A<br />Project report<br />On<br /> Ratio Analysis for Treffer Pharmaceuticals”<br />Submitted To<br />RAJIV GANDHI COLLEGE OF MANAGEMENT<br />MBA PROGRAMME <br /> (2009-2011) <br />Affiliated To<br />GUJARAT TECHNOLOGICAL UNIVERSITY<br />In Partial Fulfillment of the requirement for the degree of <br />MASTER OF BUSINESS ADMINISTRATION<br />Submitted by<br /> MR.VIKESH R. KALSARIYA <br />(0974705922055)<br />MBA (2nd - SEMESTER)<br />RAJIV GANDHI COLLEGE OF MANAGEMENT<br />MBA Campus, Ahmedabad Highway, BALASINOR, Dist-KHEDA<br /> <br /> <br /> <br /> PREFACE<br /> “THE MAN WHO HAS NO IMAGINATION HAS NO WINGS”<br />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.<br />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.<br />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.<br />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.<br />ACKNOWLEDGEMENT<br />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<br /> 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<br /> 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. <br /> <br />DECLARATION<br />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.<br /> 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. <br /> I also promise not to allow any other person to copy any part of this report in any form.<br /> <br /> 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. <br /> ---------------------------- <br /> Kalsariya Vikesh R. <br /> INDEX<br /><ul><li>SR NO.CONTENTPAGE NO.1TITLE PAGE2CERTIFICATE (Company)3CERTIFICATE (College)4PREFACEI5ACKNOWLEGEMENTII6DECLARATIONIII7GENERAL INFORMATIONIntroductionHistoryHighlightsOrganizational Structure Size of OrganizationForm of Organization18MARKETING DEPARTMENTIntroductionDepartment Structure119FINANCE DEPARTMENTIntroductionFinancial Planning Capital StructureCash ManagementRation Analysis1410PERSONNEL DEPARTMENTIntroductionEmployee RemunerationTraining and Development2711PRODUCTION DEPARTMENTIntroductionProduction process3011PURCHASE & STORE DEPARTMENTIntroductionOrganization chartPackning & labeling 12EXECUTIVE SUMMARY OF THE WORKING CAPITAL & RATIOIntroduction Types of working capitalInterpretation of the working capital of pharmaceuticals industryTypes Ratio Advantages & limitation of ratio3713RESEARCH REPORT IntroductionObjectives of the StudyResearch MethodologyResearch DesignData CollectionSampling DesignSampling StepsResearch AnalysisLimitation of the Study Findings and Conclusion5314ANNEXUREResearch Instrument Balance of the last year6015BIBLIOGRAPHY62</li></ul> <br />GENERAL INFORMATION ABOUT THE COMPANY<br />Introduction<br />Location<br /><ul><li>Product profile</li></ul>Organizational Structure<br />Size of Organization<br />Form of Organization<br />COMPANY’SPROFILE<br /> <br />INTRODUCTION<br />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. <br /> <br />COMPANY PROFILE<br />History of Treffer pharmaceuticals <br /> 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 <br /> To cherish the first generation of friendship venturing MR. Hiren bhai .M. Patel & Mr. Atit .B.Patel joined the business as production chemist.<br /> 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. <br /> “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.” <br /> 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.<br />LOCATION OF THE COMPANY: <br />Treffer pharmaceuticals<br />C-23, Udhyognagar.<br />Navsari -396445<br />Gujarat (India).<br />Owner of the company<br />Head of finance: - Mr. Atitbhai .B.Patel<br />Head of marketing: - Mr.Hirenbhai. M.patel<br />Head of personnel:-Mr.Bipinbhai Patel<br />Head of production:-Mrs. Prabhaben Mandviwala<br />Objective of the company:-<br /><ul><li> To get maximum profit.
ORGANISATIONAL STRUCTURE </li></ul> <br />Owner<br />QualityControlDepartmentManagerMarketingDepartmentProductionDepartmentAdministrativeDepartmentAdministrator<br />Office In chargeAnalyticalChemistMarketingManagerProductionManager<br />StoreKeeperkeeperAssistantChemistRegionalManager <br />AreaSalesManager<br />SalesRepresentative<br />Personnel dept.:-<br /> 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. <br /> <br />Production Department:-<br /> <br />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 .<br /><ul><li>
Research & Development </li></ul> Marketing dept:- <br />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. <br />Finance dept:- <br /><ul><li> </li></ul>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. <br /> Purchase and Stores Department:<br /> In Treffer Pharmaceuticals the production manager and finance manger handle all the function of purchase and stores dept. jointly. <br />Welcomes you to go through<br /> <br /> Introduction<br />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.<br />Oder processing system:- <br /> 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. <br /> <br />Reporting system:-<br /> 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. <br />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.<br /> <br />Statement of expenses:- <br /> 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.<br />Collection of receivable:- <br /> 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. <br /> <br /> PRICING:- <br /><ul><li>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 .
</li></ul> Welcomes you to go through<br /> <br /> <br /><ul><li>Introduction
Ratio analysis</li></ul> Introduction<br /> 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.<br />In Shorty, procurement of funds, their utilization and proper management is known as finance manger <br /> <br /> <br /><ul><li> ORGANAZATION CHART:-
</li></ul>Finance Director<br /> <br />General Manager<br /> <br />Finance Manager <br /> <br />Account assistant<br /> INTRODUCTION<br /> <br /> 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. <br /> 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. <br /> Financial management concern with three activities<br /> 1. Anticipating financial needs<br /> 2. Acquiring financial resources<br /> 3. Allocating fund in business.<br /> The role and responsibility of financial management in the organization are as follows<br />financing the new project <br />Posting them in ledger and recording the data in computers <br />arranging for the required funds <br />recording the transactions in journal and subsidiary books<br />Preparing final accounts<br />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. <br /> <br /> There are two types of financial information first show the profit or loss of the business & other show the assets & liabilities of the organization. <br />RELATIONSHIP WITH OTHER DEPARTMETS:<br />Finance is closely related with different types of department. The relationships of finance with other department are as follows <br />RELATIONSHIP WITH ECONOMICS:<br /> 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.<br /> 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.<br />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 <br />RELATIONSHIP WITH MARKETING<br /> 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. <br />RELATIONSHIP WITH ACCOUNTING:<br /> 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. <br />RELATIONSHIP WITH PRODUCTION:<br /> 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.<br />RELATIONSHIP WITH PERSONNEL DEPARTMENT:<br />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<br /> SOURCE OF FUNDS:<br /> 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. <br /> COST CONTROL SYSTEM: <br /> 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: <br />Replacement of worm out machines and equipments with new ones.<br />Make or buy decision<br />Extension of existing production plant.<br />By having latest technology machines and equipment.<br />By producing large quantities of products.<br />Controlling the inventory levels.<br />To do investments where maximum returns can be achieve.<br /> ACCOUNTING POLICIES:<br /> 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.<br />Bases of accounting:-<br /> The preparation of accounts is being done on the basis of historical cost concept<br />Investments<br /> 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.<br />Depreciation:<br /> 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. <br /> 1. Up to the data of disposal as disposal of fixed assets during the year.<br /> 2. from the data of addition to addition to the fixed assets during the year. <br />Revenue: <br /> 1. Income of insurance claim is accounted as and when they are admitted.<br /> 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.<br />Inventorie<br />There are three type of inventories raw material, work in process, & finished goods. There are policy and method to determine its value.<br />Fixed assets:<br /> 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. <br />Contingent liabilities: <br /> 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. <br /> ACCOUNTING SYSTEM:<br /> 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 <br /> TREASURT OPERATION:<br /> 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.<br />EVALUTION OF FINAL ACCOUNTS OF THE ORGANIZATION:-<br /> 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<br /> RATIO ANALYSIS<br />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.<br />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.<br />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.<br />Assumption of Ratio Analysis:-<br /><ul><li>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.</li></ul>Importance of Ratio Analysis: <br />The Important of the Ratio Analysis can be stated as follows: <br /> Liquid Position: <br /> 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. <br />2. Long term Solvency: <br /> The long-term solvency is measured by the leverage/capital structure & profitability ratios, which focus on earning power & operating. <br /> <br />3. Operating activity<br /> 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. <br />4. Overall Profitability: <br /> 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.<br />5. Trend Analysis: <br />Ratio Analysis enables a firm to consider the time dimension. <br />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. <br />Limitation of Ratio Analysis:-<br /><ul><li>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</li></ul>TYPES OF RATIO<br /> 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. <br />A. Liquidity Ratios <br />B. Leverage Ratio <br />C. Turnover Ratio <br />D. Profitability Ratio <br />A. Liquidity Ratios:- <br /> 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. <br />Some important liquidity ratios are: <br />a) Current Ratio <br />b) Acid-test ratio <br />c) Cash Ratio <br />B. Leverage Ratios:- <br /> 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- <br />1) Periodic payment of interest during the periods of the loan & advances.<br />2) Repayment of principal on maturity or in pre-determined Installments at due-date. <br />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; <br />1. Debt-equity ratio<br />2. Debt- assets ratio <br />3. Owner's ratio <br /> The second type of Capital structure ratio popularly called coverage ratios, are calculated from the Profit & loss account include the following. <br /> Interest coverage ratio, Dividend Coverage ratio, Total fixed changes coverage ratio, Cash flow Coverage ratio, Debt service coverage ratio. <br />C. Turnover Ratios:- <br /> 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. <br /> 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:<br />1) Inventory turnover Ratio 2) Debtors turnover Ratio 3) Average collection period 4) Creditors turnover Ratio 5) Fixed Assets Ratio 6) Total Assets Ratio <br />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<br />Welcomes you to go through<br /> <br /><ul><li>INTRODUCTION </li></ul> <br /> <br />PERSONNEL DEPARTMENT<br />INTRODUCTION:-<br />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 <br />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.<br />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 <br /> <br />Labor relation:-<br />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.<br /> 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. <br /> Human Resource Department:-<br />“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. <br />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.<br /> 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:<br /><ul><li>Research and storage data.
Compensation and reward</li></ul>Welcomes you to go through<br /> PRODUCTION DEPARTMENT:-<br /> 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. <br />Production process:-<br /> <br />In the firm production of tablets in the particulars way in the following:-<br /><ul><li>Granulation
Labeling</li></ul>In granulation there are 2 methods are available like:-<br /><ul><li>Wet granulation
Direct compression methods</li></ul>Wet granulation method:-<br />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.<br /> <br />Direct compression method:- <br /> 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. <br /> <br />Punching compression process:-<br /> <br />This process is undertaken to covert powder or granulation prepared sized weight shape and character of tablets.<br /> Than the parameter for the tablet to be punched are set<br /><ul><li>Weight of the tablet as required or specified in batch mfg. record
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.
Blister packing</li></ul> <br /><ul><li>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.
Strip packing :-</li></ul>Pack size 100 tablets 1000 tablets. A) Aluminum) classiness. Poly paper glassine ploys paper foil.<br />Allopathic human and veterinary.<br /><ul><li>Blister packing :-
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
To make dept. have quality conscious </li></ul>As it is pharmaceutical company of product is very important. In this company there two method s are used is as follows:<br /><ul><li>Acceptance Sampling
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.
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.
</li></ul>INTRODUCTION TO THE WORKING CAPITAL.<br />CONCEPT OF WORKING CAPITAL:-<br />There are two concept of working capital<br /><ul><li>Gross working capital
Net working capital</li></ul>GROSS WORKING CAPITAL:-<br />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<br />NET WORKING CAPITAL:-<br />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.<br />In summary of it may be emphasis that both gross and net concept working capital are equaled important for efficient management of working capital.<br /><ul><li>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 efficiency</li></ul>In adequate working capital is also bad has the following effects:-<br /><ul><li>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.</li></ul>Concept of operating cycle:-<br />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.<br />Operating cycle is the time duration required to convert sales after the conversation of resources into inventories into cash. <br /> <br />The title of operating cycle is more expensiveness in the senses<br /> 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<br />Operating of Treffer pharmaceuticals ltd.:-<br /><ul><li>Conversation of cash into raw- material
Conversation of raw material into work in progress
Conversation of debtors into cash</li></ul> <br /> MEASURING WORKING CAPITAL REQURIEMENT:- <br />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.<br />The inventory conversation period is the total time needed for planning and selling the product typically it includes: <br /><ul><li>Rae material conversation period
Creditors conversation period</li></ul> <br />CHANGES IN WORKING CAPITAL<br />INTRODUCTION:<br />There are two types of capital needed<br />1.Fixed Capital<br />2.Working Capital<br />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. <br />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”.<br />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.<br />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”.<br />STATEMENT OF CHANGES IN WORKING CAPITAL OF YEAR 2007-08:<br />Particular2006-072007-08Increase in working capital Decrease in working capitalCurrent AssetsInventory37519654569613817648Debtors77799818264969484988Cash & Bank03059090725081419172Loans & Advances02753630450791175428Other Current Assets03533600722618369258Total Current Assets1246657814733072-Current Liabilities62787076519592-240885Creditors ---Provision---Total Current Liabilities62787076519592-Net working Capital61878718213480-Changes in Working Capital 2025609--2025609Total 8213480821348022664942266494<br />STATEMENT OF CHANGES IN WORKING CAPIAL OF A YEAR 2008-09<br />Particular2007-082008-09Increase in working capital Decrease in working capitalCurrent AssetsInventory404160093244935282893Debtors109639209214892Cash & Bank17541122030304 276192Loans & Advances494447833549339102Other Current Assets--Total Current Assets1725407921403238Current LiabilitiesCreditors 54810427448047Provision3261213261216410Total Current Liabilities77741687774168Net working Capital1144050613629070Changes in Working Capital 2188564-2188564Total 136290701362907059045975904597<br />CONCLUSION:- <br />By analyzing the data of the firm regarding in working capital we find as follows.<br />In the year 2006-07, 2007-08the working capital is increased by 2025609.<br />In the 2007-08, 2008-09 the working capital is decreased by2188564.<br />It shows fluctuation changes in below<br />YEARCHANGES IN WORKING CAPITAL2005-062025609 Increased2006-072188564 decreased<br /> <br />Statement of cost of sales:-<br />Particular 2005-062006-072007-08Opening stock of raw material201129432057632846035+purchase 15720078230572115880343-closing stock of raw material257556928460344607330Raw material consumed151558032339545014119048+Manufacture exp.2428941457499582897343+depreciation 60576015122111485412+operating exp.189909529523093011797Administration exp198658044457081743372Prime cost2207617937057436232557154+ opening stock of WIP 0199000192296-Closing stock of WIP 0 1922961164378Cost of production 220761793706414022285072+ Opening stock of finished goods 1127329603845975136-Closing stock of finished goods 16590499751363503715Cost of goods sold215444593669284919756493<br /> CONVERSATION PERIOD OF OPERATING CYCLE:-<br />Raw material conversation period:<br /> <br />Raw material conversation period: - <br />Raw Material inventory<br />--------------------------------- ×300<br />Raw Material consumption <br />YEARRAW MATERIAL INVENTORYRAW MANTERIAL CONSUMEDRAW MAT.CONSERVATION PERIOD2006-07146730210490236422007-08133838023395450172008-0915822971411904834<br />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. <br />Work in process conversation period:-<br />Work in process inventory<br />------------------------------------ ×300<br />Cost of production <br /> <br />YearWIPInventoryCost of productionWIP conversation period 2006-071990001670163642007-081922963706414022008-0911643782228507216<br />Conclusion: - from the calculation of turnover and storage period finished goods inventory shows marginal fluctuation. In the year <br />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. <br />Debtor’s conversation period: - <br />Debtors/Credit purchase×300<br />YearDebtorsCredit sales Debtors conversation period 2006-07678919919766921032007-081096392042733578772008-092377185723771857116<br /> <br />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.<br />Creditor’s conversation period: - <br />Creditors/ credit purchase ×300<br />YearCreditorsCreditors purchaseCreditor’s conversation. period2006-0748908831489374982007-08548104229135268562008-0974480473113406272<br /> <br /> <br />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.<br /> <br /> <br />RATIO ANALYSIS<br />CURRENT RATIO:-<br />CURRENT ASSETS/CURRENT LIABLITIES<br />YEARCURRENTASSETSCURRENT LIBALITIES2006-071229067950073312007-081725407958135732008-09214032385813573<br /> CURRENT RATIO:-<br />YearCurrent Ratio2006-072.46:12007-082.97:12008-092.75:1<br />Conclusion:-<br />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.<br /><ul><li>4. ACID TEST RATIO:-
ACID TEST RATIO:=Quick assets/ current liability
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.</li></ul> <br /><ul><li>3 .Cash ratio:-
YearCash & bank bal.Current liabilities2006-07794941750073312007-08175411258135732008-0920303047774168</li></ul> <br />YearCash Ratio2006-070.10:12007-080.30:12008-090.26:1<br /> <br />Conclusion:<br />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.<br />GROSS PROFIT RATIO:-<br /> <br />GROSS PROFIT:-<br />GROSS PROFIT /SALES×100<br />YEARGROSS PROFITNET SALES2006-072030087197869272007-086040729427335782008-09601536423771857<br />YEARGROSS PROFIT 2006-0710.26%2007-0814.14%2008-0925.30%<br />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. <br /> <br />NET PROFIT RATIO<br />NET PROFIT:-=NET PROFIT <br /> ------------------×100 <br /> SALES <br />YEARNET PROFIT NET SALES 2006-07246879197869572007-081714366427335782008-0940006423771857<br />YearNet profit ratio2006-071.25%2007-084.01%2008-091.68%<br />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.<br /> <br /> <br />RESEARCH ON THE WORKING CXAPITAL OF THE PHARMACEUCTICALS<br />INTRODUCTION ABOUT THE RESEARCH METHODOLOGY<br />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.<br />OBJECTIVES OF THE RESERCH STUDIES:<br /> Research also help in the find out the main aspect of the studies<br />It also help in the detail studies so that we can easily analysis, <br />Research studies it also solve the complex problem which related to any of the studies of any sector analysis.<br />Research is also help to student and many scientist to find the new technology for the new innovation<br />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.<br />LIMITATION OF THE RESERCH STUDIES:<br /><ul><li>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</li></ul> <br />DATA COLLECTION <br />THERE ARE TWO METHODS OF DATA COLLECTION FROM WHICH WE CAN COLLECT FOR THE RESERCH PURPOSE:<br />1. PRIMARY DATA COLLECTION <br />2. SECONDARY DAT COLLECTION<br /> <br /><ul><li>Primary data collection :-</li></ul> There are no primary data<br /><ul><li>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. </li></ul> In above the project the data collected for the secondary data sources is to be collected from the magazine and other business magazines. <br /> SAMPLING:<br />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.<br />In this project the various sample are collected from the company’s financial data of the last 3 years <br />Sample of the B TEX AND TREFFER PHARMA COMPANIES<br /> On the ratio if the newt profit<br /> <br />YEARNET PROFIT OF B-TEX PHARMA.NET PROFIT OF TREFFER PHARMACEUCTICALSNE PROFIT ANANLYSIS (%)2006-072007-082008-09<br />Sampling design:<br /> 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 <br />There are so various design methods. <br />Sample universe:<br /> 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. <br /> <br />Sample unit: <br />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.<br />E.g. a required a working capital <br />YearB -texTreffer Analysis 2006-072000000150000001.33%2007-081500000100000001.50%2008-09100000050000000.20%<br />Sample size:<br /> 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. <br />YearNet profit Gross profit Treffer and B-tex Analysis 2007-084.01%5.01%00.5%2008-091.08%2.68%0.108%<br /> <br />Sampling steps:- <br />Sampling collected<br />Sampling analysis<br />Sampling selected<br />Use for the research<br />Research analysis:-<br />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. <br /> 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. <br /> <br />Findings:-<br />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. <br />OBJECTIVES OF THE STUDY:<br /><ul><li>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. </li></ul>LIMITATION OF THE STYDY:<br /><ul><li>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</li></ul> <br />Sampling instrument<br /> <br />There is no any instrument to use for this report<br />Conclusion:<br /> <br />It was a pleasurable experience to undergo summer training in pharmaceuticals. The atmosphere polite and very helpful. <br /> <br /> 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.<br /> <br />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.<br /> At last wish a bright success to the company.<br /> <br /> ANNEXURE<br /> <br /> M/s TREFFER PHARMACEUCTICALS<br /> C-23 Udhyog nagar,<br /> Navsari-396445<br /> BALANCE SHEET AS ON 31STMARCH 2009<br />Previous year (RS)Capital and liabilities Current year.(RS)10601509.29Partner’s capital accounts11617159.259335022.01Reserved & surplus funds 10385378.48loan fund2056548.00(A) Secured loan –BOB1314634.26(B)Bank of Baroda7991349.39(C) Unsecured Loan 9181335.39Current liabilities-Sundry creditors9567355.73-Provision 354232.6538869703.00 Total43586556.98Previous year (RS) ASSETSCurrent year.(RS)17466464.63Fixed Assets18279419.97Current Assets,Loan&Advances9324492.65-Inventory10462341.309214891.89-Sundry debtors10246774.442030304.45-Cash &bank Balance2836842.27833549.38-loan , Advances & Deposit 1761179.0038869703.00 TOTAL1761179.00<br /> BIBLIOGRAPHY<br />BOOKS:<br /><ul><li> Donald R. Cooper Pamela S Schindler business research methods 8th edition 2004.