Asfa Report by Vivek Aghera

A Summer project

On

“Analysis of Four Departments of

ASFA

Company”

For the partial completion of graduation degree in

BBA

From

Shri S V Patel College of Computer Science and

Business Management,

Veer Narmad South Gujarat University

Submitted by: Aghera Vivek P.

Submitted to: In charge Principal

S.V.PATEL COLLEGE OF COMPUTER SCIENCE AND BUSINESS MANAGEMENT

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Chintu sir Ms. Hetal Patel

DECLARATION

I, Mr. Vivek Aghera P., hereby declare that the project work entitled

“Analysis of Four Departments of Shri Swami Atmanand

Saraswati Ayurvedic Co-operative Pharmacy Ltd.” submitted to

Shri S. V. Patel College of Computer Science and Business

Management affiliated to Veer Narmad South Gujarat

University, is a record of an original work done by me under the

guidance of Chintu sir. This project work has been performed for

the partial completion of graduation degree in BBA.

Sign: ______________

(Vivek Aghera)


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ACKNOWLEDGEMENT

I owe sincere thanks to a great many people who helped and

supported me during the Project work. My deepest thanks to Lecturer, Chintu

sir the Guide of the

project for guiding and correcting various documents of mine with attention

and care. She has taken pain to go through the project and make necessary

correction as and when needed. I express my thanks to the Principal Ms.

Hetal Patel honourable Director Shri G. K. Ruwala of, Shri S. V. Patel

College of Computer Science and Business Management, for extending

her support. My deep sense of gratitude to Bipin Kasvada (Assistant

Production Manager),

Shri Swami Atmanand Saraswati Ayurvedic Co-operative Pharmacy Ltd.

for support and guidance. Thanks and appreciation to the helpful people at

Shri Swami Atmanand Saraswati Ayurvedic Co-operative Pharmacy Ltd.,

for their support.

Sign : ______________

(Vivek Aghera)


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EXECUTIVE SUMMERY

The Asfa Pharmacy completed 60 years. During these periods Pharmacy

achieve many progressive stages. This Pharmacy has a head office and other

five branches. At this way its branches are spreading in different area of all

Gujarat state.

From the study of last 2 years Pharmacy’s financial report, we can say that

rate of progress of Pharmacy is very good. Asfa is co-operative pharmacy and

since its establishment it is never done loss but Asfa sale its medicines at low

price so that its profit is less compare to other Pharmacies. Pharmacy’s Sales

and Profit is decrease in current year to compare past years.

For the duration of our training in Asfa, we found that the workers and

managerial staff are good and the management of all departments is efficient.

Workers are fully satisfied with their work. This Pharmacy’s aim is not only do

profit but also work for employee welfare and societal welfare.


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Profile of the company &industry

THE HISTORY OF AYURVEDA

Ayurveda, the science of life, prevention and longevity is the oldest and most

holistic medical system available on the planet today. It was placed in written

form over 5,000 years ago in India, it was said to be a world medicine dealing

with both body and the spirit. Before the advent of writing, the ancient wisdom

of this healing system was a part of the spiritual tradition of the Sanatana

Dharma (Universal Religion), or Vedic Religion. VedaVyasa, the famous

sage, shaktavesha avatar of Vishnu, put into writing the complete knowledge

of Ayurveda, along with the more directly spiritual insights of self realization

into a body of scriptural literature called the Vedas and the Vedic literatures.

There are two main re-organizers of Ayurveda whose works are still existing

in tact today - Charak and Sushrut. The third major treatise is called the

Ashtanga Hridaya, which is a concise version of the works of Charak and

Sushrut. Thus the three main Ayurvedic texts that are still used today are the

Charak Samhita (compilation of the oldest book Atreya Samhita), Sushrut

Samhita and the Ashtangha Hridaya Samhita. These books are believed to be

over 1,200 years old. It is because these texts still contain the original and

complete knowledge of this Ayurvedic world medicine, that Ayurveda is known

today as the only complete medical system still in existence. Other forms of

medicine from various cultures, although parallel are missing parts of the

original information.


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INTRODUCTION OF AYURVEDA

Ayurveda is a holistic system of medicine from India that uses a constitutional

model. Its aim is to provide guidance regarding food and lifestyle so that

healthy people can stay healthy and folks with health challenges can improve

their health.

There are several aspects to Ayurveda that are quite unique:

Its recommendations will often be different for each person regarding which

foods and which lifestyle they should follow in order to be completely healthy.

This is due to its use of a constitutional model.

Everything in Ayurveda is validated by observation, inquiry, direct

examination and knowledge derived from the ancient texts.

It understands that there are energetic forces that influence nature and

human beings. These forces are called the Tridoshas.

Because Ayurveda sees a strong connection between the mind and the

body, a huge amount of information is available regarding this relationship.

Theory of Tridosha

Ayurvedic practitioners take into consideration the body constitution of a

patient before prescribing any medicine, for the medicine, which suits a vatiya

(vata) constitution, will not help a patient having shleshmic (kapha)

constitution.

Tridosha – its types and correlation with Panchmahabhoota

VATA

Organ in which situated Dominant Mahabhoota

Prana Murdha (palate) jala

Samana Koshtha (stomach) Agni

Vyana Sarva sharer (whole body) vayu


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Apana Muladhara (genitourinary tract) prithvi

Udana Urh Pradesh (chest) akasha

PITTA

Aalochak Netra (eye) Agni

Sadhak Hridaya (heart) aakash

Pachak Koshtha (stomach) prithvi

Ranjak Yakrit, pleeha (liver, spleen) jala

Bhrajak Tvak (skin) vayu

KAPHA

Bodhak Jivha (tongue) Agni

Kledak Amashaya (stomach) jala

Avlambak Hridaya (heart) prithvi

Tarpak Indriya (sense organs) akasha

Shleshak Sandhi (joints) vayu

Principal of Ayurveda

According to ayurvedic philosophy an individual bundle of `spirit’, desirous of

expressing itself, uses subjective consciousness or Satwa to manifest sense

organs and a mind. Spirit and mind then project themselves into a physical

body, created from the five (Pancha) great (maha) eternal elements (bhutas)

– together called the Panchamahabhutas – which arise from Tamas. The

sense organs then using Rajas to project from the body into the external

world to experience their objects. The body becoming the mind’s vehicle, its

physical instrument for sense gratification.

The Bhutas combine into "Tridoshas" or bioenergetics forces that govern

and determine our health or physical condition. While the three gunas (Rajas

or activity, Tamas or inertia and Satwa, which balances the first two) or

psychic forces determine our mental and spiritual health. Ayurveda is thus a

holistic system of health care that teaches us to balance these energies in

order to achieve optimum health and well being


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The Panchamahabhutas

Akash Vayu Agni Prithvi Jal

According to Ayurveda everything in life is composed of the

Panchamahabhutas – Akash (Space), Vayu (Air), Jal (Water), Agni (Fire)

and Prithvi (Earth). Omnipresent, they are mixed in an infinite variety of

relative proportions such that each form of matter is distinctly unique.

Although each element has a range of attributes, only some get evident in

particular situations. Constantly changing and interacting with each other, they

create a situation of dynamic flux that keeps the world going.

Within a simple, single living cell for example the earth element predominates

by giving structure to the cell. The water element is present in the cytoplasm

or the liquid within the cell membrane. The fire element regulates the

metabolic processes regulating the cell. While the air element predominates

the gases therein. The space occupied by the cell denoting the last of the

elements.

In the case of a complex, multi-cellular organism as a human being for

instance, akash corresponds to spaces within the body (mouth, nostrils,

abdomen etc.); vayu denotes the movement (essentially muscular); agni

controls the functioning of enzymes (intelligence, digestive system,

metabolism); jal is in all body fluids (as plasma, saliva, digestive juices); and

prithvi manifests itself in the solid structure of the body (bones, teeth, flesh,

hair et al).


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THE AYURVEDIC MEDICINE INDUSTRY IN

INDIA

Ayurvedic medicines are produced by several thousand companies in India,

but most of them are quite small, including numerous neighborhood

pharmacies that compound ingredients to make their own remedies. It is

estimated that the total value of products from the entire Ayurvedic production

in India is on the order of one billion dollars (U.S.). The industry has been

dominated by less than a dozen major companies for decades, joined recently

by a few others that have followed their lead, so that there are today 30

companies doing a million dollars or more per year in business to meet the

growing demand for Ayurvedic medicine. The products of these companies

are included within the broad category of "fast moving consumer goods"

(FMCG; which mainly involves foods, beverages, toiletries, cigarettes, etc.).

Most of the larger Ayurvedic medicine suppliers provide materials other than

Ayurvedic internal medicines, particularly in the areas of foods and toiletries

(soap, toothpaste, shampoo, etc.), where there may be some overlap with

Ayurveda, such as having traditional herbal ingredients in the composition of

toiletries.

The key suppliers in Ayurveda are Dabur, Baidyanath, and Zandu,

which together have about 85% of India's domestic market. These and a

handful of other companies are mentioned repeatedly by various writers about

the Ayurvedic business in India; a brief description is provided for them,

arranged here from oldest to newest.


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STATUS OF AYURVEDA IN INDIA

The Indian government and non-government organizations have been

collecting statistics on the Ayurvedic system in India and these data about the

manpower and institutional aspects of Ayurveda have emerged:

Number of registered medical practitioners: 366,812

Number of dispensaries: 22,100

Number of hospitals: 2,189

Number of hospital beds: 33,145

Number of teaching institutions (undergraduate): 187

Number of upgraded postgraduate departments: 51

Number of specialties in postgraduate medical training: 16

Number of pharmacies manufacturing Ayurvedic medicines: 8,400

In India, 60% of registered physicians are involved in non-allopathic

systems of medicine. In addition to the nearly 400,000 Ayurvedic practitioners,

there are over 170,000 homeopathic physicians; India has about 500,000

medical doctors (similar to the number in the U.S., but serving nearly 4 times

as many people). Reliance on Ayurvedic medicine is heavy in certain regions

of India, such as Kerala in the Southwest. Many Ayurvedic practitioners in

small villages are not registered. One of the famous clinics of India is

described in Appendix 2 and a new clinic complex is serving visitors from

abroad is mentioned in Appendix 3.


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HISTORY AND INTRODUCTION OF ASFA

Once in a golden morning Shri Swami Atmanand Sarswati comes in Surat

and he stat to give knowledge of culture/ religion and ayurveda by his lectures

at every place of Surat city. He set up Tapi Brahmcharya Ashram at the land

which was donated to in at the bank of river Tapi. In Ashram many student

study about Ayurveda and Sanskrit. And with passes of time he started an

ayurvedic clinic and a Pharmacy for medicines needed to run clinic. And

slowly with flow of time the promotion and expansion, the small Pharmacy

become only one co-operative ayurvedic pharmacy of Gujarat which is

established in 2nd June, 1949 with name Shri Swami Atmanand Sarswati Co-

operative Pharmacy Limited which is known as its short name “Asfa”.

“Asfa” (Shri Swami Atmanand Sarswati Ayurvedic Co-operative Pharmacy

Limited) is established in 1948 in Surat at the bank of river Tapi. It is an only

one co-operative pharmaceutical pharmacy in Gujarat. Shri Swami Atmanand

Sarswati who was the man with strong mind power established the Pharmacy.

Shri Swami Atmanand Sarswati was spent his whole life in survive of people

and teach Ayurved to his Shishyas. He had only one goal of his whole life as

follows:

“I don’t desire state, I don’t desire paradise, I even don’t desire moksh,

but I desire to solve the problems of people who are suffering from the

dieses by way of using Ayurvedic treatment.”

Asfa has its head office at chowta pool and it has a factory at Varachha road

in Surat. Asfa also expanded its production capacity and established one

more factory at Navagam. Asfa has about 4000 members now but when it

was started it has only 70 members to operate various activities.

By showing the above mentioned figure we can say that Asfa is very rapidly

grow and expand in whole Gujarat. It has opened branches at Valsad,


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Baroda, Ahemdabad, Bardoli and Bharuch etc. It has also work as a

consulting in Valsad and Surat. It established a consulting clinic in Valsad

where the information about various ayurvedic medicines is provided to

people without taking any pay.

Asfa sold its product in most of cities of Gujarat and Mumbai through its

dealers. Asfa has widely distributed dealer network. Asfa produce qualitative

product, by reason of that a slogan “Aushadho to Asfa nij”.

Asfa get a certificate of GMP (Good Manufacturing Practice) from Gujarat

state food and medicine Control Corporation. Asfa is a first Pharmacy which is

gets this type of certificate. Asfa get GMP certificate in 2004 and also get ISO

9001 in 2005 and laboratory of Asfa get permission from food and medicines

commissioner’s office, Gandhinagar.


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BOARD OF DERECTORS OF ASFA

1. Dr. Navinbhai B. Patel President

2. Shri Ramanlal P. Patel Wise President

3. Dr. Purushotambhai P. Mistri Minister

4. Dr. Kanubhai G. Mavani Director

5. Dr. Chhotubhai L. Patel Director

6. Dr. Tarunkumar M. Pathak Director

7. Dr. Abhaybhai R. Shah Director

8. Shri Sanmukhbhai J. Patel Director

9. Shri Ranchhodbhai K. Patel Director

10. Dr. Bankimchandra R. Thakar Director

11. Dr. Vasantrai M. Desai Director

12. Shri Jagdishbhai P. Patel Director

13. Shri Arvindbhai M. Patel Director

14. Dr. Pradipbhai J. Suryavanshi Director

15. Dr. Iswarbhai K. Patel Director


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LIST OF DEALERS

There are 79 dealers of Asfa in whole Gujarat. Here represent only name

of cities in which Asfa has dealers.

The cities are Ankleshwer(6) Rajkot(3)

Ahemadabad(9) Rajpipala(2)

Amod(1) Surendranagar(2)

Mahuva(1) Vyara(2)

Bharuch(2) Vapi(1)

Bilimora(4) Vadodara(4)

Bardoli(2) Viramgam(1)

Chikhali(2) Vidhyanagar(2)

Godhara(2)

Gandevi(1)

Gandhinagar(2)

Junagarh(2)

Kathor(1)

Kapadvanj(1)

Kamrej(1)


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kilapadi(1)

Mumbai(3)

Mandavi(1)

Amran(1)

Navasari(4)

Porbandar(1)

Surat(14)


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Location of Factory and Branches

Factory of Asfa

1. Near Panini taki,

Varachha road,

Surat-395006

Phone no. (0261-648092, 644410)

2. 17, 18, Navagam Udhyognagar Co-operative Sangh

Navagam,

District: Kamrej,

Surat,

Phone no: (02621-252440)

Branches:

1. Near Bank of Baroda,

Chouta pool,

Surat,

Phone no: 0261-426413

2. Ayurvedic Hospital Compound,

Station road,

Surat.

3. Dhanasutar Ni Poll,

Relief road,

Ahemadabad.

4. Balavant Building,

Kharivav road,

Baroda.


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5. 8, Navrang Shopping Center,

Panch Bati,

Bharuch.

6. 3,Amar Chambers,

Near the lal school,

Valsad.

7. Hirachand Nagar,

Station road,

Bardoly.


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BOARD OF DIRECTORS

CHAIRMAN

VICE PRESEDENT

SECRETORY

GENERAL MANAGER

PRODUCTION DEPARTMENT

ADMINISTRATION DEPT.

ASSISTANT PRO. MANAGER

SUPERVISOR

WORKERS

ACCOUNTANT

CASHIER

SENIOR CLERK

RAW MATERIALDEPARTMENT

SALES DEPARTMENT

ORGANIZATION STRUCTURE OF ASFA

COMPANY


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FUTURE PLAN OF ASFA

This company is only limited in Gujarat but now it went to expand there

business and introduce its product in new state.

To increase the quality of their product

Change packaging style and use new and attractive style of packaging

Use modern technique of production and expand their capacity

Introduce cosmetics product of Asfa in the market


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Marketing Department


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INTRODUCTION

Market: -

The common usage of market means a place where goods are bought or

sold. In its strict meaning market need not necessarily mean a place of

exchange.

Marketing: -

Marketing is concerned with selling but now a day the concept has enlarged

its meaning. We know that a product is provided with the aim of sale. The aim

producer totally depends on marketing. Without marketing no unit can run. It

covers marketing research, new product development and so many other

important functions.

“Marketing is the process of discovering and translating consumer needs and

wants into product and service specifications, creating demand for these

products and services and then in turn expanding this demand.”

Marketing Environment

Asfa is a co-operative pharmacy working with the objective of survives people.

Asfa produces ayurvedic medicines. Asfa produces more than 288 types of


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products which other companies do not produce. Asfa sales its product in

Gujarat and other nearer states and there is no other companies with so large

production in Gujarat but than also Asfa have competition from the national

and international companies like Zandu, Himalaya, Dabur, Baidyanath,

Charak etc. and also from state level companies like Puja pharmacy, Gujarat

Ayurved Vikas Mandal, Ban pharmacy etc.

The key suppliers in Ayurveda are Dabur, Baidyanath, and Zandu, which

together have about 85% of India's domestic market. Dabur India Ltd. (1884)

is India's largest Ayurvedic medicine supplier and the fourth largest producer

of FMCG. Zandu (1919) focuses preliminary on ayurvedic medicines but it

produce chemical and cosmetic products also. Himalaya is established in

1939 in Bangalore and has business about 500 million dollar. Vicco (1958)

produces topical therapies based on Ayurveda and is best known

internationally for its toothpaste product.

Asfa has main competition from Baidyanath and Charak. Sri Baidyanath

Ayurvedic Bhawan Ltd. was founded in 1917 in Calcutta, and specializes in

Ayurvedic medicines. The company reports having over 700 Ayurvedic

products, made at 10 manufacturing centers, with 1,600 employees. Charak

Pharmaceuticals was founded in 1947, and currently has three distribution

centers in India; it produces liquids, tablets, and veterinary supplies.

COMPARISON OF 4PS OF VARIOUS PRODUCTS OF

ASFA WITH COMPATITORS


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http://www.charak.com/index.asp

http://www.charak.com/index.asp

http://www.baidyanath.com/

http://www.baidyanath.com/

http://www.dabur.com/EN/Home/Home.asp

Marketing mix is the policy adopted by the manufacturers to get success in

the field of marketing. Those days, when goods were matched with the market

have gone. Marketing mix is the term used to describe the combination of 4

inputs which constitute the core of company’s marketing system the product,

the price structure, the promotional activities and the distribution (place)

system. These are popularly known as, “4ps”.

A brief description of four elements of marketing mix of Asfa is:

Product

A product is any thing that can be offered to a market that might satisfy a want

or need. Asfa produce 288 medicines for its customer. Other companies do

not have so large range of product width and length. Asfa use rarely found

able herbs in its medicines which make difference from competitors. Asfa

produce more qualitative products than the competitors. Asfa also research

and produce new medicines and patent them. Such medicines like Asfa

haemetone, Reducid, Asfalax, Gasowin, Asfa-tone.

Price

The marked or announced amount of money asked from a buyer is known as

basic price of a product. Asfa use value pricing method for its products. In this


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Promotion

Place

Price

Product

Marketing mix

method, Asfa charging fairly low price for highly qualitative product, which

its competitor can not done. Asfa charged low price than its competitors

because Asfa less expense in promotional activity and for distribution. Asfa

charged low price because it is co-operative pharmacy and its main objective

is provide medicines at fair price, not to earn profit.

Promotion

Marketing communication consist of communication marketing activities

through various forms of promotion that is personal selling, advertising,

publicity and public relationship, sales promotion etc. together called

promotion mix. Asfa does not do more expenditure for promotional activities

like other companies. Asfa do zero level marketing than also Asfa easily

sale its medicine and its dealer largely expand in all Gujarat.

Place

Place means the decision by which company transfers their product, location,

inventory handling, warehousing, storage facility, transportation etc. Asfa has

a big location for plant at bank of river tapi. Asfa is located near the nation

high way so it can transport and get material easily. Asfa has own retail

store in various cities so it can easily provide medicines to customers than its

competitors. Competitors like Pooja, Zandu, Himalaya, Dabour etc. have not

so widely develop distribution network in Gujarat.

IDUSTRIAL BUYING BEHAVIOUR


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The industrial or organization buyer decision making is a follow stage process.

Asfa use this process are as under.

1) Problem Recognition: the buying process begins with recognition

with recognition of a problem or need. Something is needed that can be

met by procurement of a product spare parts, material or plant and

machinery or service. Externally, trade show or exhibition, Advertisement

calls from sales representative may provide stimuli for need recognition.

Asfa use internally and externally may provide stimuli for recognition

2) General need description and product specification: the

asfa determine the needed item general characteristics and required

quantity. For standard items this is simple. For complex items the asfa

will work with other engineers, user to define characteristics such as

reliability, durability or price.

the asfa organization now develops the item technical specifications.

Often the company will assign a product value analysis (PVA)

engineering team to project. PVA is the cost reduction approach by

redesigning the component or by standardizing them.

3) Search supplier: the asfa tries to search out supplier. Main source of

the search vendor are trade directories internet trade advertisement visit

industrial exhibition, phone to other company for recommendations. from

various soures of buyer trues to identified the most appropriate from only

a few prequalified vendors.

4) Proposal solicitation and selection: the asfa next invites

qualified supplier to submit proposals. If the item is complex or

expensive the buyer will require a detailed written proposal from each

qualified supplier.

Before selecting a supplier the buying center will specified desire

supplier attributes and indicate threre relative importance. To rate and


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identified the most attractive supplier buying centers often use a supplier

evaluation model.

5) Order routine specification: after selecting supplier the asfa

negotiates the final order listing the technical specification the quantity

needed the expected time of delivery return policy warranties and so on.

6) Performance review: the asfa periodically review the performance

of the supplier.

Product Mix


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HIGH B.P. LOW B.P. HIGH SUGAR

Akika Bhasma Sanjivani gutika Chandraprabhavati200,500,1000gm Available in 100,250,500gmTrifka tablet Yashad Bhasma

Available in 100,300,1000gm

Width of the product mixWidth of the product mix

Depth of the product

Depth of the product linenes

linenes

Product mix means,”The set of product offered for sale by a firm or a business

unit is known as a product mix”.

ASFA COMPANY PRODUCT MIX

Asfa Company produces 288 no of product. But some no of product I include

in diagram.


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There are three important aspect of product mix (1) width, (2) depth, (3)

consistency.

(1) Width of the product mix is concerned with the number of product lines

marketed by the company.

(2) The depth of the product mix depends on the average number of

product items included in the product lines.

(3) The consistency of the product mix indicates how far or to what extent

the product lines are interconnected with each other from the view

point of their final use or production requirements or channel of

distribution.

Packaging & labeling

(1) Packaging – packaging is meant for the protection and maintenance of the

quality of the product. It serves the purpose of container and wrapper;

however, it is the powerful tool of promotion at point of purchase. Attractive

packaging and labeling increases sales without spending much on

advertisement

Asfa company produce 288 types of product and use the 288 types of

packaging. Overall 6 types of machine available at Asfa for packaging.

(2) Labeling – labeling is connected with brand and packaging. Label is a strip

on the container or packaging on which certain instruction.

Asfa company give instruction to consumer that how use the product and

price of the product, date of the manufacturing etc.


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Pricing strategies

The marked or announced amount of money asked from a buyer is known as

basic price-value placed on a product. Price is the one element of the

marketing mix that produces revenue. Prices are the easiest marketing mix

element to adjust; product features, channels, and even promotion take more

time.

There can be competition between price-quality segments. The below

diagram shows nine price-quality strategies.

PRICE

High Medium Low

Q High 1. Premium 2. High-value 3. Super-value

U strategy strategy strategy

A 4. Overcharging 5. Medium-value 6. Good-value

L Medium strategy strategy strategy

I

T 7. Rip-off 8. False economy 9. Economy

Y Low strategy strategy strategy

Asfa has super-value strategy for its products. Asfa provides medicines at low

price with high quality.

Asfa set price for its products by taking care of the below matters.

Asfa set price with considering its objective of provide medicines at fairly

price with good quality.


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Asfa decides price after the production is over so it estimate cost of

production and other expenditure and divide it by number of products and add

some more for setting price.

Asfa Also considered the price of competitors and try to set less price than

competitors.

DISTRIBUTION NETWORK

Distribution network can be define as a set of interdependent institutions

participating in the marketing activities involved in the flow of goods and

services from manufacturer to customer.

Asfa have well developed distribution network for marketing activities. Asfa

have 78 dealers for selling its medicines. Asfa have own distribution network.

Asfa sell its medicines by own stores and these stores are created in whole

Gujarat state such as in Surat, Ahmedabad, Ankles war, Anand, Navsari,

Vadodara and in many other cities of Gujarat.

Asfa use zero level and one level channel for distribution. Asfa provide

medicines to its retail store as per their requirement and that stores sales

medicines direct to customers so customer get medicines in less price than

competitors. Asfa have also a store at outside the pharmacy from where

anyone can get medicines easily.


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SALES PROCEDURE

The steps of sales procedure of Asfa are as follows.

1. First step is to get raw-material and send in production department for

process.

2. Production department prepare finished product, packed and after

testing send it to dispatch department.

3. Dispatch department receives the order from Asfa’s stores.

4. According to order dispatch department send the medicines to various

store by pharmacy’s own vehicle.

5. Retail stores send the material receipt note.

6. Retail stores are selling that medicines to customers and send the copy

of bills of selling medicines with payment.

7. Asfa receive copy of bills and note in sales documents and collect

payment.


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8. If any dealer or customer has complaint against medicines than Asfa

takes their complaint and take corrective actions for that.

UNIQUE FEATURES OF ASFA’S PRODUCTS

Asfa produce 288 medicines or many other products. Asfa produce medicines

in various categories like asav, aristas, syrups, churns, avlehas etc. and all of

them have different unique features but Asfa products main feature is “Better

Quality in Lower Price”.

We have a variety of asavs and aristas that are prepared on the time

tested principle of ayurveda. Our products in asavs and aristas are of high

medicinal value then that of others.

Asfas syrups are meant for overall growth, stimulated appetite, correct

digestive system and cough & respiration disorders.

Asfa have prepared a variety of churns through constant research and

experiments and that have been highly effective to cure digestive problems,

skin digests, joint pain, cold & cough and many others.

Asfa’s avlehas are prepared from the herbs which rare to found which

wasn’t made by others. These avlehas are costly because of special herbs

are used for it.


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Asfa use some time the ancient recipes for prepare medicines. Asfa have also

patent right of some medicines which are made by scientist of asfas

laboratory.


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Activity of HR department

(1) Legal compliance

(2) Benefits

(3) Union-management relations

(4) Human resource planning

(5) Employee relations

(6) Selection

(7) Training and development

(8) Appraisal

(9) Placement

(10) Motivation


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Recruitment & Selection Process

RECRUITMENT PROCESS OF “ASFA”

In simple term, recruitment is understood as the process of searching for and

obtaining application for jobs, from among whom the right people can be

selected.

According to Edurin B. Flippo, “Recruitment is a process of searching for

prospective employees and stimulating and encouraging them to apply for

jobs in an organization.”

The recruitment process of Asfa pharmacy starts with personal planning of

General Manager. When there is an any sit become vacant or a new

employee is or are require, General Manager first plan how many employees

are require and of what qualification. General Manager decides which type of

people is requiring means which type of skills an employee have need for

recruitment in pharmacy. For example, quality laboratory technician require

qualification B.Sc. (Micro) and DMLT. Managers are requiring qualification of

MBA. So the first step of recruitment process of Asfa pharmacy is set a

standard for recruitment.

The second step is searching for employees. General Manager decides from

where, the employees are recruit and by which source. The middle level of


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employees and workers are mostly recruiting from city or areas which are

near to pharmacy. In source for recruiting, General Manager uses both

internal and external source of recruitment. Manager use internal source such

as:

Relatives of present employee

Promotion and transfer

Former employees

Internal source are use when more employees are required.

Asfa use external sources such as:

Advertisement in news paper

College campus recruitment

Employment exchange

The third step is screening of collected applications. Applications received in

response to advertisement are screened and only eligible applicants are

called for an interview. Here the recruitment process is ends and the selection

process begins.

SOURCES OF RECRUITMENT

Asfa use both internal and external sources which are as follow in detail.

Internal source

Asfa uses internal source when they need more employees in short period of

time.

Relative of present employees

It is important internal source of Asfa. Asfa use this source when it requires

argent employees for production at low cost. A major concern with employee

recommendation is that the referred individuals are likely to be similar in type

to those who are already working for the company.


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Promotion and transfer

This Pharmacy often uses promotion and transfer for vacant sits. This is a

good source of internal recruitment. Promotions to hire positions are

advantigable for pharmacy by various kinds. Another way to recruit from

preset employee is transfer without promotion. Pharmacy uses it when other

branch has required skill and experienced employee.

Former employee

Former employees are also an internal source of applicants. Some retired

employees may be willing to come back to work on part time bases or may

recommend someone would be interested in working for the pharmacy.

External sources

External sources far outnumber the internal methods. Specifically, sources

external to a pharmacy are:

Advertisement

This is the common source of recruitment. All types of organizations are using

it for recruitment. Asfa use most of time this source for recruitment. It gives

advertisement in local and stat level news paper. Asfa take care that

advertisement must be effectively drafted before publishing.

Employment exchange

Employment exchanges have been setup all over the country in difference to

in provisions of the Employment Exchanges Act, 1959. The act requires the

entire industrial establishment to notify the vacancies before they are filled.

Asfa also notify its vacancies and take employees from employment

exchange.

Campus recruitment

Colleges, universities and institutes are fertile ground for recruiters. Asfa also

recruit it employee from colleges and universities campuses. Employee of


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pharmacy go to various B Pharm colleges and meets its principals and

teachers take information about students from them then meet those students

and give job offer to them.

SELECTION

Selection is the process by which candidates for employment are divided into

class- those who will be offered employment and those who will not. Thus, the

selection process is a tool in the hand of the management to differentiate the

qualified and unqualified applicants by applying various techniques such as

interviews, tests.

PROCESS OF SELECTION

Selection process starts when recruitment process ends. The steps of

selection process are as follows.

1. The first of selection process is receipt of applications. Applications are

screened then after and only those are selected whose are matched

with require specifications and attributes.

2. The next step taken by pharmacy is preliminary interview. In this only

general questions are asked and some information about pharmacy

and of job is given to applicants.

3. The third step is selection test. Pharmacy takes written selection test in

which they ask questions on ayurvedic medicines. This test is taken

only for middle level.


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4. For worker and top level test is not taken. They call for interview.

Interview is taken by managers and the applicants who are passed

from this are selected for job.

5. Job is offered to selected applicants by giving appointment later and

information of pharmacy, job and his co-workers.

HUMAN RESOURCE PLANNING PROCESS

Human resource planning as been defining as, “The process by which

management determines how an organization should move from its current

manpower position to its desirable manpower position. Though it

management strive to have the right number and the right kind of people at

the right place, at the right time, doings things which result in both the

organization and the individual receiving, maximum long range profit.”

In Asfa, human resource planning process is done by following steps:

1. Organizations objectives and policies

Human resource plan needs to be based on organizations objectives that

means objective of human resource must be derived from organizations

objectives. Specific requirement in terms of number and characteristics of

employee should be derived from these objectives.

Asfa take care of organization objectives and policies while recruit employees.

Asfa also take care of such questions like whether organization should fill

vacancies by internal promotion or hiring from out side, which type of training

and development pr ogram are needed, what policies are

needed to handle staff unit, how to understand employee job etc.


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2. Human resource demand forecast

Human resource forecasting is the process of estimating the future quality and

quantity of people require. The basis of forecast is annual budget and long

term plans of Asfa, which are translated into activity level for each function

and department. Base on this information the number of hours to be worked

by each skilled man power in a given period of time should be calculated.

Once the hours are available the next logical step is to find out the quantity

and quality of personnel.

The human resource forecasting is done by various techniques like

managerial judgment trend analysis, Delphi method, flow models and work

study method and many others. Asfa use managerial judgment technique for

its human resource forecasting because it is very simple technique. In this

techniques asfa’s managers are sit together, discuss and decide the future

demand for labour.

3. Human resource supply forecast

Personnel demand analysis provides the manager with number and quality of

employee that to be require. Next logical step for manager is to find out the

number of people likely to be available form within and outside of an

organization. The supply forecast covers the existing human resources,

internal source of supply and external source of supply.

Asfa use the analysis of present employee human resource audit summaries,

each employee skill and ability for understanding capability available in

organizations work force. It also forecast the internal source or supply.

Managers are calculating the available supply of manpower within the

organization. Asfa also calculate how many employees are available in

market or outside the organization whose are take responsibilities of job.

4. Human resource programming


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Once, an organizations personnel demand and supply are estimated or

forecasted by the managers, then they take care of the balancing between

them. The balancing is needed in order to fill the vacancies by the right

employees at right time. So human resource programming has greater

important in planning process.

5. Human resource plan implementation

Implementation require converting human resource plan into action, such

human resource plan includes recruitment, selection, placement, training,

development, retraining and redevelopment, Asfa use various plans like

retention plan, down sizing plan and succession plan.

Asfa does not use control and evaluation for human resource planning.

Organizations objectives

And polices

Human resource demand

Forecast

Human resource supply

Forecast

Human resource

Programming


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Human resource plan

Implementation

(Diagram of human resource planning process)

TRAINING AND DEVELOPMENT

Training is a learning process which seeks a relatively permanent change in

behavior that occurs as a result of experience. Training refers only to

instruction in technical and organized operations. Training courses are

typically designed for a short term, stated set purpose.

In Asfa pharmacy, training is given with the objective of increase in

productivity of employees, increase quality of work, enhance and update

knowledge and skills of employees and many others but there is no without

training program in Asfa. Asfa provides training as on job training and give

training to new employee. In pharmacy, training is given to the workers which

are basically at period of one month.

On job training is training is training in which pharmacy and its members are

help and provide guidance, if there is any difficulty in any work. Training is

based on learn and teach and hence, employees will grow with experience.

Development is the process of transition of an employee from a lower level of

ability, skills and knowledge to that of higher level. Pharmacy also run

program of development periodically. Pharmacy tries to develop new skills,

techniques and personality of their employees.


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INDUCTION TRAINING

Induction is the process of receiving and welcoming an employee when he

first joins a company and giving him the basic information which he needs to

settle down quickly and happily and start work. In the pharmacy, induction

training is given to all new joiners in Asfa. Asfa provide induction training with

objective of reduce insecurity, anxiety, exploitation etc. from the mind of new

joiner and he/she can work easily and with skills.

Asfa have formal induction program. All details are providing by pharmacy to

new employee. Asfa’s content of induction program includes the following

matters:

History of Asfa

Objectives of pharmacy

Name and designation of managers

Employee’s designation and responsibility

Layout of pharmacy

Production and other processes of pharmacy

Job duties, location, tasks, objectives etc

Safety steps

Employee benefits such as pays, holidays, welfare activities

Introduction to superiors, coworkers and other staff


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TRAINING NEEDS IDENTIFICATION OF ASFA

Identification of training need is the most important step in designing a training

program. This includes a thorough analysis of entire organization, all

operations and all employees. This required to find out the trouble-spots so

that proper training program can be designed and prescribed to those it is

needed.

Asfa give training to employees, when old machines are replaced by new

machines. Asfa analysis the objective of pharmacy and various departments,

ask questions to employees and if there is any difficulty in achieving goal of

pharmacy then, Asfa give training to its employees.


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PROMOTION

Promotion refers to upward movement of an employee form current job to

another which commands better prestige, higher responsibility and authority,

higher challenges, better working condition, hours of work and higher rank.

Promotion policy of Asfa pharmacy

Promotion policy of Asfa is clear in whether to fill up higher positions by

internal promotions the recruit people from outside.

◊ Asfa give promotion on the basis of both seniority and merits so it can take

advantages of both.

◊ It is clear about policy of promotion is whether to promote employees

against vacancies or non-vacancies.

◊ Asfa establish a well define promotion chart showing who can go up to what

level in the pharmacy.

◊ Asfa give promotion to any employee only one in a year.


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◊ The promotion policy is prepared by discussion with managers and other

staff.

◊ Promotion is not be forced on reluctant employees.

DEMOTION

Demotion implies the assignment of an employee to a job of lower rank with

lower pay. It refers to downward movement of an employee in the

organizational hierarchy with lower status and lower salary.

Demotion policy of Asfa

Asfa mostly dose not give demotion to any employee but it give demotion

only 3 times in its life.

Asfa give demotion only when employee is not regular, do not work sincerely

or employees behavior in organization not good.

In above cases, sometime Asfa left the employee from Pharmacy.

The policy is fair and equal for all level of pharmacy.

The circumstances under which employees can be demoted is clearly

specified and made known to employees.

Transfer

In Asfa company transfer rate is very low because of every worker are very

old from U.P., M.P., Bihar etc, that’s why transfer is very few.


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For employee transfer rate is also very low, because of post is limited.

PERFORMANCE APPRAISAL

Performance appraisal is the process of systematic, periodic and impartial,

estimating or judging the value, excellence, qualities or status and thereby

evaluating the performance or qualification of a person, things or object in

terms of requirement of the job for which he is employed.

Asfa have no performance appraisal system but Asfa can effectively

measure the performance of its workers. Asfa may use this appraised report

for promotion, transfer, statutory requirement, training and development and

for providing incentives.

Asfa can easily measure the performance of its workers on time base method

because in Asfa all worker has a card for attendance and work hours are

easily calculated from that card.

Asfa also the record the time of completion of job. There are many medicines

are prepared by Asfa at the same time. Medicine prepared in various

departments and the time of processing in each department is record by Asfa

and from that time it can measure performance of workers of every

department.


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WAGES AND SALARY ADMINISTRATION

Wages and salary administration means establishment and implementation of

sound policies and practices of employees compensation so that employees

are attracted, maintained and public relation image is built up. It includes job

evaluation, surveys of wages and salaries, development and maintenance of

wage structure, wage payment incentives, wage changes, adjustments etc.

Asfa gives wages and salaries according to time base wage system. Asfa

gives salaries at 7th of every month. Asfa use time base system because it is

old pharmacy and in that time peace rate wage system is not famous in

industry. Asfa also use this method because of some advantages like easy to

understand and calculate, earning of workers are regular and fixed Asfa want

to maintain quality which is not maintaining peace rate etc.

In Asfa, while deciding the structure of wage and salary administration, Asfa

first set objective of it which are as follows:

To give fair and regular wages to employee

To improve productivity by motivation

Control costs through sound wage and salary administration

To improve public image of company

To attract others for employment


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WELFARE ACTIVITIES

Labour welfare means anything done for the comfort and improvement.

Intellectual or social of the employees over and above the wage paid which is

not a necessity of the industry.

Employee welfare or labour welfare means,” The efforts to make life worth

living for workmen.”

● Intra mural welfare activity of Asfa

Convenience and comfort during the work

Workshop and cleanliness, lighting, elimination of dust, smoke, gases

Control of effluents

Supply of necessary beverage, pills and tables, tea, coffee

Notice boards, posters, information, slogans

Distribution of work hours and provision for rest hours, meal times and

breaks

House keeping, garden, passage, lawns, floor maintenance

Medical facilities

Compensation for accidents

Safety instruments such as guards, caps, shoes, aid equipments

Uniform and changing rooms


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Urinals and latrines, wash basins, waste disposal

Provision for drinking water

Economic services such as health insurance and bonus schemes

● Extra mural welfare activity of Asfa

Transportation

Vocational guidance and credit societies

Discount in purchase on medicines

Roads, lighting, garden

Communication facility

Security

Training and development programs

Welfare activity for society

Provide employment

Provide ayurvedic medicines at fair price

Effective waste disposal system

Effective use of resources of society


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EMPLOYMENT RECORD KEEPING

Asfa pharmacy maintained its record in the form of file. There are following

details, which are involved in the record keeping of each employee.

Employment history

Employee no

Name

Address

Rate of salary

Total balance saving

Attendance record and pay roll

Leaves, transfers and promotion

Shift cord

Over time cord

Training Records

Accident and sickness records

Employment rating

The objectives of employee records in Asfa are following:

1. To provide an evidence of what has taken place in the organization.

2. To supply information required for taking personnel decisions.


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3. To provide a basis for the formulation, evaluation and modification of

personnel and program.

4. To meet statutory obligations under various labour laws.


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PRODUCTION MANAGEMENT

Production is the process of converting the raw materials and other inputs into

the products for further production or the finished goods or services so that

the utility of inputs is created or enhanced and the needs of the consumers

are satisfied. That is consumer goods, industrial goods, services of transport,

medical treatment, education, banking, post and telegraphs, insurance etc. so

in simple meaning the management of the production process is called as

production management.

Production management means creating and maintaining an environment in

which individuals working together in groups willingly contribute their best to

produce the specified goods and services by optimum utilization of raw

materials and other inputs so as to timely satisfy the needs of the customers.

Good Production management is essential for every organization and it is

important in following ways,

It helps to satisfy the need of customer timely.

It increases the productivity of organization.


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It gives better satisfaction to the employees.

It satisfies the investors by increasing return on investment and capital

appreciation.

It satisfies the community by welfare and development activities.

It satisfies the suppliers.

It benefits to whole nation.

Organization structure of production department of “ASFA”


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Board of director

Managing director

Production manager

Assistant production manager

Packing manager

Inventory control

managerStore

manager

Supervisor Workers Workers Workers

Workers


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PRODUCTION PLANNING

Production planning is that function of management which decides about the

resources that will be required for future manufacturing operations and of

allocating these resources to produce the desired output at right time, in right

amount, of required quality and at minimum cost.

Production planning is the planning of how much produce, Requirement of

human resource and finance. It is also planning of quality standard and raw

materials requirement etc. production plan is preparation of guiding plan

before starting production plan involve when, what, how and why to produce

goods.

In Asfa, normally production plan is prepared from the sales or demand for the

product of company. Starting point of production planning is dispatch

department. Dispatch department supply various products of Asfa to the


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dealers. When stock of medicine is remain of only three months they inform

production department about requirement of medicine. From the information

of dispatch department, production department decides about manufacture

various products as per requirement and for this they prepare production plan.

In Asfa, production planning is include planning of material requirement,

requirement of manpower, capacity requirement etc.

Material requirement planning

Material requirement planning is the first of the production planning in any

company. In Asfa, production manager is check the availability of require

inputs or raw material. If raw material is not in stock then give purchase order

or if it is in stock, production manager do next planning of manpower.

Manpower planning

For achieving successful result of production planning, it is advisable to make

manpower planning in advance. In Asfa first they decided how much labour

required producing desirable quantity. If there is shortage of manpower, they

hire casual or part time labour.

Capacity requirement planning

Capacity requirement planning is a technique to determine what personal and

equipment capacities are required to meet production objectives. In Asfa, they

make CRP, various operations and activities are assigning to various

department. If capacity is inadequate they adjust it by some addition labour or

over time.

Maintain quality standard

In Asfa, there is separate department called quality assurance department

which is check quality of raw material finished product and semi finished

articles on company standards. They try to improve quality management

system for better customer satisfaction and provide qualitative medicine to its

customers.


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Inventory control

Since entire material requirement planning is done on the basis of production

plan, ultimately inventory level depends on accuracy of production plan. In this

industry, they use first in first out method for inventory control.

MATERIAL REQUIREMENT PLANNING

Material requirement planning is a technique for determining the quality and

timing for the acquisition of dependent demand items needed to safety master

schedule requirements.

In the modern world, enterprise resource planning system is being used

extensively and it also takes care of whole organization instead of one unit of

organization. Basically material requirement planning consists of computer

programmed, which is run periodically such as weekly, monthly or quarterly to

incorporate the latest schedule of production requirement.

In Asfa, for preparation of material requirement planning three inputs are used

which are as follows:

Master production schedule

Mps is based on forecast of various items. MRP accepts practically possible

master production schedule quantities of various items as quantities of items


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to be manufactured. It further calculates what the requirement of various raw

material and inputs is.

Inventory status file

All the quantities of various items in Mps is never considered for MRP process

it is always considered after deducting present inventory levels of various

items and pending purchase orders for this purpose, it is necessary to take

data from inventory status file of various items.

Bills of material

It is a database, which specifies relationship between raw material and

outputs. This document is necessary to convert production quantities of

finished products into requirements of various raw materials, parts,

components and sub assemblies.

Bills of material shows each of the materials, parts or sub assemblies by

unique part number, which facilitate processing by in to price and also

contents the quality of parts or material require per unit of end product. Bills of

material have a series of level each of represents a stage in the manufacture

of the end product.

Level 1: Representing final assembly or end product.

Level 2: Shows parts and sub assemblies when end product is the first

desmemtated.

Level 3: Result of desmentating the sub assemblies of level 1 in form of part

and father sub assemblies.


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ANALYSIS OF PLANT LOCATION

It is a function of determining the production unit should be located for most

economical and effective operations.

The points for which the decision of plant location is taken are as follows:

New business

Expansion not possible at the same site

Economic factor (land cost of old factory becomes high so by selling it owner

get large economic benefit)

Expansion opportunities needs more branches

Sudden development because of natural calamities

Special circumstances

The main objective of Asfa is to maximize the profit through the minimize cost

of production. This objective can be achieved only when the plant is at the

right place where all kinds of production facilities are available.

Process of selecting plant location involves following steps:


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1. Decision regarding country of operation

2. Selection of region or state

3. Selection of area

4. Selection of site

The owner of the Asfa Shree Swami Atmanand Sarswati was decided the

India as a country, the Gujarat as a stat, Surat as a city, Varachha as a site

location.

There are different factor which are play important role in considering the

plant location of Asfa are as follows.

Availability of raw materials

Asfa are using number of raw materials so the idle location for Asfa is that

where at least the main raw materials are easily available by which the

production of Asfa run regularly and the production cost can be minimized

considering all these Shree Swami Atmanand Sarswati select the place near

the river Tapi at varachha road.

Availability of labour

The availability of skilled and unskilled manpower, a prevailing wage pattern,

living costs and the industrial relations situation influence the location.

Manager chooses the location of Asfa at varachha road where both type of

manpower available easily at lower wages.

Transportation facilities

Adequate transportation facilities are essential for the economic operation of a

production system. Many facilities or plants are located along river banks.

Asfa is also located along river bank and near national highway so there is

good transportation facilities are available.

There are some other functions which also affect selection of plant location

are as follows:

Markets


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Power

Climate and fuel

Legislation and taxation

Community facilities

Waste disposal

Site size

Land costs

PLANT LAY- OUT

Plant lay-out is configuration of departments, work station and equipments in

the production system or in the conversion process. Plant lay-out is the

arrangement of machinery, equipments and facilities such as receiving and

shipping departments, tool rooms, maintenance rooms, inspection cabins,

stores, plating shops, heat treatment chambers, trolleys, cranes and other

handling equipments, employee amenities like toilets, canteen, rest and

change room, parking facilities etc. so as to ensure smooth and quick

movement of materials from raw material stage to finished product stage with

minimum material handling, quality of operations, good communication etc. at

the lowest possible handling cost. It includes arrangement of new plan and

also revision in existing lay-out.

There are various types of lay-outs are as follows:

Process lay-out.

Product lay-out.

Fix position lay-out.

Cellular manufacturing lay-out.


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Combination lay-out.

Service lay-out.

In Asfa, the plat lay-out is product type of plant lay-out. This company

manufactures many products on continuous bases and machines are for

special purpose. In this lay-out the machines or facilities are arrange

sequence of an operations require by a particular product. Thus for each

product there will be a separate line of machines and equipments and

depending on an operation sequence. There are two type of product lay-out

first line processing lay-out and second flow type of lay-out. In Asfa, there is a

line processing lay-out. There is sequence of operations from raw material

department to packing department.

TYPES AND CLASSIFICATION MATERIAL

HANDLING

Material handling is defined as controlled movement of material, from receipt,

through storage and production and up to the shipment of finished product. As

definition suggests it is concerned with storage and internal movement of

following type of material.

Raw material

Work-in-progress inventory

Finished product

Surplus and waste

Capital equipments

Asfa used only solid and liquid raw material. So we can classify the material

handling equipments of Asfa in following basis:

Classification on the basis of form of material

According to this classification there can be three broad categories, solid

material, liquid material and gases. Asfa use hand carts, trucks with container


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and manual handling system for solid material and pipelines and barrels for

liquid material.

Classification as per path of movement

Asfa use different equipments as per path of movement. Whether movement

is vertical or horizontal, whether it is a fixed path movement or variable path,

the equipments are different for each purpose such as hand carts can take

variable path and pipelines are for vertical movement of material.

Classification on the basis of degree of automation

There are three categories according to this method of classification. First,

fully automatic handling equipments like robots. Second, semi automatic

handling system like conveyer belt. Third, manual system like hand carts.

Asfa uses only third category which is manual system.

Classification on the basis of source of power

Equipments can be electrically powered, powered be any fuel and manually.

Asfa uses all these type of equipments such as boiler and machines are

electrically powered, truck are use diesel and hand carts are manually

powered.


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INVENTORY CONTROLL SYSTEM

Inventory control is the means by which material of the correct quality and

quantity is made available as and when it is required with due regard to

economy in the storage costs, setup costs, manufacturing costs, purchase

prices and working capital.

As inventory is an essential part of any organization. Systematic management

and control of inventory for all the items is a challenging job. Asfa’s main

objectives of inventory control are:

To maintain investment in inventory at the lowest level

To supply the products to its user as per their requirement at right time.

To keep inactive, waste, scrape and obsolete items at the minimum

level.

To minimize holding, replacement and shortage cost of inventory at

minimum level.

To maximize the efficiency in production.


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INVENTORY UNIT

Inventory unit shows the unit, which is explained in kilo gram, liter, meter etc.

ORDER CODE

Order codes represent the following results if items are 0, 1, 2……9.

0 = for firm planning of main items, which are to be dispatched without any

further process (final products)

1 = for manual planning, material requirement planning “off” switch for case:

the item is in short but similar item with some another code is available in

stock. It is planning can be stopped “off”.

2 = material requirement planning “on” switch for the item.

3 = material requirement planning “on” with instruction to check and plan for

sales order requirement.

4 = reserved for EDP department to freeze the planning released and to keep

the action in abeyance for one or another reason.

BYPASS CODE

Bypass code denotes 0 is for component and 1 is for phantom items. Bypass

code is used to bypass the item for convenience.

INSPECTION CODE

Inspection code denotes Y/N i.e. yes or no whether the item to be inspected

or not. Asfa usually check the entire item in B.M; hence, it is always “Y”.

SCRAP

Scrap means the waste of material arising during manufacturing process.

Scrap found in Asfa Company in the last 5 year and hence, it has to purchase

material in excess. It is 10% of purchased raw-material as per last five years

record.

WEIGHT

This is always in kg’s indicating net or gross weight that is suppose any item

is packed. The gross weight of item is equal to net weight + weight of box.


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NET WEIGHT= GROSS WEIGHT – BOX WEIGHT.

FIX LOT

It refers to single character Y/N- for specifying whether the order to be

released for a single lot or not.

EX: Lot is 500 and order quantity is 2500. If “Y” is given MRP will print 5 lines

and if “N” is given then it will print in a single line for a single order and single

schedule time.

LEAD TIME

For making any job available the company has to release the order to vender

then after the vender will take a sometime to deliver the material. Finally the

material will be inspected and will be made available at work place. The total

time taken is called “Lead Time”. This is always in weeks.

LOT SIZE

Lot size is the quantity of order at which the total ordering cost and inventory

carrying cost will be the minimum. Lot size decided on the following basis.

Requirement for a specific time span.

Economic order quantity calculated based on cost of production and

requirement.

Minimum order quantity specified by vender.

Fix packing offered by supplies etc.

The company has to define lot size in relevant unit of measuring such as box,

packet, liter or tones. EX: The company need 70 units of leaning but the

supplier does not supply less than 100 units so that size will be 1 box = 100

leanings.

SAFETY STOCK

It is the stock or inventory maintaining to meet unforeseen situation such as

variation in demand, variation in supply of quantity by supplier and variation in

lead time of supply etc. so it use in emergency.


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ACCUMULATED LEAD TIME

It is the total time taken in procuring the time after identification of its need and

releasing orders. (From placing to receipt of the item)

STOCK

There are several types of stock which are explained below.

1. Vender stock: vender stock has two type of stock. First is the labour

and other is repairing. Some items are given to vender for repairing are

known as repairing stock.

2. Store stock: The items, which have been stored by the company, are

known as store stock.

3. Repairing stock: some items are given for repairing because of, it

may store from long time or may be for any damage or corrosion is

called repairing stock.

4. Short stock: The stock, which is in short, is called short stock and

negative sign defines it.

5. Committed quantity: Committed quantity is the quantity, which is

issued against work.

6. Available quantity:

Available order = floor stock + store stock + repairing stock – (short

stock + committed quantity).

7. Sales order quantity: the quantities, which are issued against sales

order is known as sales order quantity.

8. Order quantity: the order quantity is the sum of purchase order and

work order quantity.

ORDER QUANTITY = PURCHASE ORDER + WORKING ORDER.

9. Indent quantity: The item is in short and the work order has been

made. After the purchase item has to be made and purchase that item

from vender, this quantity known as indent quantity.

INVENORY VALUATION METHODS


69

Materials are issued to the different jobs, works, and orders from the ‘store’.

The cost of finished product largely depends upon the price changed for raw-

material issued to the jobs. Various methods are used for inventory valuation,

which will solute with industry condition. The methods of inventory valuation

are as follows:

1. FIFO method (first in first out)

2. LIFO method (last in first out)

3. HIFO method (highest in first out)

4. Average cost method

5. Market price method

6. Standard cost method

7. Base stock method

Asfa use FIFO method for inventory valuation.

ABC ANALYSIS

Abc analysis is analysis according to the value of items. In Asfa, the inventory

consists of hundreds of items and many employee are controlled them. For

this company do lot of expenses. In order to affect economy in controlling

such large inventory Asfa use a system known as ABC (Always Better

Control) analysis.

It has been found from the experience that all items included in inventory are

not of equal importance. A few items in the inventory represent a large

proportion of total value of inventory. Hence, more attention must be devoted

to the control of such items. All the items are divided into three categories.

A – Category

It includes those items which are very important and of high value but forms

only a small proportion of total quantity of inventory.

In Asfa, there are 30 items which are comes in category A and they

represents as much as 74% of value of inventories. Strict control over receipt,

storage and issue should be exercised over these items such as Abhraka


70

bhasma shataputi, makardhwaja vati sataguna, bruhat vasant kusumakar

rasa, etc.

B – Category

Items included in category B are not as important as those in category A, but

are important enough for its proper records to be maintained. They constitute

70 items of total number of items, but represent 18% of total value of

inventory of Asfa. These items are Brahmi vati, makardwaja vati, ashvgandha,

mahasudershan shurna etc.

C – Category

The remaining items must be placed in category C. they are not so important

form the view point of maintaining control over the receipt and consumption

such items constitute 65% of the total number of items but they represent 8%

of total value.

ABC analysis of Asfa

Category No. of items(in % of total

number of items)

Value of items ( in % of

total value of inventory)

A 10 74

B 25 18

C 65 8

100 8

92

18%

74 C

B

A


71

74%

10 35 100

DIFFERENT RECORDS KEPT IN STORE

Store Inward Receipt

M/s. Vehicle no. Date

GR. / RR. No. Date INDENT No.

Transporter

Challan No.

Sr.

No.

Description

of material

Unit Qty. as

per

challan

Short

quantity

Received

quantity

Rejected

quantity

Quantity

accepted

Inspection report


72

No.

Bought of Purchase order no.

Material receipt report no.

Item

no.

Code

no.

particular Quantity

on

order

Quantity

received

period rejected Remarks

Date

MATERIAL RECEIPT PROCESS

In Asfa, there is systematic process for material receipt as follows.

The first step is purchase order given by company to suppliers.

When material comes it is not directly sent to store department but it is given

fore quality checking.

In Asfa, there is one laboratory to check the quality of materials.

They are checking the quality of goods and compare with quality of sample

which is given by suppliers.

If there is any discrepancy, it should be immediately reported to the

purchase department and that goods are sent to rejected goods department.

Rejected goods department take necessary action for the return of goods to

suppliers.


73

If the goods are of quality, receiving section will prepare a “goods receive

note”. Four copies of the note are prepared and three copies are sent to the

store keeper along with the goods received and they attach green color

“accept card” with materials.

Received material is store in various containers by store department and

issue when they get order.

MATERIAL ISSUE PROCESS

In Asfa, there is a simple and short process of material issue. It is as follows.

Received material store in different container, in different quantity, by store

department.

When production department need material, production manager is make a

report of required material and send to store department.

Store department check the availability of material. If require material is

available, they send it for quality checking to quality control department.

If quality is acceptable, they send report of it to store department.

After this, store manager take the material which is require and send for

cleaning that material.


74

At the last the cleaned material is send to purchase department with entry in

material outward book.

DOCUMENTS OF PURCHASING

Purchase request

Asfa pharmacy Ltd.

Surat.

Request for quotation

Tender no. ……….

Date ……….

To,

(Name and Address of Supplier)

Sir,

Serial no. Description of

Items

quality quantity Terms of

delivery


75

Please let us have your best offer for the supply of the following items. The items

should be delivered F.O. R. Surat. The tender closes on (date) at (time) and will be

opened at (time) on the following day. The first copy of tender should be dispatched

to us duly filled in before the close of the tender.

Your faith fully,

For Asfa pharmacy ltd.

Purchase officer

Comparison statements

Asfa Pharmacy

Surat

Comparative statement of quotations

Tender no……… Opened on…………

Name of material………

Serial

no

Name of

supplier

quantity price Duties and

taxes

Terms of

delivery

remarks

Entered by………. Checked by……….


76

Purchase order

Asfa Ayurvedic Co-operative Pharmacy

Near Panini taki, Varachha Road,

Surat-395006

Phone no: 648092, 644410

PURCHASE ORDER

Purchase Order No:

Supplier Quotation:

TO: No. & Date:

Please supply the following items on the terms and condition mentioned below.

Sl No Description Material code size Qty. Price Amount Delivery date

Terms of delivery……..

For Asfa Pharmacy

Purchase Manager

PURCHASE PROCESS

The process describes the sequence of steps leading to the completion of an

identified specific task. Thus, purchasing process describes the sequence of

steps by which purchase function is carried through from its inception to it

completion. The steps of process are as follows:

A) Receive requisitions

The requisition includes information like how many items wanted, when they

should be available, quantity in hand, who is making the request etc.

In Asfa, who requires raw materials or other things, they give “purchase

requisition slip” to production department.


77

B) Review requisitions

The review of requisition is necessary. This is done to answer questions like:

(1) Can a less expensive material serve purpose?

(2) Can it be eliminated?

(3) Can another item serve the same function?

(4) Can a supplier reduce price by revise specification?

C) Select suppliers

Asfa is co-operative pharmacy and for purchase they invite quotation from

various suppliers. After getting quotations and by comparing them Asfa select

the suppliers. Asfa is not giving so much important to price but give important

to quality.

D) Place orders

Orders are placed to selected suppliers. For order placing to selected

suppliers, Asfa prepare a purchase order and send to suppliers. Purchase

order includes specific quantity and quality of material at stipulated terms and

material send period and placed mentioned in it.

E) Monitor orders

If placed order is for long time then it is necessary to monitor those orders.

Asfa also monitor these types of orders because lengthy orders are checked

to determine whether anticipated deliveries are on schedule.

F) Receive orders

The purchase transaction is complete only after receiving the order quantity in

an acceptable condition. When material is comes in Asfa, it is checked for

quality in Asfa‘s laboratory. If qualities acceptable then only material is send to

store department with material inward receipt.


78

QUALITY CONTROL

Quality is measure of characteristic of a product or service which impart it

functional or aesthetic value so as to satisfy the needs of and users for a

given price paid by them.

Quality control is a system of policies, procedures and guidelines which

established and maintained the specifies standard of quality. It includes all

aspects of quality such as research and development, design parameters,

inspection, measurement and analysis of current quality levels, future trends

and also competitor’s quality level, feedback from field performance of quality,

choice of machines, tools, processes etc., selection and training of production

and inspection staff, corrective actions and follow up etc.


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Asfa’s objective of quality control

Asfa’s main objective is to produce cost effective quality ayurvedic medicine.

The other objectives are as follows:

To give qualitative products to customers.

To see whether the medicines are confirms to pre-determine standers.

To reduce wastage.

To develop quality consciousness.

To assess the quality.

QUALITY CONTROL SYSTEM IN ASFA

Asfa checks the quality of all three type of product, raw-material, in process

goods and finished product.

Raw –material

In this stage, raw materials are being checked and compare with specified

quality or order placed. In quality control laboratory they check the quality of

raw material, ratio of water and solid material etc. If quality of raw material is

not satisfactory, goods will be rejected. If acceptable report is send to store

department.

In process goods


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Asfa also check the quality of goods during the process of production so is

there any problem in quality while processing, it can remove by taking

corrective actions and make qualitative medicines for customers. These types

of checking record are kept in “standard verification”.

Finished product

When product are finished its process then from them some samples are

send to quality control department for quality checking and if quality is

accepted then only finished product give to packing department for packing

and labeling. The document is used to keep these types of records is called

“Finished product report”.

In Asfa, there is systematic and scientific approaches for quality control they

follow some standardize rules and regulation for quality control. Asfa check

quality of Raw material, In process goods and Finished product.

For raw material they check the quality of item of various levels such as

scientific name, family, description (macro and micro scope).

After checking the items at micro and macro level then they check its identity.

By purity

◊ Foreign matter

◊ Total ash

◊ Acid

By strength

◊ Alcohols

◊ Water

For In process goods and finish product they check integration of various item

checks that quality of product will much with company standard.


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DOCUMENTS RELATED TO QUALITY CONTROL

1. Chemical list

2. Instrument list

3. Reference book list

4. S.O.P. (Standard Operating Process)

5. M.F.C. (Master Formula Card)

6. Calibration report

7. Test reports

Finished product report

Raw material report

Packing material report

In process report


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Re-test report

R.M. order sample record

Stability study report

8. House kipping record

9. Complain record ( outside)

10.Prepare solution record

11. In-ward, out-ward registered

12.B.M.R. issue registered

13.Suggestion record

14.Release order record

15.Out side testing record

16.Q.S.P. (Quality System Procedures)

17.Q.A.M. (Quality Manual)

18.Date stock registered.


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INTRODUCTION TO FINANCIAL MANAGEMENT

The scope of financial management, that is, the views about finance functions

have undergone remarkable changes over time. Till 1950, finance function

was regarded as the function only of raising finance for business, and sources

of finance but now, an efficient and effective utilization of finance is also been

considered as an important function of financial management.

Financial management means rising of adequate funds at the minimum cost

and using them effectively in business. Financial management is concerned

with the financial problems of business organization. It is concerned with the

problems of rising finance for establish, expand and modernize business unit,


84

GENERAL MANAGER

ACCOUNTANT MANAGER

CASHIER

SENIORCLERK

BANKINGOPERATOR

RAW MATERIAL

DEPARTMENT

SALES DEPARTMENT

CLERKS WORKERS WORKERS WORKERS

the problems of providing fixed and working capital, the problem of distribution

of income etc.

Hoagland says, “Financial management is concerned mainly with such

matters as, how a business corporation raises its finance and how it makes

use of it”.

ORGANIZATION STRUCTURE OF FINANCE

DEPARTMENT


85

REVENUE & CAPITAL BUDGETING

Asfa is a co-operative pharmacy and it is not work with object of earning profit.

Asfa do not prepare revenue and capital budgets.

Asfa do not prepare revenue and capital budget but if Asfa prepare it than it is

useful to Asfa in following ways:

Revenue budgeting is beneficial as it encourages cost consciousness,

ensuring discipline in operations, improvement in handling, improvement in

handling, standardization of products, better analysis of financial statements,

detection of deficiency areas, elimination of waste, fixing the responsibilities


86

and creation of responsibilities, better co-ordination between the departments,

periodic evolutions of plans, timely improvements in profit plans, etc.

Asfa do not prepare capital budgeting but it can prepare it by following the

below mentioned steps:

Identifying the potential investment opportunities

Assembling of investment proposals

Decision making about selection of one proposal from various proposals

Implementation of one proposal

Performance review

COSTING METHODS

The methods to be used for the ascertainment of cost of production differ from

industry to industry. It primarily depends upon the manufacturing process and

also on the methods of measuring the departmental and finished products.

There are various methods of costing are as follows:

Job costing

Contract costing

Batch costing


87

Element of cost

Element of cost

Materials Cost

Materials Cost

Labour costLabour costOther

expensesOther

expenses

Direct materials

cost

Direct materials

cost

Indirect materials

cost

Indirect materials

cost

Direct labour cost

Direct labour cost

Indirect labour costIndirect

labour cost

Direct expensesDirect

expenses

Indirect expensesIndirect expenses

Works overheadWorks

overhead

Administration overhead

Administration overhead

Selling and distribution overhead

Selling and distribution overhead

Process costing

One operation costing

Service costing

Multiple operations costing

Asfa use batch costing and multiple operation costing methods. Asfa use

these methods because Asfa produce its products in batch and multiple

operations are proceeding at a time in Asfa.

A batch may represent a number of small orders passed through the

pharmacy in batch. Each batch is treated as a unit of cost and separately

costed. The cost per unit is determined by dividing the cost of the batch by

number of units produced in a batch.

Multiple operation method of manufacturing consists of a number of distinct

operations. It refers a cost of converting the raw material into finished goods.

Pharmacy also considers the rejections in each operation also for costing of

products.

COSTING STRUCTURE OF ASFA


88

COSTING SHEET OF ASFA

Particular Amount Amount

Raw materials

Opening stock

Add: purchasing

Less: closing stock

Labour

Direct expenses

Prime cost


89

Factory overhead

Factory expenses

Fuel and power

Carriage inward

Indirect wages

Depreciation and repairs

Rent and taxes

Insurance

stationary

Works cost

Office and

administration

overheads

Office expenses

Director fees

Rent, rates

Office salaries

Sundry expenses

Stationary

Depreciation of office

furniture

Office cost

Selling and distribution

expenses

Travelers expenses and

salaries

Packing expenses

Stationary

Bad debt

Cost of sales


90

profit

Selling price

WORKING CAPITAL MANAGEMENT

The term working capital refers to that part of capital which is not tied up in

fixed assets but is used to meet the day-to-day requirements of business,

which changes from day-to-day, and which is converted into cash

continuously.

Working capital management includes the management of

Working capital finance


91

Management of receivable

Management of inventory

Management of cash

WORKING CAPITAL FINANCE

Asfa uses the sources for working capital are as follows:

Long Term Sources of Working Capital

Equity shares

Preference shares

Long term loans

Short Term Sources of Working Capital

Short term loans

Bank overdraft

Trade credit

Commercial papers

MANAGEMENT OF RECEIVABLES

Receivables are assets accounts representing amount owed to the firm as a

result of sale of goods in the ordinary courses of business.

Management of receivables is depending upon the credit policy of company.

Asfa has the credit policy as under.

Asfa has too strict or too liberal credit policy


92

Asfa’s credit standards are clearly specified in policy and strict for

customers

Asfa give cash discount on bulky purchase

Asfa give goods only on one month credit period.

Asfa timely collect and get its receivables

MANAGEMENT OF INVENTORY

‘Inventory control means the decision of the firm as to the extent to which

inventories can be economically stored.’

Asfa’s main objectives of inventory control are:

To maintain investment in inventory at the lowest level

To supply the products to its user as per their requirement at right time.

To keep inactive, waste, scrape and obsolete items at the minimum

level.

To minimize holding, replacement and shortage cost of inventory at

minimum level.

To maximize the efficiency in production.

MANAGEMENT OF CASH

Cash is the medium of exchange which allows management to carry on the

various activities of the business on day to day basis.

Cash management involves the following four factors:


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Ascertainment of the minimum cash balance and controlling the level of

cash.

Controlling cash inflows.

Controlling cash outflows.

Optimum investment of surplus cash.

PREPARATION & ANALYSIS OF FUND FLOW

STATEMENT

A fund flow statement provides information on how, during the reporting

period, decisions relating to capital structure, dividend and investment in non

current assets have changed the amount invested in working capital.


94

A fund flow statement presents sources and application of funds. Sources

imply those movements in non current assets, non current liabilities and

equity that increase the working capital. Applications imply those movements

in non current assets, non current liabilities and equity that reduce the working

capital.

Sources and Application of Funds

1. Sources:

(A) Funds from business operations

(B) Sales of non current assets

(C) Issue of share capital

(D) Long term borrowings

Total (1)

2. Applications:

(A) Purchase of non current assets

(B) Redemption of debentures

(C) Repayment of other long term liabilities

(D) Buy back of shares

(E) Redemption of preference shares

(F) Payment of income tax

(G) Distribution of cash dividend

Total (2)

3. Changes in working capital (1- 2)

ACCOUNTING POLICIES

Accounting policies are defined as, “the specific principles, bases,

conventions, rules and practices adopted by an enterprise in preparing and

presenting financial statements.”

Accounting policies for various matters of Asfa are as follows:


95

Debit and Credit

Debit and credit are shown as on rules of accounting of debit an asset

account increase by carrying amount and debit liability account decrease and

credit as vise-versa.

Fixed assets

All fixed assets are shown at actual cost and depreciation is less from it as per

straight line depreciation method.

Inventories

The stock of inventories such as finished, processed and raw material are

valued by its cost or net realizable value.

General accounting

The accounts are prepared on historical cost basis and accounting principle of

going concern concept.

DEPRICIATION

Depreciation is the process of allocating the acquisition cost of the tangible

asset less salvage value, if any, in a systematic and a rational manner, over

the estimated useful life of the asset.


96

Asfa use two methods for calculate depreciation first is straight line method

and second is written down value method.

Depreciation on plant and machinery is provided on straight line method.

Depreciation on other assets is provided on written down value method.

The applicable rates are as specialized in schedule 14 of the act. Depreciation

in respect to revalued assets is recouped from revaluation reserved.

Depreciation in addition from fixed assets is provided on production data

bases from/up to the date of such addition/deletion as the case may be.

Depreciation in addition assets due to exchange variation, forward over

premium changes etc. is provided over the remaining useful life the assets.

PROFIT AND LOSS ACCOUNT

Common size profit and loss account of ASFA at end of the year 2008-2009

Particular

(Income)

Particular

(Expense)


97

Rs. Rs.

Year 2008 % Year 2009 % Year 2008 % Year 2009 %

To Gross

profit

8236843.2

7

9

4.

7

7

9270729.45 9

5.

8

5

To Office,

salary,

allowance

etc. A/C

4329229.5

5

4

9.

8

1

5054753.0

2

5

2.

2

6

To

Interest of

dividend

124553.00 1.

4

3

26183.00 0.

2

7

To Office

maintenance

expenses

A/c

1287194.8

3

1

4.

8

1

1619563.3

0

1

6.

7

5

To Other

income

18662.37

0.

2

2

25326.50 0.

2

6

To Vehicle

expenses

A/C

86264.70

0.

9

9

92099.27

0.

9

5

To

Navagam

ASFA unit

profit

312189.11 3.

5

8

349808.40 3.

6

2

To Others

expenses

A/C

264289.04

3.

0

4

675345.35 6.

9

8

To Repairing

expenses

A/c

593246.62

6.

8

3

416338.10 4.

3

1

To

Depreciation

expenses

A/c

941592.00

1

0.

8

3

890286.00 9.

2

1

To Charity

fund

5000.00

0.

0

6

0.00 0.

0

0

To Vat

2007-08

406258.14

4.

6

7

114366.00 1.

1

8

To Valsad

hospital

111077.36

1.

2

175934.72 1.

8


98

expenses 8 1

C.S.T. 2007-

08

16874.04

0.

1

9

851.00 0.

0

1

To Net

Profit-

transferred

to B/S

651221.04

7.

4

9

632510.59 6.

5

4

Total 8692247.7

5

9672047.35 Total 8692247.7

5

9672047.3

5

BALANCE SHEET

Common size balance sheet of the ASFA at the end of year 2008-2009

Particular Year 2008 % Year 2009 %

Fixed assets:- (A)

Factory 6285822.74 22.23 6285822.74 20.52


99

Machinery 4598896.57 16.26 5022897.57 16.40

Electric equipment 1011063.89 3.58 1030813.89 3.37

Electric installation purchase 142641.71 0.50 142641.71 0.47

Furniture 2447142.96 8.65 2455943.46 8.02

Library 45270.70 0.16 45270.70 0.15

New assets 1100352.64 3.89 1159707.64 3.79

Total fixed asset (A) 15631191.21 55.27 16143097.71 52.69

Deposits & advances (B) 3015094.99 10.66 4123975.71 13.46

Current assets:- (C)

Cash & Bank balance 4219683.04 14.92 2777780.00 9.07

Investment 26000.00 0.09 26000.00 0.09

Closing stock 5388230.00 19.05 7566755.00 24.70

Total current assets (C) 9633913.04 34.07 10370535.00 33.85

Total assets (A+B+C) 28280199.24 30637608.42

Capital and internal liabilities :-

Share & funds 3557271.18 12.58 3818597.98 12.46

Reserves 300989.25 1.06 300989.25 0.98

Depreciation fund 10598407.95 37.48 11488693.95 37.50

Research fund 2293795.15 8.111 2393639.15 7.81

ASFA development fund 712571.60 2.52 712571.60 2.33

Others fund (According to rules) 3686100.51 13.03 3920692.51 12.80

Deposit 480000.00 1.70 490000.00 1.60


100

Creditors & liabilities 5194425.26 18.37 6022119.79 19.66

Departmental reserve 694021.64 2.45 762458.44 2.49

Unpaid dividend 82740.00 0.29 76215.00 0.25

Others paid 28655.66 0.10 19120.16 0.06

Income-expense a/c 651221.04 2.30 632510.59 2.07

Total liabilities 28280199.24 30637608.42

RATIO ANALYSIS

A ration is only a comparison of the numerator with the denominator. The term

ratio refers to the numerical or quantitative relationship between two figures. A

ratio is the relationship between two figures, and obtained by dividing the


101

former by the latter. Ratios are design to show how one number is related to

another.

Ratio analysis is an important and age old technique of financial analysis. The

data given in the financial statement in absolute form are dump and are

unable to communicate any thing. Ratios are relative form of financial data

and very useful technique to check upon the efficiency of a firm.

Ratio analysis is extremely helpful in providing valuable insight into a

company’s financial picture. Ratio normally pinpoints a business strength and

weakness.

CURRENT RATIO

Years Current Current Ratio


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assets

(A)

liabilities (B) (%)

(A/B)

2008 9633913.04 8293637.7

1

1.16

2009 10370535.00 9273552.54 1.12

Current Ratio

1.16

1.12

1.1

1.11

1.12

1.131.14

1.15

1.16

1.17

2008 2009

Years

Rat

io (

%)

Series1

Interpretation:

In inter firm comparison the firm with higher current ratio has better liquidity or

short term solvency. Here, in ASFA current ratio is reducing every year is not

good for pharmacy. In 2008 year it is some satisfactory but in 2009 years it is

not good.

NET PROFIT RATIO


103

Years Net profit Sales Ratio (%)

(A/

B)*100

2008 651221.04 27923202.61 2.33

2009 632510.59 31035637.60 2.04

Net Profit Ratio

2.33

2.04

1.8

1.9

2

2.1

2.2

2.3

2.4

2008 2009

Years

Rat

io (

%)

Series1

Interpretation:

The net profit ratio measures the efficiency of management in generating

additional revenue over and above the total cost of production. The net profit

ratio in ASFA increases in 2008 year which shows increased efficiency of

pharmacy but it decrease slight in 2009 with increased in sales and but

decreased in net profit which shows some problem in efficiency and effective

management of pharmacy.

RETURN ON ASSETS RATIO


104

Years Net Profit Total

Assets

Ratio

(%)

(A/B)

2008 651221.04 28280199.24 0.0230

2009 632510.59 30637608.42 0.0206

0.023

0.0206

0.019

0.0195

0.02

0.0205

0.021

0.0215

0.022

0.0225

0.023

0.0235

2008 2009

Series1

Interpretation:

Return on assets ratio indicates the effective utilization of assets in generating

revenue for firm. In ASFA, the ratio decreased every year that shows the

ineffective use and inefficiency of management.

CONCLUSION:

After comparing all the ratio of past years with current year, we can say that

pharmacy’s efficiency and the management’s effectiveness are decreased in

2009 year. ASFA pharmacy loses net profit in current which indicates ASFA

pharmacy should need to increase its efficiency.


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Asfa Report by Vivek Aghera

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