Radhakrishnan FINAL REPORT[1]

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    A study on heads of expenses and measures of Cost

    analysis for financial performance at Apollo Pharmacy.

    PROJECT REPORT

    Submitted to the ICFAI University, Tripura in partial

    Fulfillment of the requirements of the award of the Degree of

    Master of Business Administration

    Project Trainee

    R.RADHAKRISHNAN

    (Enrollment No: 08PMP0114914)

    Under The Guidance Of

    Mrs.P.R.BRINDA KALYANI. M.COM, (PH.D)

    (Faculty, Cygmax Institute of Management Studies, Madurai)

    Institute of Management Studies,

    No 78Ramalinga Towers, TPK Road,

    Andalpuram, Vasanth Nagar.

    Madurai

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    June 2009

    It is certified that the Project entitled A study on heads of expenses and measures

    of Cost analysis for financial performance at Apollo pharmacy. is a record of project

    work done by the candidate during the period of study under me and that the Project has

    not formed the basis for the award of any degree, diploma, associate ship, fellowship or

    other similar title to the candidate and that the Project represents independent work on the

    part of the candidate.

    Signature of the Faculty Guide,

    Mrs.P.R.BRINDA KALYANI. M.COM, (PH.D),

    Faculty, Cygmax Institute of Management Studies,

    Madurai.

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    R.RADHAKRISHNAN,

    08PMP0114914,

    Cygmax Institute of Management Studies,

    Madurai.

    STATEMENT BY THE CANDIDATE

    I hereby declare that the Project titled A study on heads of expenses and measures of

    Cost analysis for financial performance at Apollo pharmacy. for the award of Master

    of Business Administration is my original work done under the guidance and Supervision

    of Mrs.P.R.BRINDA KALYANI. M.COM, (PH.D), Faculty, Cygmax Institute of

    Management Studies, Madurai and the study have not previously formed the basis for

    the award of any degree, diploma, associate ship, fellowship or other similar title of any

    University or Institution. .

    (R.RADHAKRISHNAN)

    Place:

    Date:

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    ACKNOWLEDGEMENTS

    I wish to record my cordial and sincere thanks and unfathomable gratitude to

    S.Nagarajan, B.com. Apollo Pharmacy Division, for his scholarly guidance and

    inspiration. He was deeply involved in the project right from the formulation of the

    problem till its completion. I have benefited tremendously from my discussions with him

    throughout this research work. The shape of the Project owes a lot to his useful

    suggestions and critical and constructive comments.

    I express my thanks to Mr ORS Rao, Director, Cygmax Institute of Management

    Studies, Head Office Hyderabad for allowing us to carry out our project in this

    wonderful organization.

    I express my thanks to Mrs Brinda Kalyani.P.R Principal Cygmax Institute of

    Management Studies, Head Office Hyderabad for guiding us give the detailed SIP

    Curriculum in my project.

    I owe my debt to Mrs. Brinda Kalyani.P.R, Faculty Guide, CIMS, MDU. She has

    guided and encouraged for the novel avenues of research in my project.

    I extend my sincere and whole hearted thanks to Senior Manager,Mrs.Geetha and

    Manager, Mrs.Rajvee at Apollo Pharmacy Division, Chennai.

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    LIST OF CONTENTS

    Page No.

    Certificate to accompany the project I

    Statement by the candidateII

    AcknowledgementsIII

    CHAPTER I 1

    1.1. Introduction 2

    1.2. Statement of problem 3

    1.3. Relevance of the project to MBA 3

    1.4. About the project 4

    1.5. Need for the study 5

    1.6. Scope of the study 6

    1.7. Objective of the study 6-7

    1.8. Period of study 7

    1.9. Research methodology 7

    1.10. Sampling design 7

    1.11. Data processing 7

    1.12. Statistical tools 8

    1.13. Limitations of the study 8

    1.14. Chapter scheme 8

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    CHAPTER II 9

    2.1.Company profile 10-12

    2.1.1. Group Operational Highlights 12-14

    2.2. About the company 14-21

    CHAPTER III 22

    3.1. About the Concept 23-26

    CHAPTER IV 27

    4.1. Data collection & Data analysis 28-59

    CHAPTER V 60

    5.1.Findings 61-62

    5.2. Suggestions 62-63

    5.3. Conclusion 64

    Bibliography 65

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    LIST OF TABLES

    TABLE NO TITLE PAGE NO

    I TOTAL APOLLO PHARMACIES 16

    II CATEGORY WISE APOLLO PHARMACIES 17

    II INCOME AND EXPENDITURE STATEMENT OF

    APOLLO PHARMACY AT AIRPORT

    FOR THE YEAR ENDED

    29

    IV INCOME AND EXPENDITURE STATEMENT OFAPOLLO PHARMACY AT ASHOK NAGAR FORTHE YEAR ENDED

    30

    V INCOME AND EXPENDITURE STATEMENT OF

    APOLLO PHARMACY AT KILPAUK

    FOR THE YEAR ENDED

    31

    VI INCOME AND EXPENDITURE STATEMENT OF

    APOLLO PHARMACY AT NUNGAMBAKKAMFOR THE YEAR ENDED

    32

    VII INCOME AND EXPENDITURE STATEMENT OF

    APOLLO PHARMACY AT SASTRI NAGARFOR THE YEAR ENDED

    33

    VIII DATA COLLECTION FROM 5 APOLLO

    PHARMACIES TO DO GROSS PROFIT

    ANALYSIS

    34

    IX GROSS PROFIT OF APOLLO PHARMACY ATAIRPORT

    36

    X GROSS PROFIT OF APOLLO PHARMACY ATASHOK NAGAR

    38

    XI GROSS PROFIT OF APOLLO PHARMACY AT

    KILPAUK

    40

    XII GROSS PROFIT OF APOLLO PHARMACY ATNUNGAMBAKKAM

    42

    XIII GROSS PROFIT OF APOLLO PHARMACY AT

    SASTRI NAGAR

    44

    XIV DATA COLLECTION FROM 5 APOLLO 45

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    PHARMACIES TO DO NET PROFIT ANALYSIS

    XV NET PROFIT OF APOLLO PHARMACY AT

    AIRPORT

    47

    XVI NET PROFIT OF APOLLO PHARMACY ATASHOK NAGAR 49

    XVII NET PROFIT OF APOLLO PHARMACY AT

    KILPAUK

    51

    XVIII NET PROFIT OF APOLLO PHARMACY AT

    NUNGAMBAKKAM

    53

    XIX NET PROFIT OF APOLLO PHARMACY AT

    SASTRI NAGAR

    55

    XX PURCHASES ON 2007-2008 56

    XXI PURCHASES ON 2008-2009 56

    LIST OF CHARTS

    Chart No TITLE PAGE NO.

    I Total Apollo Pharmacies 17

    II Category Wise Apollo Pharmacies 18

    III Gross Profit of Apollo Pharmacy at Airport 36

    IV Gross Profit of Apollo Pharmacy at Ashok Nagar 38

    V Gross Profit of Apollo Pharmacy at Kilpauk 40

    VI Gross Profit of Apollo Pharmacy at Nungambakkam 42

    VII Gross Profit of Apollo Pharmacy at Sastri Nagar 44

    VIII Net Profit of Apollo Pharmacy at Airport 47

    IX Net Profit of Apollo Pharmacy at Ashok Nagar 49

    X Net Profit of Apollo Pharmacy at Kilpauk 51

    XI Net Profit of Apollo Pharmacy at Nungambakkam 53

    XII Net Profit of Apollo Pharmacy at Sastri Nagar 55

    XIII Outside purchases of Apollo pharmacy at Airport 57

    XIV Outside purchases of Apollo pharmacy at Ashok Nagar 57

    XV Outside purchases of Apollo pharmacy at Kipauk 58

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    XVI Outside purchases of Apollo pharmacy at Nungambakkam 58

    XVII Outside purchases of Apollo pharmacy at Sastri Nagar 59

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    CHAPTER I

    DESIGN OF THE STUDY

    CHAPTER - I

    1.1. INTRODUCTION:

    The Pharmaceutical Industry rightly called the Life Line industry, processes

    goods which are vital for peopleswelfare. It is beyond doubt that the Progress achieved

    by Indian Pharmaceutical Industry (refers only to manufactures of Allopathic Medicines)

    has been spectacular since independence. There were only a few drugs, which were

    manufactured in the country from the basic stage at the time of independence. Since then

    the industry has grown at a remarkable place and now it has acquired the capabilities to

    produce a wide range of pharmaceutical and intermediates for basic stage where it is

    termed as the largest and most modern industry among the developing countries.

    World War I and World War II formed significant landmarks in the history of

    Indian Pharmaceutical Industry, which is now nearly a century old.

    After independence, a number of foreign companies set up manufacturing units in

    India and today there are around 6000 large, medium and small companies, the

    competition among them being very severe.

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    1.2. STATEMENT OF PROBLEM

    Here they are maintaining Two Stores separately for Hospital based Pharmacies and

    Clinic, IOCL and Stand alone Pharmacies, and carrying Receipts and Issues in the daily

    manner to all the branches. But maximum of the branches are not get their demands fully

    at the time because of the closed system integration .The problems arising because of the

    system are:

    i. Unbalanced inventory at stores to the branches.

    ii.The transportation cost will be higher for daily issues.

    iii.The more outside purchase will reduce the profit even though the sale is more.

    iv.Year to year increase the no. of pharmacies that they have provided the

    expenses is more. But profit is not a more.

    1.3. RELEVANCE OF THE PROJECT TO MBA:

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    The analysis of the deviation between the companys actual and

    standard cost helps the management in decision making and controlling procedures by

    taking appropriate measures to rectify. The project also gives the knowledge of planning

    and making decision about materials required and the best process that is to be followed

    to produce a product at least cost with high quality.

    1.4. ABOUT THE PROJECT:

    This title was chosen because in todays competitive environment

    profit can be increased only by cutting down the cost of production and expenses. So it is

    very important to control the cost and reduce as much as possible. So, many companies

    are adopting budgeting and they use variance analysis to find the reason and cause for

    their deviation which will help them to reduce the cost in future and to keep a check in

    cost. So, the performance of the company also depends companys effectiveness in

    producing the product at good quality at low cost. So this project will help us to calculate

    the variance and to evaluate the reasons, so that it will help the company to take

    appropriate measure and control the cost incurred. So, that profit and performance

    increases. So, the project trainee has chosen the topic as A study on heads of expenses

    and measures of Cost analysis for financial performance at Apollo pharmacy. For

    this project trainee has applied the concept of cost control and Income and expenditure

    statements. The project trainee has collected the details about expenses of cost and their

    financial performance of the company.

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    1.5. NEED FOR THE STUDY:

    i. The financial statements are prepared under the historical cost convention under

    accrual method of accounting and as a going concern, in accordance with the

    Generally Accepted Accounting Principles (GAAP) prevalent in India and the

    mandatory accounting standards issued by the Institute of Charted Accountants of

    India (ICAI) and according to the provisions of the companies act, 1956.

    ii. It is the area maintains the financial statements. There are some costs involved,

    a. Operative costs

    b. Administrative costs

    c. Employee costs

    d. Financial costs

    iii. The company follows the cost system they have financial performance.

    iv. The increase the total cost of expenditure they have low financial performance.

    v. The decrease the total cost of expenditure they have high financial performance.

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    1.6. SCOPE OF THE STUDY:

    The scope of the study is as follows:

    i. Revenue and expenses have been identified to segments on the basis of

    their relationship to the operating activities of the segment. Revenue and

    expenses, which relate to the enterprise as a whole and are not allocable

    to segments on a reasonable basis, have been included under unallocable

    expenses.

    ii. Analyze the financial performance of the company going to good or

    better or bad.

    iii. Cost control is a saving function, which deals with the good financial

    performance of the company.

    1.7. OBJECTIVE OF THE STUDY:

    The objectives of the study are as follows:

    i. To analyze the administration cost in Apollo pharmacy.

    ii. To analyze the outside purchases cost.

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    iii. To analyze the four years Income and Expenditure statement in 5 Apollo

    pharmacy for the cost of expenses.

    iv. To give suggestion and to improve (reduce) the cost control system for the

    expenses in Apollo pharmacy.

    v. To analyze the four years Income and Expenditure statement in 5 Apollo

    pharmacy for the financial performance.

    vi. To give suggestion and to improve (increase) the financial performance in Apollo

    pharmacy.

    1.8. PERIOD OF STUDY:

    The project trainee has collected and studies the details about Income and

    Expenditure statements on 2005-2006, 2006-2007, 2007-2008 and 2008-2009. These four

    years data were analyzed for cost of expenses and financial performance. The trainee did

    the project from April end to June end comprising of 13 weeks in total.

    1.9. RESEARCH METHODOLOGY:

    The project trainee has used secondary data for this project. Secondary data

    are compiled from company reports, previous studies, management books and websites.

    The research process starts from the statement of problem, research design,

    objectives, conceptual framework, and tools of analysis and limitation of the study.

    1.10. SAMPLING DESIGN:

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    The project trainee has used the sample size of 5 Apollo pharmacies at

    Airport, Ashok Nagar, Kilpauk, Nungambakkam and Sastri Nagar of Chennai.

    1.11. DATA PROCESSING:

    The project trainee has used income and expenditure statements of Apollo

    pharmacies at Airport, Ashok Nagar, Kilpauk, Nungambakkam and Sastri Nagar of

    Chennai.

    1.12. STATISTICAL TOOLS:

    The project trainee has used the statistical tools like percentage and charts.

    1.13. LIMITATIONS OF THE STUDY:

    i. The data collected is entirely dependent on the accuracy of the details given by

    departments.

    ii. Time limit given for the study is too short.

    iii. Moreover the details regarding carrying cost and ordering cost are not available to

    the researcher from the company.

    1.14. CHAPTER SCHEME:

    This report consists of five chapters of which the first chapter includes the

    details of general information of pharmaceutical industry, Statement of the problem,

    Objectives, Scope of the study, Need of the study, period of the study, Research

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    Methodology, Sampling design, Data processing, Statistical tools and Limitations of the

    study. The Pharmaceutical Industry rightly called the Life Line industry,

    processes goods which are vital for peopleswelfare. It is beyond doubt that the Progress

    achieved by Indian Pharmaceutical Industry (refers only to manufactures of Allopathic

    Medicines) has been spectacular since independence. There were only a few drugs, which

    were manufactured in the country from the basic stage at the time of independence. Since

    then the industry has grown at a remarkable place and now it has acquired the capabilities

    to produce a wide range of pharmaceutical and intermediates for basic stage where it is

    termed as the largest and most modern industry among the developing countries.

    World War I and World War II formed significant landmarks in the history of

    Indian Pharmaceutical Industry, which is now nearly a century old.

    After independence, a number of foreign companies set up manufacturing units in

    India and today there are around 6000 large, medium and small companies, the

    competition among them being very severe.

    The second chapter explains the profile of Apollo Hospitals Enterprise

    Ltd, about the pharmacy and activities.

    The third chapter deals with the concept.

    The fourth chapter deals with data collection and data analysis.

    The fifth chapter deals with Findings, suggestions and conclusions.

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    CHAPTER - II

    COMPANY PROFILE

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    CHAPTER - II

    2.1. COMPANY PROFILE

    The Apollo Hospitals Group has been recognized as the Architect of Modern

    Healthcare in India.

    Since it was incorporated as a Public Limited Company in the year 1979,

    promoted by Dr. Prathap C. Reddy, Executive Chairman. Its resource management and

    able deployment of technology and knowledge in the service of mankind has brought

    Apollo Hospitals national and international recognition and acceptance. The Apollo

    Group of Hospitals is an integrated healthcare provider today.

    Some Salient Facts:

    i. Established of the first corporate hospital in Chennai (Madras) in 1983

    ii. The single largest private hospital group in Asia today

    iii. Several nations in the Asian subcontinent receive healthcare through

    its 35 hospitals and 6400 hospital beds

    The Government of India declared Apollo Hospitals, Chennai, as a "Center of

    Excellence"and the Indraprastha Apollo Hospitals, Delhi, is amongst the largest

    corporate hospitals in the region

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    Since it was set up in 1983 as the first corporate hospital in Chennai,

    Apollo Hospitals has marked important milestones in healthcare, and pioneered growth in

    several areas.

    i. Was the first to set up a health insurance administration company in India

    ii. Was the first provider to introduce preventive healthcare packages in India

    iii. Was the first to perform liver, multi-organ and cord blood transplants in

    India

    iv. Was the first Indian hospital to introduce newer techniques in coronary

    angioplasty, stereotactic radiotherapy and radio-surgery (for CNS tumors)

    v. It has the largest as well as one of the most sophisticated sleep laboratories

    in the world.

    vi. It has pioneered orthopedic procedures like total knee replacement and the

    Illizarov procedure in India

    Apollo in the Delivery of Clinical Care:

    Over 750,000 major surgeries and over 10, 00,000 minor surgical procedures have

    been performed till 2003 at Apollo. These procedures include cardio thoracic, neurology,

    and gastrointestinal, orthopaedic, renal, obstetric, ENT, opthalmology, dental, plastic,

    cosmetic and tumour surgeries. Apollo strives to use minimally invasive and micro-

    vascular techniques with success rates on par with international standards.

    i. Over 49,000 cardiac surgeries performed with a 98.5% success-rate

    ii. Over 130 successful bone marrow transplants

    iii. Over 9400 renal transplants

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    iv. Over 2,00,000 angiograms, 16,200 angioplasties (PTCA) and 3500 mitral

    balloon valvuloplasties performed

    v. Apollo performs over 35,000 opthalmic surgical procedures annually

    (Sankara Nethralaya, Apollo's partner, accounts for over 30,000 surgeries)

    vi. Over 4000 specialists and super-specialists and 3000 medical officers

    spanning 53 clinical departments of in-patient care, work at Apollo

    vii. An employee strength of over 15,000 highly motivated and dedicated

    professionals provides the highest quality of patient-focused service at

    Apollo. This includes over 2500 employees in various administrative

    What distinguishes the Apollo Hospitals Group is effective resource management

    and able deployment of technology and knowledge to the service of mankind.

    Mission began with the establishment of the first corporate hospital in Chennai in

    1983. Today we have Apollo Hospitals in several Indian cities, and have extended our

    reach to all regions of the country.

    2.1.1. GROUP OPERATIONAL HIGHLIGHTS

    Managed hospitals

    Managing over 1,900 beds at different centers.

    A five-fold increase is planned and being executed over the next 3 years.

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    Apollo Health and Lifestyle Clinics

    Theyhave opened franchisee neighborhood clinics to improve penetration and

    reach.

    30 clinics have been set up.

    Pharmacy operations

    Theyhave over 120 owned and franchisee outlets.

    Managed Care

    Our corporate health plans and packages help facilitate the employee healthcare

    needs of large private and public sector corporations.

    Family Health Plan

    They have the largest TPA in India.

    Our customer base will cross 20 million by 2010.

    Global Presence

    Today Apollo has a presence in Sri Lanka, Bangladesh, the UAE, Nepal, Ghana,

    Nigeria, the UK and the Kingdom of Saudi Arabia.

    Apollos capabilities have received international acclaim resulting in the replication of its

    Indian models at international locations.

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    The Apollo group is also in talks with private healthcare groups and government

    authorities in Nigeria, South Africa, Tanzania, Mauritius, Yemen, Muscat, Bahrain,

    Vietnam, Malaysia, Thailand and other neighboring countries to establish its presence

    2.2. ABOUT THE COMPANY:

    Apollo Pharmacy began operations in 1983 as a small facility to serve patients of

    the newly established corporate Apollo Hospital, Madras. Located within the premises of

    Apollo Hospitals, the Pharmacy, which conformed to international pharmaceutical

    service standards, was an immediate success, with turnover touch in Rs. 42 Lakhs in the

    year of inception.

    Apollo Hospitals (hereinafter referred to as "APOLLO") started the pharmacy

    operation two decades ago had grown into a mammoth chain of pharmacy stores of

    almost one hundred in India, most of them servicing 24 hours per day on all days, with

    delivery system.

    Today, Apollo Pharmacy has become the largest Chain of Pharmacies in India,

    with the current turnover of 170 crores in 2002-2003. The projection of 200 crores in the

    year 2003-2004. The name Apollo Pharmacy is synonymous with round-the-clock

    service, ready availability of all drugs, competitive prices and assured quality.

    Apollo Pharmacy deals with the entire spectrum of pharmaceuticals and drugs.

    Vaccines, Sera, Imported Medicines, Anti Toxins and Immunological Products. Besides

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    the Pharmacy also stocks surgical and life style products (Cosmetics, Health foods and

    herbal drugs).

    Headquartered in Chennai, Apollo Pharmacy has branches in Hyderabad, New

    Delhi, Mumbai, Coimbatore, Salem, Ambur, Trichy, Kancheepuram, Vellore, Bangalore,

    Mysore, Tirupathi, Vizag, Bhopal, Ahmadabad, Calcutta, Raichur and Aragonda and in

    the neighborhood country Srilanka. Apollo Pharmacies are all "walk-in" air-conditioned

    outlets, manned by qualified pharmacists with expertise in handling prescriptions and

    dispensing medicines. As the Pharmacy deals with the entire spectrum of drugs, being the

    largest chain of pharmacies in the India, the service is consistently of very high standard.

    The primary reason for the success of Apollo Pharmacy is the precision of operations and

    inventory control.

    Computerized stock and inventory control systems ensure control at every stage

    viz. stock receipt, inspection, stock issue and returns, invoicing, collection, accounting

    and settlement of suppliers on time. Everyday stocks are checked and updated on the

    inventory management system. The overall control is centralized.

    Qualified Pharmacists man the counters, assisted by Pharmacy Aides, Data Entry

    Operators and Cashiers on a predetermined basis so that at no time a pharmacy counter

    remains unattended. Regular training Programs keep the personnel motivated.

    There is already a process in place to secure the ISO 9000 certification. All these

    have made Apollo Pharmacy the 170 Crore company it is today, with 142 across the

    country.

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    PHARMACIES ARE CLASSIFIED UNDER FOUR CATEGORIES:

    i. Hospital Based Pharmacies (HBP)

    ii. Clinic Based Pharmacies (CBP)

    iii. Stand Alone Pharmacies (SAP)

    iv. IOC Retail Outlets (IOC)

    While the first three categories were self established, regarding IOC retail outlets, there is

    a running agreement with Indian Oil Corporation Limited (IOC) for dissemination of

    Apollo Pharmacy product through the "Convenio" stores in selected IOCL Retail Outlets

    The HBPs which are in the pipeline include Ahmedabad and across the world. Further

    almost about 40 different SAPs in the immediate future would be established at various

    locations all over INDIA. These are all addition to the existing pharmacies.

    TABLE: I

    TOTAL APOLLO PHARMACIES

    YEAR NO.OF.PHARMACIES

    2005-2006 206

    2006-2007 310

    2007-2008 420

    2008-2009 661

    CHART: I

    Total Apollo Pharmacies

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    APOLLO PHARMACY

    0

    100

    200

    300

    400

    500

    600

    700

    2005-

    2006

    2006-

    2007

    2007-

    2008

    2008-

    2009

    year

    No.of.p

    har

    TABLE: II

    CATEGORY WISE APOLLO PHARMACIES

    Category HBP CBP SAP Total

    Nos.

    No. OfPharmacies

    19 30 612 661

    CHART: II

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    Category Wise Apollo Pharmacies

    Hospital Based

    Pharmacies

    Clinic Based

    Pharmacies

    Standalone

    Pharmacies

    Careers:

    Apollo Pharmacy has transformed the concept of a Medical Shop, into a

    professionally structured and managed organization. Quality Service to customers is our

    prime focus, and this is done through Human Resources.

    The work environment at Apollo Pharmacy is open and informal. People are free to

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    innovative with ideas that benefit the organization and our customers. Ongoing training

    enables new leadership skills to conquer newer challenges. Team members create a

    unique pride of ownership among themselves, which is how the organization has rapidly

    grown.

    At Apollo Pharmacy, attitude towards one's job is as important as qualifications. Hence

    people with the right attitude are constantly moved up to higher positions. We believe in

    giving employees an opportunity to get to know themselves, help them to build upon

    their strengths and develop on the areas needing more attention.

    Apollo Pharmacy attracts the best talent from various fields and is an equal opportunity

    employer.

    Advantage:

    Quality

    Quality is the cornerstone of our existence. We have gained experience in

    pharmacy operations management over the last 2 decades and are committed to

    delivering best service in the industry. At Apollo Pharmacy, we believe in adhering to the

    highest quality standards, while serving our consumers.

    Genuine medicines

    We assure delivery of only genuine medicines to our customers.

    We refill your prescriptions

    For patients who consume medicines on regular basis we provide prescription

    refilling service on request. Sign up for refill service details.

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    24-hour customer support

    Apollo Pharmacy caters to a large consumer base, through its 24-hour

    pharmacy services.

    Computerized system

    The entire supply chain mechanism is computerized; hence redundancies are

    managed effectively. The system also discloses expiry date and batch numbers for

    medicines.

    International quality certification

    Apollo Pharmacy is JCI accredited *

    Value added services:

    We believe in offering its customers unparalleled retail experience. To

    enhance our customer's experience Apollo Pharmacy has introduced schemes like free

    health insurance, free delivery of prescriptions, round-the-clock service and more.

    24-hour service

    Apollo Pharmacy is geared up to cater to the Medication needs of our

    customers round the clock. Our 24-hour pharmacies dispense service benefits to our

    customers when it is most needed.

    Friendly pharmacist

    Every Apollo Pharmacy outlet is manned by our own competent

    pharmacist, who's always there to help customers with their medication needs.

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    Free Reminder Service

    We give a friendly reminder call about your medication as per your request.

    Should you wish to sign up for reminder service, do fill in your details.

    Helpline services

    For any queries related to your medication, please call our helpline service

    numbers in any location across the country.

    Free health camps

    We conduct free health camps at our network of Apollo Pharmacy in the

    country. Contact your nearest Apollo Pharmacy outlet for details.

    Free Health Insurance

    Free Health Insurance of Rs.20, 000/-, once your purchases cross Rs.6, 000/-

    a year.

    Health newsletters

    Free Health Newsletters for patients.

    SERVICES PROVIDED BY THE APOLLO PHARMACIES

    i. Facility Quality Assurance

    ii. Free Home Delivery (10a.m - 6p.m)

    iii. Optimal Maintenance of cold chain

    iv. 24hrs help line - 52023784 / 52068474

    v. Other value added services

    vi. Prescriptions attended by trained Pharmacists

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    vii. Availability of other lifestyle products

    viii. Medical camps at regular intervals

    ix. Doctor's Consultation available.

    CHAPTER III

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    ABOUT THE CONCEPT

    CHAPTER III

    3.1. ABOUT THE CONCEPT:

    Cost:

    The word cost has a wide variety of meaning. In common use, the word cost

    means price. Let it be assumed that cost is not the same as price. In management terms,

    cost refers to the expenditure and not the price. It also refers to something that must be

    sacrificed to obtain a particular thing. Thus cost is defined as the amount of expenditure

    (actual or national) incurred on or attributable to a given thing. It is also defined as the

    amount measured in money of cash expended or other property transferred, capital stock

    issued, service performed, or a liability incurred, in consideration of goods or services

    received or to be received. Cost is used in three different senses as the expected cost of a

    particular action, the cost of something purchased, and the cost of attaining some end,

    i.e., the sacrifice actually made to attain it.

    THE INCOME STATEMENT:

    The income statement, sometimes called on earnings statement, reports

    the profitability of a business organization for a stated period of time. In accounting,

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    profitability is measured for a period of time, such as a month or year, by comparing the

    revenues generated with the expenses incurred to produce these revenues.

    Revenues are the inflows of assets (such as cash) resulting from the sale

    of products or the rendering of services to customers. Expenses are costs incurred to

    produce revenues. Expenses are measured by the assets surrendered or consumed in

    servicing customers. If the revenues of a period exceed the expenses of the same period,

    net income results. Net income is often referred to as the earnings of the company. If

    expenses exceed, the business has a net loss, and it has operated unprofitability.

    OBJECTIVE OF FINANCIAL STATEMENT ANALYSIS:

    i. Financial statement analysis consists of applying analytical tools and

    techniques to financial statements and other relevant data to obtain useful

    information. To state the relationships between data and trends in those

    data that assess the companys past performance and current financial

    position. The information shows the results or consequences of prior

    managementdecisions. In addition, the information is used to predictions

    that may have a direct effect on decisions made by many users of financial

    statements.

    ii. Present company investors and potential company investors are interested

    in the future ability of a company to earn profits its profitability.

    iii. Sometimes outside parties are interested in predicting a companys

    solvency rather than its profitability. Short term solvency is affected by the

    liquidity of the company, which is the companys state of processing

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    liquid assets, such as cash and other assets that will soon be converted to

    cash. Since short-term debts must be paid soon, liquid assets must be

    available for their payment. For example, a bank that is asked to extend a

    90 day loan to a company would want to know the companys projected

    short term liquidity. Of course, the companys predicted ability to repay

    the 90 day loan is likely to be based, at least partially, on proven past

    ability to pay off debts.

    iv. Long term creditors are interested in a companys long-term solvency,

    which is usually determined by the relationship of a companys assets to

    its liabilities. Generally, a company is considered solvent when its assets

    exceed its liabilities so that the company has a positive stockholders

    equity. The larger the assets are in relation to the liabilities, the greater the

    long-term solvency of the company, since the companys assets could

    shrink significantly before its liabilities would exceed its assets and

    destroy the companys solvency.

    Reorder point sub system:

    If the replenishment system is efficient then less delivery time stock will be

    required.

    There are some objectives while managing the inventory control,

    i. To avoid lost sales

    ii. To gain quantity discounts

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    iii. To reduce ordering costs

    i. To avoid lost sales: If the firms do not hold adequate amount of goods, then there is

    a probability that the firm might lose some business.

    ii. To gain quantity discounts: Many suppliers provide goods at reduced prices if the

    firm orders for a large amount of goods.

    iii. To reduce ordering costs: When the firm places fewer orders of large quantities,

    the ordering costs will reduce.

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    CHAPTER IV

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    DATA COLLECTION & DATA ANALYSIS

    CHAPTER - IV

    4.1. DATA COLLECTION & DATA ANALYSIS:

    i. The project trainee selects the 5 Apollo pharmacies in Chennai.

    ii. Next the project trainee has study on heads of expenses and measures of Cost

    analysis for financial performance at Apollo pharmacy.

    iii. The data is analyzed which has been collected

    from Apollo pharmacies at kilpauk1, No: 475-B Kilpauk Garden Road,

    Chennai - 600 010, Phone No: 26461224. Nungambakkam2, No: 309,

    Valluvar Kottam High Road, Chennai - 600034, PhoneNo: 52061038. Sastri

    Nagar3, M.G.Road, opp.(Adyar Anantha Bhavan), Adyar, Chennai 600 020.

    Ashok Nagar4, No: 6, 9th Avenue Ashok Nagar, Chennai - 600083. Airport 5, -

    CHENNAI No: 27, Kamaraj Domestic Terminal Chennai, International

    Airport Division Chennai - 600 027.

    1 Kilpauk pharmacy2 Nungambakkam pharmacy3 Sastri Nagar pharmacy4 Ashok Nagar pharmacy5 Airport pharmacy

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    TABLE: III

    Income and expenditure statement of Apollo pharmacy at AIRPORT

    For the year ended

    Expenditure 2005-2006 2006-2007 2007-2008 2008-2009

    Salaries & Wages 204453 205464 460904 584975

    Statutory Benefit 26492.42 26500.42 47810.57 60760

    Non - Statutory Benefit 18007.2 18200.2 92173.2 50588.5

    Electricity Charges 59729 60729 92645 98632

    Office Maintenance 52011.5 52111.5 22656 16343

    Telephone Charges 46831 36831 45871 51734

    Printing & Stationary 20495 19590 18892 42447

    Traveling &

    Conveyance

    15717.65 16700.25 57485 67519.45

    Sales Promotion &

    Advertising Expenses

    2441.45 3020 5576 21801

    Repairs & Maintenance

    Others

    20516.5 19500.5 5220.6 12360

    Professional Charges 6387.6 6800.3 11970.99 4495

    Others 81122.06 85120.69 16028.95 11579.75

    Rent 266183 266183 344553 409113

    Grand Total 820387.4 816750.86 1221786 1432348

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    TABLE: IV

    Income and expenditure statement of Apollo pharmacy at ASHOK

    NAGAR For the year ended

    Expenditure 2005-2006 2006-2007 2007-2008 2008-2009

    Salaries & Wages 176616 177616 389264 463437

    Statutory Benefit 19014.42 19414.42 37536.16 47853

    Non - StatutoryBenefit

    36088.85 36288.85 76379 36474.6

    Electricity Charges 79740.3 80740.3 103688 91138

    Office Maintenance 37182.75 37382.75 31858.35 25623.5

    Telephone Charges 51141.97 51041.97 66631.91 38740.24

    Printing & Stationary 15441 15440 34024.6 25880.5

    Traveling &

    Conveyance

    1830 2950 9474 10761

    Sales Promotion &Advertising Expenses 4533.1 4300 1416.7

    Repairs &

    Maintenance Others

    14231.5 13210.23 12144 11096.5

    Professional Charges 6489.6 6910.6 41011.8 10674.8

    Others 5748.93 6200.3 14727.84 34703.58

    Rent 90000 90000 103500 103500

    Grand Total 538058.4 541495.42 921656.4 899882.7

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    TABLE: V

    Income and expenditure statement of Apollo pharmacy at KILPAUK

    For the year ended

    Expenditure 2005-2006 2006-2007 2007-2008 2008-2009

    Salaries & Wages 256005 266005 443460 409077

    Statutory Benefit 29423.85 29423.85 48502.58 42950

    Non - Statutory

    Benefit

    46635 46685 69510.9 36053.26

    Electricity Charges 84564 84690 67328 92628

    Office Maintenance 113628 113628 56059.5 29092.4

    Telephone Charges 38594 35594 59432 50588

    Printing & Stationary 32402 33010 36607.5 33859

    Traveling &

    Conveyance

    5200 11500 4306 4215

    Sales Promotion &Advertising Expenses

    3231.6 4000 13285.7 33353

    Repairs &Maintenance Others

    14232 12020 12523.2 34309

    Professional Charges 4887.6 5010.3 12736 6179.4

    Others 8518.62 8710.23 19835.76 24591.74

    Rent 155036 155036 299828 329633

    Grand Total 792357.7 805312.38 1143415 1126529

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    TABLE: VI

    Income and expenditure statement of Apollo pharmacy at

    NUNGAMBAKKAM For the year ended

    Expenditure 2005-2006 2006-2007 2007-2008 2008-2009

    Salaries & Wages 209533 300533 482162 600324

    Statutory Benefit 31186.43 31486.43 48957.72 61659

    Non - Statutory

    Benefit

    70733.1 70633.1 153693.65 155483.75

    Electricity Charges 81032 81532 120024 129831

    Office Maintenance 103462 103462 69847.05 31527.35

    Telephone Charges 57174.44 56874.44 54998.67 100519.67

    Printing & Stationary 21091.85 21020.5 32405.05 46696.35

    Traveling &

    Conveyance

    1729 8880 3670 5169

    Sales Promotion &

    Advertising Expenses

    10223.95 8000 22307.8 29153.6

    Repairs &

    Maintenance Others

    31175 29950.2 12736.5 13898

    Professional Charges 12489.6 12700.8 12920.99 14664.8

    Others 33426.69 33720.3 24678.81 29956.84

    Rent 120000 120000 120000 120000

    Grand Total 783257.1 878792.77 1158402 1338883

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    TABLE: VII

    Income and expenditure statement of Apollo pharmacy at SASTRI

    NAGAR For the year ended

    Expenditure 2005-2006 2006-2007 2007-2008 2008-2009

    Salaries & Wages 240764 245764 268776 504462

    Statutory Benefit 28262.29 29262.29 20410.57 49936Non - StatutoryBenefit

    70410.8 70510.8 54790.95 160632.4

    Electricity Charges 76074 76274 93355 114849

    Office Maintenance 94700.2 94900.2 46504.8 31969.85

    Telephone Charges 88265 82265 72916 64088

    Printing & Stationary 36240.5 36340.5 21152 42101

    Traveling &

    Conveyance

    18151 11510.25 3655 6725

    Sales Promotion &

    Advertising Expenses

    9962.15 9000 10585.75 26252.83

    Repairs &

    Maintenance Others

    3664 3250.6 3763.1 13333.58

    Professional Charges 5387.6 5500 21786.2 7221.4

    Others 37097.87 37730.25 16699.2 31196.13

    Rent 175392 175392 209988 232488

    Grand Total 884371.4 877699.89 844382.6 1285255

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    TABLE: VIII

    DATA COLLECTION FROM 5 APOLLO PHARMACIES TO DO GROSS

    PROFIT ANALYSIS

    Branch name Particulars 2005-2006 2006-2007 2007-2008 2008-2009

    Airport Sales 4782870.55 4921574.8 5753489.94 5765790.22

    Ashok Nagar ,, 5300538.3 5565565.22 7666577.81 8143262.96Kilpauk ,, 6613604.55 6944285.78 6485596.68 7117389.67

    Nungambakkam ,, 6655335.35 6988102.12 6578753.94 7952994.93

    Sastri Nagar ,, 9083529.28 9537706.74 7836725.03 8828413.17

    Airport Cost of sales 3693033.41 3693033.41 4517689.09 4916468.96

    Ashok Nagar ,, 4178813.39 4178813.39 5935602.01 7146314.46

    Kilpauk ,, 5289373.95 5289373.95 5077971.55 6191589.29

    Nungambakkam ,, 5322554.87 5322554.87 5174559.06 6804481.61

    Sastri Nagar ,, 7363756.6 7263756.6 6093162.83 7670998.66

    Gross profit = sales - cost of sales

    Gross profit % = Gross profit/ Sales *100

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    Calculation of Gross Profit in AIRPORT PHARMACY

    2005-2006:

    Gross profit = sales - cost of sales

    = 4782870.55 - 3693033.41

    = Rs.1089837.14

    Gross profit % = Gross profit/ Sales *100

    = 1089837.14 / 4782870.55 * 100

    = 22.79 %

    2006-2007:

    Gross profit = 4921574.8 3693033.41

    = Rs.1228540.39

    Gross profit % = 1228540.39 / 4921574 *100

    = 24.96 %

    2007-2008:

    Gross profit = 5753489.94 - 4517689.09

    = Rs.1235800.85

    Gross profit % = 1235800.85 / 5753489.94 * 100

    = 21.48 %

    2008-2009:

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    Gross profit = 5765790.22 - 4916468.96

    = Rs.849321.26

    Gross profit % = 849321.26 / 5765790.22 * 100

    = 14.73 %

    TABLE: IX

    GROSS PROFIT OF APOLLO PHARMACY AT AIRPORT

    BRANCH NAME YEAR GROSS PROFIT

    %

    Airport 2005-2006 22.79

    ,, 2006-2007 24.96

    ,, 2007-2008 21.48

    ,, 2008-2009 14.73

    CHART: III

    Gross Profit of Apollo Pharmacy at Airport

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    Airport

    22.7924.96

    21.48

    14.73

    0

    5

    10

    15

    20

    25

    30

    2005-

    2006

    2006-

    2007

    2007-

    2008

    2008-

    2009

    year

    GrossProfit%

    Calculation of Gross Profit in ASHOK NAGAR PHARMACY

    2005-2006:

    Gross profit = sales - cost of sales

    = 5300538.3 - 4178813.39

    = Rs.1121724.91

    Gross profit % = Gross profit/ Sales *100

    = 1121724.91 / 5300538.3 *100

    = 21.16 %

    2006-2007:

    Gross profit = 5565565.22 4178813.39

    = Rs.1386751.83

    Gross profit % = 1386751.83 - 5565565.22 *100

    = 24.92 %

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    2007-2008:

    Gross profit = 7666577.81 - 5935602.01

    = Rs.1730975.8

    Gross profit % = 1730975.8 / 7666577.81 *100

    = 22.58 %

    2008-2009:

    Gross profit = 8143262.96 - 7146314.46

    = Rs.996948.5

    Gross profit % = 996948.5 / 8143262.96 * 100

    = 12.24%

    TABLE: X

    GROSS PROFIT OF APOLLO PHARMACY AT ASHOK NAGAR

    BRANCH NAME YEAR GROSS PROFIT

    %

    Ashok Nagar 2005-2006 21.16

    ,, 2006-2007 24.92

    ,, 2007-2008 22.58

    ,, 2008-2009 12.24

    CHART: IV

    Gross Profit of Apollo Pharmacy at Ashok Nagar

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    Ashok Nagar

    21.16

    24.9222.58

    12.24

    0

    5

    10

    15

    20

    25

    30

    2005-

    2006

    2006-

    2007

    2007-

    2008

    2008-

    2009

    year

    GrossProfit%

    Calculation of Gross Profit in KILPAUK PHARMACY

    2005-2006:

    Gross profit = sales - cost of sales

    = 6613604.55 - 5289373.95

    = Rs.1324230.6

    Gross profit % = Gross profit/ Sales *100

    = 1324230.6 / 6613604.55 *100

    = 20.02 %

    2006-2007:

    Gross profit = 6944285.78 5289373.95 *100

    = Rs.1654910.83

    Gross profit % = 1654910.83 / 6944285.78 *100

    = 23.83 %

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    2007-2008:

    Gross profit = 6485596.68 5077971.55

    = Rs.1407625.13

    Gross profit % = 1407625.13 / 6485596.68 * 100

    = 21.70 %

    2008-2009:

    Gross profit = 7117389.67 6191589.29

    = Rs.925800.38

    Gross profit % = 925800.38 / 7117389.67 *100

    = 13.01 %

    TABLE: XI

    GROSS PROFIT OF APOLLO PHARMACY AT KILPAUK

    BRANCH NAME YEAR GROSS PROFIT

    %

    Kilpauk 2005-2006 20.02

    ,, 2006-2007 23.83

    ,, 2007-2008 21.70

    ,, 2008-2009 13.01

    CHART: V

    Gross Profit of Apollo Pharmacy at Kilpauk

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    Kilpauk

    20.02

    23.8321.7

    13.01

    0

    5

    10

    15

    20

    25

    30

    2005-

    2006

    2006-

    2007

    2007-

    2008

    2008-

    2009

    year

    GrossProfit%

    Calculation of Gross Profit in NUNGAMBAKKAM PHARMACY

    2005-2006:

    Gross profit = sales - cost of sales

    = 6655335.35 - 5322554.87

    = Rs.1332780.48

    Gross profit % = Gross profit / Sales *100

    = 1332780.48 / 6655335.35 *100

    = 20.03 %

    2006-2007:

    Gross profit = 6988102.12 5322554.87

    = Rs.1665547.25

    Gross profit % = 1665547.25 / 6988102.12 *100

    = 23.83 %

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    2007-2008:

    Gross profit = 6585596.68 5174559.06

    = Rs.1404194.88

    Gross profit % = 1404194.88 / 6585596.68 *100

    = 21.34 %

    2008-2009:

    Gross profit = 7952994.93 6804481.61

    = Rs.1148513.32

    Gross profit % = 1148513.32 / 7952994.93 * 100

    = 14.44 %

    TABLE: XII

    GROSS PROFIT OF APOLLO PHARMACY AT NUNGAMBAKKAM

    BRANCH NAME YEAR GROSS PROFIT

    %

    Nungambakkam 2005-2006 20.03

    ,, 2006-2007 23.83

    ,, 2007-2008 21.34

    ,, 2008-2009 14.44

    CHART: VI

    Gross Profit of Apollo Pharmacy at Nungambakkam

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    Nungambakkam

    20.03

    23.8321.34

    14.44

    0

    5

    10

    15

    20

    25

    30

    2005-

    2006

    2006-

    2007

    2007-

    2008

    2008-

    2009

    year

    GrossProfit

    Calculation of Gross Profit in SASTRI NAGAR PHARMACY

    2005-2006:

    Gross profit = sales - cost of sales

    = 9083529.28 - 7363756.6

    = Rs.1719772.68

    Gross profit % = Gross profit/ Sales *100

    = 1719772.68 / 9083529.28 *100

    = 18.93 %

    2006-2007:

    Gross profit = 9537706.74 7263756.6

    = Rs.2273949.14

    Gross profit % = 2273949.14 / 9537706.74 *100

    = 23.84 %

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    2007-2008:

    Gross profit = 7836725.03 6093162.83

    = Rs.1743562.2

    Gross profit % = 1743562.2 / 7836725.03 * 100

    = 22.25 %

    2008-2009:

    Gross profit = 8828413.17 7670998.66

    = Rs.1157414.51

    Gross profit % = 1157414.51 / 8828413.17 * 100

    = 13.11 %

    TABLE: XIII

    GROSS PROFIT OF APOLLO PHARMACY AT SASTRI NAGAR

    BRANCH NAME YEAR GROSS PROFIT

    %

    Sastri Nagar 2005-2006 18.93

    ,, 2006-2007 23.84

    ,, 2007-2008 22.25

    ,, 2008-2009 13.11

    CHART: VII

    Gross Profit of Apollo Pharmacy at Sastri Nagar

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    Sastri Nagar

    18.93

    23.8422.25

    13.11

    0

    5

    10

    15

    20

    25

    30

    2005-

    2006

    2006-

    2007

    2007-

    2008

    2008-

    2009

    year

    GrossProfit%

    TABLE: XIV

    DATA COLLECTION FROM 5 APOLLO PHARMACIES TO DO NET PROFIT

    ANALYSIS

    Bra

    nch name

    Particulars 2005-

    2006

    2006-

    2007

    2007-

    2008

    2008-2009

    Airport Sales 4782870.55 4921574.8 5753489.94 5765790.22

    Ashok Nagar ,, 5300538.3 5565565.22 7666577.81 8143262.96

    Kilpauk ,, 6613604.55 6944285.78 6485596.68 7117389.67

    Nungambakkam ,, 6655335.35 6988102.12 6578753.94 7952994.93

    Sastri Nagar ,, 9083529.28 9537706.74 7836725.03 8828413.17

    Airport Gross profit 1089837.14 1228540.39 1235800.85 849321.26

    Ashok Nagar ,, 1121724.91 1386751.83 1730975.8 996948.5Kilpauk ,, 1324230.6 1654910.83 1407625.13 925800.38

    Nungambakkam ,, 1332780.48 1665547.25 1404194.88 1148513.32

    Sastri Nagar ,, 1719772.68 2273949.14 1743562.2 1157414.51

    Airport Employee costs 248952.62 250164.62 600887.77 696323.5

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    Ashok Nagar ,, 231719.27 233319.27 503179.16 547764.6

    Kilpauk ,, 332063.85 342113.85 561473.48 488080.26

    Nungambakkam ,, 311452.53 402652.53 684813.37 817466.75

    Sastri Nagar ,, 339437.09 345537.09 343977.52 715030.4

    Airport Administrativecosts and other

    costs

    571434.76 566586.24 620898.54 736024.2

    Ashok Nagar ,, 306339.15 308176.15 418477.2 352118.12

    Kilpauk ,, 460293.82 463198.53 581941.66 638448.54

    Nungambakkam ,, 471804.53 476140.24 473588.87 521416.61

    Sastri Nagar ,, 544934.32 532162.8 500405.05 570224.79

    Net profit = Gross profit Employee costs Administrative costs and other costs

    Net profit % = Net profit / sales * 100

    Calculation of Net Profit in AIRPORT PHARMACY

    2005-2006:

    Net profit = Gross profit Employee costs Administrative costs and other costs

    = 1089837.14 248952.62 571434.76

    = Rs.269449.8

    Net profit % = Net profit / sales * 100

    = 269449.8 / 4782870.55 *100

    = 5.63 %

    2006-2007:

    Net profit = 1228540.39 250164.62 566586.24

    = Rs.411789.5

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    Net profit % = 411789.5 / 4921574.8*100

    = 8.37 %

    2007-2008:

    Net profit = 1235800.85600887.77620898.54

    = Rs.14014.54

    Net profit % = 14014.54 / 5753489.94*100

    = 0.24 %

    2008-2009:

    Net profit = 849321.26 696323.5 736024.2

    = Rs.-583026.44

    Net profit % = -583026.44 / 5765790.22*100

    = -10.11 %

    TABLE: XV

    NET PROFIT OF APOLLO PHARMACY AT AIRPORT

    BRANCH NAME YEAR NET PROFIT

    %

    Airport 2005-2006 5.63

    ,, 2006-2007 8.37

    ,, 2007-2008 0.24

    ,, 2008-2009 -10.11

    CHART: VIII

    Net Profit of Apollo Pharmacy at Airport

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    Airport

    5.63

    8.37

    0.24

    -10.11

    -15

    -10

    -5

    0

    5

    10

    2005-

    2006

    2006-

    2007

    2007-

    2008

    2008-

    2009

    year

    NetProfit%

    Calculation of Net Profit in ASHOK NAGAR PHARMACY

    2005-2006:

    Net profit = Gross profit Employee costs Administrative costs and other costs

    = 1121724.91 231719.27 306339.15

    = Rs.583666.5

    Net profit % = Net profit / sales * 100

    = 583666.5 / 5300538.3 *100

    = 11.01 %

    2006-2007:

    Net profit = 1386751.83 233319.27 308176.15

    = Rs.845256.4

    Net profit % = 845256.4 / 5565565.22 *100

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    = 15.19 %

    2007-2008:

    Net profit = 1730975.8 503179.16 418477.2

    = Rs.809319.44

    Net profit % = 809319.44 / 7666577.81 * 100

    = 10.56 %

    2008-2009:

    Net profit = 996948.5 547764.6 352118.12

    = Rs.97065.78

    Net profit % = 97065.78 / 8143262.96 * 100

    = 1.92 %

    TABLE: XVI

    NET PROFIT OF APOLLO PHARMACY AT ASHOK NAGAR

    BRANCH NAME YEAR NET PROFIT

    %

    ASHOK NAGAR 2005-2006 11.01

    ,, 2006-2007 15.19

    ,, 2007-2008 10.56

    ,, 2008-2009 1.92

    CHART: IX

    Net Profit of Apollo Pharmacy at Ashok Nagar

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    Ashok Nagar

    11.01

    15.19

    10.56

    1.92

    0

    2

    4

    6

    8

    10

    12

    14

    16

    2005-

    2006

    2006-

    2007

    2007-

    2008

    2008-

    2009

    year

    NetProfit%

    Calculation of Net Profit in KILPAUK PHARMACY

    2005-2006:

    Net profit = Gross profit Employee costs Administrative costs and other costs

    = 1324230.6 332063.85 460293.82

    = Rs.531872.9

    Net profit % = Net profit / sales * 100

    = 531872.9 / 6613604.55 *100

    = 8.04 %

    2006-2007:

    Net profit = 1654910.83 342113.85 463198.53

    = Rs.849598.4

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    Net profit % = 849598.4 / 6944285.78

    = 12.23 %

    2007-2008:

    Net profit = 1407625.13 561473.48 581941.66

    = Rs.264209.99

    Net profit % = 264209.99 / 6485596.68 * 100

    = 4.07 %

    2008-2009:

    Net profit = 925800.38 488080.26 638448.54

    = Rs.-200728.42

    Net profit % = -200728.42 / 7117389.67 * 100

    = -2.82 %

    TABLE: XVII

    NET PROFIT OF APOLLO PHARMACY AT KILPAUK

    BRANCH NAME YEAR NET PROFIT

    %

    Kilpauk 2005-2006 8.04

    ,, 2006-2007 12.23

    ,, 2007-2008 4.07

    ,, 2008-2009 -2.82

    CHART: X

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    Net Profit of Apollo Pharmacy at Kilpauk

    Kilpauk

    8.04

    12.23

    4.07

    -2.82-4

    -2

    0

    2

    4

    6

    8

    10

    12

    14

    2005-

    2006

    2006-

    2007

    2007-

    2008

    2008-

    2009

    year

    NetProfit%

    Calculation of Net Profit in NUNGAMBAKKAM PHARMACY

    2005-2006:

    Net profit = Gross profit Employee costs Administrative costs and other costs

    = 1332780.48 311452.53 471804.53

    = Rs.549523.4

    Net profit % = Net profit / sales * 100

    = 549523.4 / 6655335.35 *100

    = 8.26 %

    2006-2007:

    Net profit = 1665547.25 402652.53 476140.24

    = Rs.786754.5

    Net profit % = 786754.5 / 6988102.12 *100

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    = 11.26 %

    2007-2008:

    Net profit = 1404194.88 684813.37 473588.87

    = Rs.245792.64

    Net profit % = 245792.64 / 6578753.94 * 100

    = 3.74 %

    2008-2009:

    Net profit = 1148513.32 817466.75 521416.61

    = Rs.-190370.04

    Net profit % = -190370.04 / 7952994.93 * 100

    = -2.39 %

    TABLE: XVIII

    NET PROFIT OF APOLLO PHARMACY AT NUNGAMBAKKAM

    BRANCH NAME YEAR NET PROFIT

    %

    Nungambakkam 2005-2006 8.26

    ,, 2006-2007 11.26

    ,, 2007-2008 3.74

    ,, 2008-2009 -2.39

    CHART: XI

    Net Profit of Apollo Pharmacy at Nungambakkam

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    Nungambakkam

    8.26

    11.26

    3.74

    -2.39-4

    -2

    0

    2

    4

    6

    810

    12

    2005-

    2006

    2006-

    2007

    2007-

    2008

    2008-

    2009

    year

    NetProfit%

    Calculation of Net Profit in SASTRI NAGAR PHARMACY

    2005-2006:

    Net profit = Gross profit Employee costs Administrative costs and other costs

    = 1719772.68 339437.09 544934.32

    = Rs.835401.3

    Net profit % = Net profit / sales * 100

    = 835401.3 / 9083529.28 *100

    = 9.20 %

    2006-2007:

    Net profit = 2273949.14 345537.09 532162.8

    = Rs.1396249

    Net profit % = 1396249 / 9537706.74 *100

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    = 14.64 %

    2007-2008:

    Net profit = 1743562.2 343977.52 500405.05

    = Rs.899179.63

    Net profit % = 899179.63 / 7836725.03 * 100

    = 11.47 %

    2008-2009:

    Net profit = 1157414.51 715030.4 -570224.79

    = Rs.-127840.68

    Net profit % = -127840.68 / 8828413.17 * 100

    = -1.45 %

    TABLE: XIX

    NET PROFIT OF APOLLO PHARMACY AT SASTRI NAGAR

    BRANCH NAME YEAR NET PROFIT

    %

    Sastri Nagar 2005-2006 9.20

    ,, 2006-2007 14.64

    ,, 2007-2008 11.47

    ,, 2008-2009 -1.45

    CHART: XII

    Net Profit of Apollo Pharmacy at Sastri Nagar

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    Sastri Nagar

    9.2

    14.64

    11.47

    -1.45-4

    -2

    0

    2

    4

    6

    8

    10

    12

    14

    16

    2005-

    2006

    2006-

    2007

    2007-

    2008

    2008-

    2009

    year

    NetProfit%

    Analysis for Apollo stores and outside purchases

    TABLE: XX

    PURCHASES ON 2007-2008

    BRANCH NAME TOTAL

    COST OF

    SALES

    PURCHASES

    FROM

    APOLLO

    STORES

    %

    OUTSIDE

    PURCHASES

    (Other

    pharmacy)

    %

    Airport 4517689.09 4274777.91 94.62 242911.18 5.38

    Ashok Nagar 5935602.01 5660043.38 95.36 275558.63 4.64

    Kilpauk 5077971.55 4787021.12 92.51 387537.94 7.49

    Nungambakkam 5174559.06 5931200.22 97.34 161962.61 2.66

    Sastri Nagar 6093162.83 4729352.21 93.13 348619.34 6.87

    TABLE: XXI

    PURCHASES ON 2008-2009

    BRANCH NAME COST OF

    SALES

    PURCHASES

    FROMAPOLLO

    %

    OUTSIDE

    PURCHASES(other

    %

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    STORES pharmacy)

    Airport 4916468.96 4537609.3 92.29 378859.66 7.71

    Ashok Nagar 7146314.46 6395756.26 89.5 750558.20 10.5

    Kilpauk 6191589.29 5848678.2 85.74 955803.41 14.3

    Nungambakkam 6804481.61 7289948.6 85.95 381050.06 14

    Sastri Nagar 7670998.66 5308804.37 95.03 882784.92 4.97

    BELOW CHARTS REPRESENTS OUTSIDE PURCHASES %

    CHART: XIII

    Outside purchases of Apollo pharmacy at Airport

    Airport

    5.38

    7.71

    0

    1

    2

    3

    4

    5

    6

    7

    8

    9

    2007-

    2008

    2008-

    2009

    year

    OUTSIDEPURCHAS

    CHART: XIV

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    Outside purchases of Apollo pharmacy at Ashok Nagar

    Ashok Nagar

    4.64

    10.5

    0

    2

    4

    6

    8

    10

    12

    2007-

    2008

    2008-

    2009

    year

    OUTSIDEPURCHASES

    CHART: XV

    Outside purchases of Apollo pharmacy at Kipauk

    Kilpauk

    7.49

    14.3

    0

    2

    4

    6

    8

    10

    12

    14

    16

    2007-

    2008

    2008-

    2009

    year

    OUTSIDEPURCHASES%

    CHART: XVI

    Outside purchases of Apollo pharmacy at Nungambakkam

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    Nungambakkam

    2.66

    14

    0

    2

    4

    6

    8

    10

    12

    14

    16

    2007-

    2008

    2008-

    2009

    year

    OUTSIDEPURCHASES%

    CHART: XVII: Outside purchases of Apollo pharmacy at Sastri Nagar

    Sastri Nagar

    6.87

    4.97

    0

    1

    2

    3

    4

    5

    6

    7

    8

    2007-

    2008

    2008-

    2009

    year

    OUTSIDEPURCHASE

    S%

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    CHAPTER V

    FINDINGS, SUGGESTIONS AND

    CONCLUSION

    CHAPTER - V

    5.1. FINDINGS:

    The project trainee selects the 5 Apollo pharmacies in Chennai.

    Next the project trainee has study on heads of expenses and measures of Cost

    analysis for financial performance at Apollo pharmacy. So, the project trainee has

    found out,

    i. The required No. of items are not fully delivered to the branches and it is

    adjusted with stock in hand and delivered at reduced size, some of the items

    not in hand is delivered as postponed it will affect the sale of the particular

    branch.

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    ii. The purchase and issue is run in the daily manner will increase the Operating

    cost and Transportation cost.

    iii. The excess out side purchase made by the branches leads to minimize the

    profit even though the sale is more.

    iv. The Reorder Level fixed to the each branches should be examined

    periodically.

    v. The above 5 pharmacy Income and Expenditure statement has the year by

    year changing the expenditure as well as increase the no. of pharmacies. But 5

    pharmacy has the financial performance is not a good.

    vi. 2005-2006 and 2006-2007 has the financial performance is good. Then 2007-

    2008 and 2008-2009 has the financial performance is not a good. Because, no.

    of. Pharmacies were increase as well as outside purchases are more in 2007-

    2008 and 2008-2009. So the profit is low.

    vii. The pharmacies were purchase from outside was 5 to 15%. This 5 to 15%

    outside purchases for cost of sales. But this outside purchases they havenot

    earned a profit also the transportation cost and conveyance were increased.

    viii. Apollo was created a good image on the customers minds. But, why they

    spent for advertisement costs.

    ix. Year by year there is anincrease inthe telephone charges.

    5.2. SUGGESTIONS:

    The trainee suggests the following to the companys better functioning:

    i. The integration of inventory system currently followed by the organization is

    not efficient to balance the demand and issues of the branches. So the

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    organization can be reduced cost in through better integration of Inventory

    Control System through internet based applications. And it will be easy to

    manage all the operation of the branches as well as cost.

    ii. The organization can make the bulk purchases andthey should avoid outside

    purchases.

    iii. Avoid the outside purchases as well as the organization can distribute the

    inventory to branches in effectively for demand itself. So they can maximize

    the efficiency of the sales personnel and also the purchase cost (order cost) is

    also reduced.

    iv. The organization can purchase their own or lease buildings they avoid the

    rent.

    v. The organization can purchase the own vehicles they have reduce the

    transportation cost.

    vi. Year by year there is an increase in the telephone charges. So avoid the

    personal calls, anduse the mails and SMS which will reduce the telephone

    charges.

    vii. Apollo was created a good image on the customers minds. So pharmacy can

    reduce the advertisement costs. Because year by year sales was more.

    viii. The above 5 pharmacy outside purchases they not earned a profit. Because

    other pharmacy was earned a profit. But Apollo pharmacy not loses the

    customer. So the Apollo pharmacy can make the pulk purchases they have

    order cost is reduced, profit also more and customer also increases as well as

    transportation cost and conveyance will decrease.

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    ix. The Apollo pharmacy follows the reorder point system is periodically. So

    pharmacy can inform the stock level in daily basis to management. Because

    the way easy to give the order to suppliers and supply the goods in pharmacy.

    This time the apollo pharmacy have some benefits,

    1. To avoid lost sales

    2. To gain quantity discounts

    3. To reduce ordering costs

    5.3. CONCLUSION:

    From the study the trainee has come out with the following conclusions:

    i. From the study on cost Control System of the organization, even though it is

    making the bulk purchases as well as avoid the outside purchases. So they have

    effective sales in pharmacies.

    ii. It can be reduced through better integration of Inventory Control System through

    internet based applications and it will be easy to manage all the operation of the

    branches.

    iii. The organization may concentrate more on purchases from the companies

    (suppliers) it will be more profitable as well as discounts also received in

    purchase order.

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    iv. The pharmacies can reduce the unnecessary cost, advertisement costs and

    transportation costs they have good financial performance.

    BIBLIOGRAPHY

    Books:

    1. Roger H.Hermanson, James Don Edwards and L.Gayle Rayburn

    Financial Accounting Second Edition Year 2004-2005.

    2. Jain S.P. and K.Narang, Cost Accounting, Kalyani publishers

    3. Financial management - Second edition (2005 ICFAI university press)

    4. Mr. Nithyanantham Project Inventory Control System Distance

    Education Madurai Kamaraj University Year 2006-2007

    Web Sites:

    1. http://www.apollopharmacy.in/advantage.html

    2. http://www.apollopharmacy.in/locator.php

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    3. http://www.apollopharmacy.in/services.html

    4. http://www.apollopharmacy.in/services.html

    Annual Reports:

    1. Apollo pharmacy - Income and Expenditure Statement on 2005-2006,

    2006-2007, 2007-2008 and 2008-2009.

    http://www.apollopharmacy.in/services.htmlhttp://www.apollopharmacy.in/services.htmlhttp://www.apollopharmacy.in/services.htmlhttp://www.apollopharmacy.in/services.html