006-07 2007-08 2007-080
20
40
60
80
100
120
Series1
Conclusion: - As it shown that creditor’s payment period is so long I t is concluded that the company credit position in market is fluctuating in the decreases bases so. It’s continuous from 2006-07 to 2008-09.
RATIO ANALYSIS
CURRENT RATIO:-
CURRENT ASSETS/CURRENT LIABLITIES
YEAR CURRENTASSETS CURRENT LIBALITIES
2006-07 12290679 50073312007-08 17254079 58135732008-09 21403238 5813573
CURRENT RATIO:-
Year Current Ratio
2006-07 2.46:12007-08 2.97:12008-09 2.75:1
2006-07 2007-08 2008-090
0.05
0.1
0.15
0.2
0.25
0.3
0.35
Series1
Conclusion:-Current ratio indicates the working capital position. Normally, This Ratio should be 2:1. Treffer pharma. Current ratio is going to be increase position .the company ratio is higher than the ideal proportion of ratio. Due to high proportion, but its capacity to pay current liabilities maturity will be work.
4. ACID TEST RATIO:-
ACID TEST RATIO:=Quick assets/ current liability
Year Quick assets Current liabilities
2006-07 7949417 50073312007-08 13212479 58135722008-09 12078745 7774168
Year Acid test ratio
2006-07 1.59:12007-08 2.27:12008-09 1.55:1
2006-07 2007-08 2008-090
0.05
0.1
0.15
0.2
0.25
0.3
0.35
Series1
Conclusion: - It is calculated by dividing the value of quick assets by liquid liabilities’. The ratio is normally this ratio should be 1:1 however it is a reasonable satisfaction ration in the ratio year 2006-2006 to 2009 is to be fluctuated so the company position is to be very dull.
3 .Cash ratio:-
Cash ratio + current investment ---------------------------------------------- Current liabilities
Year Cash & bank bal. Current liabilities
2006-07 7949417 50073312007-08 1754112 58135732008-09 2030304 7774168
Year Cash Ratio
2006-07 0.10:12007-08 0.30:12008-09 0.26:1
2006-07 2007-08 2008-090
0.05
0.1
0.15
0.2
0.25
0.3
0.35
Series1
Conclusion:
If the current assets are equal to or more than current liabilities, the condition of cash ratio is satisfactory. In the year 2006-07 it shows .0.1:1 and in the last year that is 2008-09 is to be 0.26:1 is going on the fluctuated bases so it very dull position of the company.
GROSS PROFIT RATIO:- GROSS PROFIT:-
GROSS PROFIT /SALES×100
YEAR GROSS PROFIT NET SALES
2006-07 2030087 197869272007-08 6040729 427335782008-09 6015364 23771857
YEAR GROSS PROFIT
2006-07 10.26%2007-08 14.14%2008-09 25.30%
2006-07 2007-08 2008-090.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
Series1
Conclusion:-The above chart shows that company; s gross profit ratio in 2006-07 to 2008-09 is showing that increase situations so that the company’s position is to be very high. NET PROFIT RATIO
NET PROFIT:-=NET PROFIT ------------------×100 SALES
YEAR NET PROFIT NET SALES 2006-07 246879 19786957
2007-08 1714366 427335782008-09 400064 23771857
Year Net profit ratio
2006-07 1.25%2007-08 4.01%2008-09 1.68%
2006-07 207-08 2008-090.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
Series1Series2
Conclusion:-The above chart shows that company’s net profit in the year 2006 to 2009 is showing on fluctuated bases so that the company’s position is very down. It indicates that Firm’s profitability is not up to satisfactory level.
RESEARCH ON THE WORKING CXAPITAL OF THE PHARMACEUCTICALS
INTRODUCTION ABOUT THE RESEARCH METHODOLOGY
As traditionally defined, modern research work has been concerned with gathering data that can help us answer question about various aspects industrial economy, trade and commerce and this can enable as to understand present problem. Research in common parlance reference to a search for knowledge. One can also define research as a scientific and systematic search for pertinent information on a specific topic.
OBJECTIVES OF THE RESERCH STUDIES:
Research also help in the find out the main aspect of the studies It also help in the detail studies so that we can easily analysis, Research studies it also solve the complex problem which related to any of the studies
of any sector analysis. Research is also help to student and many scientist to find the new technology for the
new innovation
For each specific objective you must have a method to attempt to achieve it. The development of a realistic time schedule may help to prioritize your objectives and help to minimize wasted time and effort.
LIMITATION OF THE RESERCH STUDIES:
It required more time to analysis. Because it required high cost It also sometimes provides more confusable studies. In the field of research work education it s very hard to find out each and every
movement of the particular study
DATA COLLECTION
THERE ARE TWO METHODS OF DATA COLLECTION FROM WHICH WE CAN COLLECT FOR THE RESERCH PURPOSE:
1. PRIMARY DATA COLLECTION 2. SECONDARY DAT COLLECTION
1. Primary data collection :- There are no primary data
2. Secondary data collection:-
Secondary data means data that are already available that they refer to the data which have already been collected and analysis by someone else. Secondary data may either be published data or unpublished data usually secondary data is divided into.
In above the project the data collected for the secondary data sources is to be collected from the magazine and other business magazines.
SAMPLING:
Sampling may be defined as the selection of some part of an aggregate or totality of the basis of which a judgment of inferences about or totality is made. In another word it is the process of obtaining information about an entire population by examine only part of it.
In this project the various sample are collected from the company’s financial data of the last 3 years
Sample of the B TEX AND TREFFER PHARMA COMPANIES On the ratio if the newt profit
YEAR NET PROFIT OF B-TEX PHARMA.
NET PROFIT OF TREFFER PHARMACEUCTICALS
NE PROFIT ANANLYSIS (%)
2006-072007-082008-09
Sampling design: A sample design is a defined plan for obtaining a sample from a given population. It refers to the techniques or the procedure the research would adopt in selecting items from the sample. In above the report There are so various design methods.
Sample universe: The first step in developing any sample design is to be clearly defining the set of objectives, technically called the universe to be studies. Universe for the research conducted a comparison between the two Pharmacy sectors. Sample unit: A decision has to be taken concerning a sampling unit before selecting sample. In this above report the sample unit is selected from the pharmacy sectors.E.g. a required a working capital
Year B -tex Treffer Analysis
2006-07 2000000 15000000 1.33%2007-08 1500000 10000000 1.50%2008-09 1000000 5000000 0.20%
Sample size: These refer to the number of items to be selected from the universe to constitute a sample. The size of sample should neither be excessively large nor too small, should it be important. Sample size in this report it should be comparison between the two pharmacy sectors. In this report the sample size is as based on the two companies data regarding the working capital required.
Year Net profit Gross profit Treffer and B-tex Analysis
2007-08 4.01% 5.01% 00.5%2008-09 1.08% 2.68% 0.108%
Sampling steps:- Sampling collected
Sampling analysis
Sampling selected
Use for the research
Research analysis:-
From the above project report we conclude the main aspect of that find out the solution from the particular data of the two pharmaceuticals’ industries. So that from the research aspect the main analysis also biases on the one particular strategy. Research analysis from the two companies so that the it can help in the find out market share. Its position in the competitive markets to the company.
Findings:-From the above findings or conclusion that Treffer is earning market share from the it’s business as compare from the B-tax pharmaceuticals .so that the company position of the treffer is doing its business it’s very good and so it can running its business successful in the nearest future.
OBJECTIVES OF THE STUDY: The main objectives for this report are that to find out the compararision of the
pharmaceuticals industry. Research studies also help in the to find out the best way of the solution. The preparation of this type of research report it also help in the increasing the
practical as well theoretical knowledge.
LIMITATION OF THE STYDY: In this report the main limitation of this report is that is very time consuming and it
require more data to analysis. Research report prepare on the bases of secondary data
Sampling instrument There is no any instrument to use for this report
Conclusion: It was a pleasurable experience to undergo summer training in pharmaceuticals. The atmosphere polite and very helpful. During my project work I have studied the business overview of the company and I feel that the firm should enter into domestics markets directly for its three product line. This will help increase their markets share. Finally I would like to conclude that the study of procedural aspect and formalities of the firm practically through project work in a reputed firm has proved very helpful to me. It was a wonderful opportunity to mould my practical knowledge.
At last wish a bright success to the company.
ANNEXURE M/s TREFFER PHARMACEUCTICALS C-23 Udhyog nagar, Navsari-396445 BALANCE SHEET AS ON 31STMARCH 2009
Previous year (RS)
Capital and liabilities Current year.(RS)
10601509.29 Partner’s capital accounts 11617159.259335022.01 Reserved & surplus funds 10385378.48
loan fund2056548.00 (A) Secured loan –BOB 1314634.26
(B)Bank of Baroda
7991349.39 (C) Unsecured Loan 9181335.39
Current liabilities-Sundry creditors 9567355.73-Provision 354232.65
38869703.00 Total 43586556.98
Previous year (RS)
ASSETS Current year.(RS)
17466464.63 Fixed Assets 18279419.97
Current Assets,Loan&Advances9324492.65 -Inventory 10462341.309214891.89 -Sundry debtors 10246774.442030304.45 -Cash &bank Balance 2836842.27833549.38 -loan , Advances & Deposit 1761179.00
38869703.00 TOTAL 1761179.00
BIBLIOGRAPHY
BOOKS: Donald R. Cooper Pamela S Schindler business research methods 8th edition 2004.
Phillip Kotler Marketing Management 12th edition 2004
K.Ashwathppa for production and operation management.
I M Pandey for financial management 9th edition
BROCHURES: Treffer Pharmaceuticals
Last 3 years of data of the Treffer pharmaceuticals.