A Study On Heads of Expenses and Measures of Cost Analysis For Financial Performance at Apollo Pharmacy."

“A study on heads of expenses and measures of Cost
analysis for financial performance at Apollo Pharmacy.”
PROJECT REPORT
Submitted to the ICFAI University, Tripura in partial
Fulfillment of the requirements of the award of the Degree of
Master of Business Administration
Project Trainee
“R.RADHAKRISHNAN”
(Enrollment No: 08PMP0114914)
Under The Guidance Of
Mrs.P.R.BRINDA KALYANI. M.COM, (PH.D)
(Faculty, Cygmax Institute of Management Studies, Madurai)
Institute of Management Studies,
No 78Ramalinga Towers, TPK Road,
Andalpuram, Vasanth Nagar.
Madurai
1
June 2009
It is certified that the Project entitled “A study on heads of expenses and measures
of Cost analysis for financial performance at Apollo pharmacy.” is a record of project
work done by the candidate during the period of study under me and that the Project has
not formed the basis for the award of any degree, diploma, associate ship, fellowship or
other similar title to the candidate and that the Project represents independent work on the
part of the candidate.
Signature of the Faculty Guide,
Mrs.P.R.BRINDA KALYANI. M.COM, (PH.D),
Faculty, Cygmax Institute of Management Studies,
Madurai.
2
R.RADHAKRISHNAN,
08PMP0114914,
Cygmax Institute of Management Studies,
Madurai.
STATEMENT BY THE CANDIDATE
I hereby declare that the Project titled “A study on heads of expenses and measures of
Cost analysis for financial performance at Apollo pharmacy.” for the award of Master
of Business Administration is my original work done under the guidance and Supervision
of Mrs.P.R.BRINDA KALYANI. M.COM, (PH.D), Faculty, Cygmax Institute of
Management Studies, Madurai and the study have not previously formed the basis for
the award of any degree, diploma, associate ship, fellowship or other similar title of any
University or Institution. .
(R.RADHAKRISHNAN)
Place:
Date:
3
ACKNOWLEDGEMENTS
I wish to record my cordial and sincere thanks and unfathomable gratitude to
S.Nagarajan, B.com. Apollo Pharmacy Division, for his scholarly guidance and
inspiration. He was deeply involved in the project right from the formulation of the
problem till its completion. I have benefited tremendously from my discussions with him
throughout this research work. The shape of the Project owes a lot to his useful
suggestions and critical and constructive comments.
I express my thanks to Mr ORS Rao, Director, Cygmax Institute of Management
Studies, Head Office Hyderabad for allowing us to carry out our project in this
wonderful organization.
I express my thanks to Mrs Brinda Kalyani.P.R Principal Cygmax Institute of
Management Studies, Head Office Hyderabad for guiding us give the detailed SIP
Curriculum in my project.
I owe my debt to Mrs. Brinda Kalyani.P.R, Faculty Guide, CIMS, MDU. She has
guided and encouraged for the novel avenues of research in my project.
I extend my sincere and whole hearted thanks to Senior Manager, Mrs.Geetha and
Manager, Mrs.Rajvee at Apollo Pharmacy Division, Chennai.
4
LIST OF CONTENTS
Page No.
Certificate to accompany the project I
Statement by the candidate

II
Acknowledgements
III
CHAPTER I 1
1.1. Introduction 2
1.2. Statement of problem 3
1.3. Relevance of the project to MBA 3
1.4. About the project 4
1.5. Need for the study 5
1.6. Scope of the study 6
1.7. Objective of the study 6-7
1.8. Period of study 7
1.9. Research methodology 7
1.10. Sampling design 7
1.11. Data processing 7
1.12. Statistical tools 8
1.13. Limitations of the study 8
1.14. Chapter scheme 8
5
CHAPTER II 9
2.1. Company profile 10-12
2.1.1. Group Operational Highlights 12-14
2.2. About the company 14-21
CHAPTER III 22
3.1. About the Concept 23-26
CHAPTER IV 27
4.1. Data collection & Data analysis 28-59
CHAPTER V 60
5.1. Findings 61-62
5.2. Suggestions 62-63
5.3. Conclusion 64
Bibliography 65
6
LIST OF TABLES
TABLE NO TITLE PAGE NO

I TOTAL APOLLO PHARMACIES 16
II CATEGORY WISE APOLLO PHARMACIES 17
II INCOME AND EXPENDITURE STATEMENT OF 29
APOLLO PHARMACY AT AIRPORT
FOR THE YEAR ENDED
IV INCOME AND EXPENDITURE STATEMENT OF 30
APOLLO PHARMACY AT ASHOK NAGAR FOR
THE YEAR ENDED
V INCOME AND EXPENDITURE STATEMENT OF 31
APOLLO PHARMACY AT KILPAUK
FOR THE YEAR ENDED
VI INCOME AND EXPENDITURE STATEMENT OF 32
APOLLO PHARMACY AT NUNGAMBAKKAM
FOR THE YEAR ENDED
VII INCOME AND EXPENDITURE STATEMENT OF 33
APOLLO PHARMACY AT SASTRI NAGAR
FOR THE YEAR ENDED
VIII DATA COLLECTION FROM 5 APOLLO 34
PHARMACIES TO DO GROSS PROFIT
ANALYSIS
IX GROSS PROFIT OF APOLLO PHARMACY AT 36
AIRPORT
X GROSS PROFIT OF APOLLO PHARMACY AT 38
ASHOK NAGAR
XI GROSS PROFIT OF APOLLO PHARMACY AT 40
KILPAUK
XII GROSS PROFIT OF APOLLO PHARMACY AT 42
NUNGAMBAKKAM
XIII GROSS PROFIT OF APOLLO PHARMACY AT 44
SASTRI NAGAR
XIV DATA COLLECTION FROM 5 APOLLO 45
7
PHARMACIES TO DO NET PROFIT ANALYSIS
XV NET PROFIT OF APOLLO PHARMACY AT 47

AIRPORT
XVI NET PROFIT OF APOLLO PHARMACY AT 49
ASHOK NAGAR
XVII NET PROFIT OF APOLLO PHARMACY AT 51
KILPAUK
XVIII NET PROFIT OF APOLLO PHARMACY AT 53
NUNGAMBAKKAM
XIX NET PROFIT OF APOLLO PHARMACY AT 55
SASTRI NAGAR
XX PURCHASES ON 2007-2008 56
XXI PURCHASES ON 2008-2009 56
LIST OF CHARTS
Chart No TITLE PAGE NO.

I Total Apollo Pharmacies 17
II Category Wise Apollo Pharmacies 18
III Gross Profit of Apollo Pharmacy at Airport 36
IV Gross Profit of Apollo Pharmacy at Ashok Nagar 38
V Gross Profit of Apollo Pharmacy at Kilpauk 40
VI Gross Profit of Apollo Pharmacy at Nungambakkam 42
VII Gross Profit of Apollo Pharmacy at Sastri Nagar 44
VIII Net Profit of Apollo Pharmacy at Airport 47
IX Net Profit of Apollo Pharmacy at Ashok Nagar 49
X Net Profit of Apollo Pharmacy at Kilpauk 51
XI Net Profit of Apollo Pharmacy at Nungambakkam 53
XII Net Profit of Apollo Pharmacy at Sastri Nagar 55
XIII Outside purchases of Apollo pharmacy at Airport 57
XIV Outside purchases of Apollo pharmacy at Ashok Nagar 57
XV Outside purchases of Apollo pharmacy at Kipauk 58
8
XVI Outside purchases of Apollo pharmacy at Nungambakkam 58
XVII Outside purchases of Apollo pharmacy at Sastri Nagar 59
9
CHAPTER – I
DESIGN OF THE STUDY
CHAPTER - I
1.1. INTRODUCTION:
The Pharmaceutical Industry rightly called the “Life Line” industry, processes
goods which are vital for people’s welfare. It is beyond doubt that the Progress achieved
by Indian Pharmaceutical Industry (refers only to manufactures of Allopathic Medicines)
has been spectacular since independence. There were only a few drugs, which were
manufactured in the country from the basic stage at the time of independence. Since then
the industry has grown at a remarkable place and now it has acquired the capabilities to
produce a wide range of pharmaceutical and intermediates for basic stage where it is
termed as the largest and most modern industry among the developing countries.
World War I and World War II formed significant landmarks in the history of
Indian Pharmaceutical Industry, which is now nearly a century old.
After independence, a number of foreign companies set up manufacturing units in
India and today there are around 6000 large, medium and small companies, the
competition among them being very severe.
10
1.2. STATEMENT OF PROBLEM
Here they are maintaining Two Stores separately for Hospital based Pharmacies and
Clinic, IOCL and Stand alone Pharmacies, and carrying Receipts and Issues in the daily
manner to all the branches. But maximum of the branches are not get their demands fully
at the time because of the closed system integration .The problems arising because of the
system are:
i. Unbalanced inventory at stores to the branches.
ii.The transportation cost will be higher for daily issues.
iii.The more outside purchase will reduce the profit even though the sale is more.
iv.Year to year increase the no. of pharmacies that they have provided the
expenses is more. But profit is not a more.
1.3. RELEVANCE OF THE PROJECT TO MBA:
11
The analysis of the deviation between the company’s actual and
standard cost helps the management in decision making and controlling procedures by
taking appropriate measures to rectify. The project also gives the knowledge of planning
and making decision about materials required and the best process that is to be followed
to produce a product at least cost with high quality.
1.4. ABOUT THE PROJECT:
This title was chosen because in today’s competitive environment
profit can be increased only by cutting down the cost of production and expenses. So it is
very important to control the cost and reduce as much as possible. So, many companies
are adopting budgeting and they use variance analysis to find the reason and cause for
their deviation which will help them to reduce the cost in future and to keep a check in
cost. So, the performance of the company also depends company’s effectiveness in
producing the product at good quality at low cost. So this project will help us to calculate
the variance and to evaluate the reasons, so that it will help the company to take
appropriate measure and control the cost incurred. So, that profit and performance
increases. So, the project trainee has chosen the topic as “A study on heads of expenses
and measures of Cost analysis for financial performance at Apollo pharmacy”. For
this project trainee has applied the concept of cost control and Income and expenditure
statements. The project trainee has collected the details about expenses of cost and their
financial performance of the company.
12
1.5. NEED FOR THE STUDY:
i. The financial statements are prepared under the historical cost convention under
accrual method of accounting and as a going concern, in accordance with the
Generally Accepted Accounting Principles (GAAP) prevalent in India and the
mandatory accounting standards issued by the Institute of Charted Accountants of
India (ICAI) and according to the provisions of the companies act, 1956.
ii. It is the area maintains the financial statements. There are some costs involved,
a. Operative costs
b. Administrative costs
c. Employee costs
d. Financial costs
iii. The company follows the cost system they have financial performance.
iv. The increase the total cost of expenditure they have low financial performance.
v. The decrease the total cost of expenditure they have high financial performance.
13
1.6. SCOPE OF THE STUDY:
The scope of the study is as follows:
i. Revenue and expenses have been identified to segments on the basis of
their relationship to the operating activities of the segment. Revenue and
expenses, which relate to the enterprise as a whole and are not allocable
to segments on a reasonable basis, have been included under “unallocable
expenses”.
ii. Analyze the financial performance of the company going to good or
better or bad.
iii. Cost control is a saving function, which deals with the good financial
performance of the company.
1.7. OBJECTIVE OF THE STUDY:
The objectives of the study are as follows:
i. To analyze the administration cost in Apollo pharmacy.
ii. To analyze the outside purchases cost.
14
iii. To analyze the four years Income and Expenditure statement in 5 Apollo
pharmacy for the cost of expenses.
iv. To give suggestion and to improve (reduce) the cost control system for the
expenses in Apollo pharmacy.
v. To analyze the four years Income and Expenditure statement in 5 Apollo
pharmacy for the financial performance.
vi. To give suggestion and to improve (increase) the financial performance in Apollo
pharmacy.
1.8. PERIOD OF STUDY:
The project trainee has collected and studies the details about Income and
Expenditure statements on 2005-2006, 2006-2007, 2007-2008 and 2008-2009. These four
years data were analyzed for cost of expenses and financial performance. The trainee did
the project from April end to June end comprising of 13 weeks in total.
1.9. RESEARCH METHODOLOGY:
The project trainee has used secondary data for this project. Secondary data
are compiled from company reports, previous studies, management books and websites.
The research process starts from the statement of problem, research design,
objectives, conceptual framework, and tools of analysis and limitation of the study.
1.10. SAMPLING DESIGN:
15
The project trainee has used the sample size of 5 Apollo pharmacies at
Airport, Ashok Nagar, Kilpauk, Nungambakkam and Sastri Nagar of Chennai.
1.11. DATA PROCESSING:
The project trainee has used income and expenditure statements of Apollo
pharmacies at Airport, Ashok Nagar, Kilpauk, Nungambakkam and Sastri Nagar of
Chennai.
1.12. STATISTICAL TOOLS:
The project trainee has used the statistical tools like percentage and charts.
1.13. LIMITATIONS OF THE STUDY:
i. The data collected is entirely dependent on the accuracy of the details given by
departments.
ii. Time limit given for the study is too short.
iii. Moreover the details regarding carrying cost and ordering cost are not available to
the researcher from the company.
1.14. CHAPTER SCHEME:
This report consists of five chapters of which the first chapter includes the
details of general information of pharmaceutical industry, Statement of the problem,
Objectives, Scope of the study, Need of the study, period of the study, Research
16
Methodology, Sampling design, Data processing, Statistical tools and Limitations of the
study. The Pharmaceutical Industry rightly called the “Life Line” industry,
processes goods which are vital for people’s welfare. It is beyond doubt that the Progress
achieved by Indian Pharmaceutical Industry (refers only to manufactures of Allopathic
Medicines) has been spectacular since independence. There were only a few drugs, which
were manufactured in the country from the basic stage at the time of independence. Since
then the industry has grown at a remarkable place and now it has acquired the capabilities
to produce a wide range of pharmaceutical and intermediates for basic stage where it is
termed as the largest and most modern industry among the developing countries.
World War I and World War II formed significant landmarks in the history of
Indian Pharmaceutical Industry, which is now nearly a century old.
After independence, a number of foreign companies set up manufacturing units in
India and today there are around 6000 large, medium and small companies, the
competition among them being very severe.
The second chapter explains the profile of Apollo Hospitals Enterprise
Ltd, about the pharmacy and activities.
The third chapter deals with the concept.
The fourth chapter deals with data collection and data analysis.
The fifth chapter deals with Findings, suggestions and conclusions.
17
CHAPTER - II
COMPANY PROFILE
18
CHAPTER - II
2.1. COMPANY PROFILE
The Apollo Hospitals Group has been recognized as the ‘Architect of Modern
Healthcare’ in India.
Since it was incorporated as a Public Limited Company in the year 1979,
promoted by Dr. Prathap C. Reddy, Executive Chairman. Its resource management and
able deployment of technology and knowledge in the service of mankind has brought
Apollo Hospitals national and international recognition and acceptance. The Apollo
Group of Hospitals is an integrated healthcare provider today.
Some Salient Facts:
i. Established of the first corporate hospital in Chennai (Madras) in 1983
ii. The single largest private hospital group in Asia today
iii. Several nations in the Asian subcontinent receive healthcare through
its 35 hospitals and 6400 hospital beds
The Government of India declared Apollo Hospitals, Chennai, as a "Center of
Excellence" and the Indraprastha Apollo Hospitals, Delhi, is amongst the largest
corporate hospitals in the region
19
Since it was set up in 1983 as the first corporate hospital in Chennai,
Apollo Hospitals has marked important milestones in healthcare, and pioneered growth in
several areas.
i. Was the first to set up a health insurance administration company in India
ii. Was the first provider to introduce preventive healthcare packages in India
iii. Was the first to perform liver, multi-organ and cord blood transplants in
India
iv. Was the first Indian hospital to introduce newer techniques in coronary
angioplasty, stereotactic radiotherapy and radio-surgery (for CNS tumors)
v. It has the largest as well as one of the most sophisticated sleep laboratories
in the world.
vi. It has pioneered orthopedic procedures like total knee replacement and the
Illizarov procedure in India
Apollo in the Delivery of Clinical Care:
Over 750,000 major surgeries and over 10, 00,000 minor surgical procedures have
been performed till 2003 at Apollo. These procedures include cardio thoracic, neurology,
and gastrointestinal, orthopaedic, renal, obstetric, ENT, opthalmology, dental, plastic,
cosmetic and tumour surgeries. Apollo strives to use minimally invasive and micro-
vascular techniques with success rates on par with international standards.
i. Over 49,000 cardiac surgeries performed with a 98.5% success-rate
ii. Over 130 successful bone marrow transplants
iii. Over 9400 renal transplants
20
iv. Over 2,00,000 angiograms, 16,200 angioplasties (PTCA) and 3500 mitral
balloon valvuloplasties performed
v. Apollo performs over 35,000 opthalmic surgical procedures annually
(Sankara Nethralaya, Apollo's partner, accounts for over 30,000 surgeries)
vi. Over 4000 specialists and super-specialists and 3000 medical officers
spanning 53 clinical departments of in-patient care, work at Apollo
vii. An employee strength of over 15,000 highly motivated and dedicated
professionals provides the highest quality of patient-focused service at
Apollo. This includes over 2500 employees in various administrative
What distinguishes the Apollo Hospitals Group is effective resource management
and able deployment of technology and knowledge to the service of mankind.
Mission began with the establishment of the first corporate hospital in Chennai in
1983. Today we have Apollo Hospitals in several Indian cities, and have extended our
reach to all regions of the country.
2.1.1. GROUP OPERATIONAL HIGHLIGHTS
Managed hospitals
Managing over 1,900 beds at different centers.
A five-fold increase is planned and being executed over the next 3 years.
21
Apollo Health and Lifestyle Clinics
They have opened franchisee neighborhood clinics to improve penetration and
reach.
30 clinics have been set up.
Pharmacy operations
They have over 120 owned and franchisee outlets.
Managed Care
Our corporate health plans and packages help facilitate the employee healthcare
needs of large private and public sector corporations.
Family Health Plan
They have the largest TPA in India.
Our customer base will cross 20 million by 2010.
Global Presence
Today Apollo has a presence in Sri Lanka, Bangladesh, the UAE, Nepal, Ghana,
Nigeria, the UK and the Kingdom of Saudi Arabia.
Apollo’s capabilities have received international acclaim resulting in the replication of its
Indian models at international locations.
22
The Apollo group is also in talks with private healthcare groups and government
authorities in Nigeria, South Africa, Tanzania, Mauritius, Yemen, Muscat, Bahrain,
Vietnam, Malaysia, Thailand and other neighboring countries to establish its presence
2.2. ABOUT THE COMPANY:
Apollo Pharmacy began operations in 1983 as a small facility to serve patients of
the newly established corporate Apollo Hospital, Madras. Located within the premises of
Apollo Hospitals, the Pharmacy, which conformed to international pharmaceutical
service standards, was an immediate success, with turnover touch in Rs. 42 Lakhs in the
year of inception.
Apollo Hospitals (hereinafter referred to as "APOLLO") started the pharmacy
operation two decades ago had grown into a mammoth chain of pharmacy stores of
almost one hundred in India, most of them servicing 24 hours per day on all days, with
delivery system.
Today, Apollo Pharmacy has become the largest Chain of Pharmacies in India,
with the current turnover of 170 crores in 2002-2003. The projection of 200 crores in the
year 2003-2004. The name Apollo Pharmacy is synonymous with round-the-clock
service, ready availability of all drugs, competitive prices and assured quality.
Apollo Pharmacy deals with the entire spectrum of pharmaceuticals and drugs.
Vaccines, Sera, Imported Medicines, Anti Toxins and Immunological Products. Besides
23
the Pharmacy also stocks surgical and life style products (Cosmetics, Health foods and
herbal drugs).
Headquartered in Chennai, Apollo Pharmacy has branches in Hyderabad, New
Delhi, Mumbai, Coimbatore, Salem, Ambur, Trichy, Kancheepuram, Vellore, Bangalore,
Mysore, Tirupathi, Vizag, Bhopal, Ahmadabad, Calcutta, Raichur and Aragonda and in
the neighborhood country Srilanka. Apollo Pharmacies are all "walk-in" air-conditioned
outlets, manned by qualified pharmacists with expertise in handling prescriptions and
dispensing medicines. As the Pharmacy deals with the entire spectrum of drugs, being the
largest chain of pharmacies in the India, the service is consistently of very high standard.
The primary reason for the success of Apollo Pharmacy is the precision of operations and
inventory control.
Computerized stock and inventory control systems ensure control at every stage
viz. stock receipt, inspection, stock issue and returns, invoicing, collection, accounting
and settlement of suppliers on time. Everyday stocks are checked and updated on the
inventory management system. The overall control is centralized.
Qualified Pharmacists man the counters, assisted by Pharmacy Aides, Data Entry
Operators and Cashiers on a predetermined basis so that at no time a pharmacy counter
remains unattended. Regular training Programs keep the personnel motivated.
There is already a process in place to secure the ISO 9000 certification. All these
have made Apollo Pharmacy the 170 Crore company it is today, with 142 across the
country.
24
PHARMACIES ARE CLASSIFIED UNDER FOUR CATEGORIES:
i. Hospital Based Pharmacies (HBP)
ii. Clinic Based Pharmacies (CBP)
iii. Stand Alone Pharmacies (SAP)
iv. IOC Retail Outlets (IOC)
While the first three categories were self established, regarding IOC retail outlets, there is
a running agreement with Indian Oil Corporation Limited (IOC) for dissemination of
Apollo Pharmacy product through the "Convenio" stores in selected IOCL Retail Outlets
The HBPs which are in the pipeline include Ahmedabad and across the world. Further
almost about 40 different SAPs in the immediate future would be established at various
locations all over INDIA. These are all addition to the existing pharmacies.
TABLE: I
TOTAL APOLLO PHARMACIES
YEAR NO.OF.PHARMACIES
2005-2006 206
2006-2007 310
2007-2008 420
2008-2009 661
CHART: I
Total Apollo Pharmacies
25
No.of.pharmacies
APOLLO PHARMACY
700
600
500
400
300
200
100
0
2005- 2006- 2007- 2008-
2006 2007 2008 2009
yea r
TABLE: II
CATEGORY WISE APOLLO PHARMACIES
Category HBP CBP SAP Total

Nos.
No. Of 19 30 612 661
Pharmacies
CHART: II
26
Category Wise Apollo Pharmacies
Hospital Based
Pharmacies
Clinic Based
Pharmacies
Standalone
Pharmacies
Careers:
Apollo Pharmacy has transformed the concept of a Medical Shop, into a
professionally structured and managed organization. Quality Service to customers is our
prime focus, and this is done through Human Resources.
The work environment at Apollo Pharmacy is open and informal. People are free to
27
innovative with ideas that benefit the organization and our customers. Ongoing training
enables new leadership skills to conquer newer challenges. Team members create a
unique pride of ownership among themselves, which is how the organization has rapidly
grown.
At Apollo Pharmacy, attitude towards one's job is as important as qualifications. Hence
people with the right attitude are constantly moved up to higher positions. We believe in
giving employees an opportunity to get to know themselves, help them to build upon
their strengths and develop on the areas needing more attention.
Apollo Pharmacy attracts the best talent from various fields and is an equal opportunity
employer.
Advantage:
Quality
Quality is the cornerstone of our existence. We have gained experience in
pharmacy operations management over the last 2 decades and are committed to
delivering best service in the industry. At Apollo Pharmacy, we believe in adhering to the
highest quality standards, while serving our consumers.
Genuine medicines
We assure delivery of only genuine medicines to our customers.
We refill your prescriptions
For patients who consume medicines on regular basis we provide prescription
refilling service on request. Sign up for refill service details.
28
24-hour customer support
Apollo Pharmacy caters to a large consumer base, through its 24-hour
pharmacy services.
Computerized system
The entire supply chain mechanism is computerized; hence redundancies are
managed effectively. The system also discloses expiry date and batch numbers for
medicines.
International quality certification
Apollo Pharmacy is JCI accredited *
Value added services:
We believe in offering its customers unparalleled retail experience. To
enhance our customer's experience Apollo Pharmacy has introduced schemes like free
health insurance, free delivery of prescriptions, round-the-clock service and more.
24-hour service
Apollo Pharmacy is geared up to cater to the Medication needs of our
customers round the clock. Our 24-hour pharmacies dispense service benefits to our
customers when it is most needed.
Friendly pharmacist
Every Apollo Pharmacy outlet is manned by our own competent
pharmacist, who's always there to help customers with their medication needs.
29
Free Reminder Service
We give a friendly reminder call about your medication as per your request.
Should you wish to sign up for reminder service, do fill in your details.
Helpline services
For any queries related to your medication, please call our helpline service
numbers in any location across the country.
Free health camps
We conduct free health camps at our network of Apollo Pharmacy in the
country. Contact your nearest Apollo Pharmacy outlet for details.
Free Health Insurance
Free Health Insurance of Rs.20, 000/-, once your purchases cross Rs.6, 000/-
a year.
Health newsletters
Free Health Newsletters for patients.
SERVICES PROVIDED BY THE APOLLO PHARMACIES
i. Facility Quality Assurance
ii. Free Home Delivery (10a.m - 6p.m)
iii. Optimal Maintenance of cold chain
iv. 24hrs help line - 52023784 / 52068474
v. Other value added services
vi. Prescriptions attended by trained Pharmacists
30
vii. Availability of other lifestyle products
viii. Medical camps at regular intervals
ix. Doctor's Consultation available.
CHAPTER – III
31
ABOUT THE CONCEPT
CHAPTER – III
3.1. ABOUT THE CONCEPT:
Cost:
The word cost has a wide variety of meaning. In common use, the word cost
means price. Let it be assumed that cost is not the same as price. In management terms,
cost refers to the expenditure and not the price. It also refers to something that must be
sacrificed to obtain a particular thing. Thus cost is defined as “the amount of expenditure
(actual or national) incurred on or attributable to a given thing.” It is also defined as “the
amount measured in money of cash expended or other property transferred, capital stock
issued, service performed, or a liability incurred, in consideration of goods or services
received or to be received.” Cost is used in three different senses as the expected cost of a
particular action, the cost of something purchased, and the cost of attaining some end,
i.e., the sacrifice actually made to attain it.
THE INCOME STATEMENT:
The income statement, sometimes called on earnings statement, reports
the profitability of a business organization for a stated period of time. In accounting,
32
profitability is measured for a period of time, such as a month or year, by comparing the
revenues generated with the expenses incurred to produce these revenues.
Revenues are the inflows of assets (such as cash) resulting from the sale
of products or the rendering of services to customers. Expenses are costs incurred to
produce revenues. Expenses are measured by the assets surrendered or consumed in
servicing customers. If the revenues of a period exceed the expenses of the same period,
net income results. Net income is often referred to as the earnings of the company. If
expenses exceed, the business has a net loss, and it has operated unprofitability.
OBJECTIVE OF FINANCIAL STATEMENT ANALYSIS:
i. Financial statement analysis consists of applying analytical tools and
techniques to financial statements and other relevant data to obtain useful
information. To state the relationships between data and trends in those
data that assess the company’s past performance and current financial
position. The information shows the results or consequences of prior
management decisions. In addition, the information is used to predictions
that may have a direct effect on decisions made by many users of financial
statements.
ii. Present company investors and potential company investors are interested
in the future ability of a company to earn profits its profitability.
iii. Sometimes outside parties are interested in predicting a company’s
solvency rather than its profitability. Short term solvency is affected by the
liquidity of the company, which is the company’s state of processing
33
liquid assets, such as cash and other assets that will soon be converted to
cash. Since short-term debts must be paid soon, liquid assets must be
available for their payment. For example, a bank that is asked to extend a
90 day loan to a company would want to know the company’s projected
short term liquidity. Of course, the company’s predicted ability to repay
the 90 day loan is likely to be based, at least partially, on proven past
ability to pay off debts.
iv. Long term creditors are interested in a company’s long-term solvency,
which is usually determined by the relationship of a company’s assets to
its liabilities. Generally, a company is considered solvent when its assets
exceed its liabilities so that the company has a positive stockholders
equity. The larger the assets are in relation to the liabilities, the greater the
long-term solvency of the company, since the company’s assets could
shrink significantly before its liabilities would exceed its assets and
destroy the company’s solvency.
Reorder point sub system:
If the replenishment system is efficient then less delivery time stock will be
required.
There are some objectives while managing the inventory control,
i. To avoid lost sales
ii. To gain quantity discounts
34
iii. To reduce ordering costs
i. To avoid lost sales: If the firms do not hold adequate amount of goods, then there is
a probability that the firm might lose some business.
ii. To gain quantity discounts: Many suppliers provide goods at reduced prices if the
firm orders for a large amount of goods.
iii. To reduce ordering costs: When the firm places fewer orders of large quantities,
the ordering costs will reduce.
35
CHAPTER – IV
36
DATA COLLECTION & DATA ANALYSIS
CHAPTER - IV
4.1. DATA COLLECTION & DATA ANALYSIS:
i. The project trainee selects the 5 Apollo pharmacies in Chennai.
ii. Next the project trainee has study on heads of expenses and measures of Cost
analysis for financial performance at Apollo pharmacy.
iii. The data is analyzed which has been collected
from Apollo pharmacies at kilpauk1, No: 475-B Kilpauk Garden Road,
Chennai - 600 010, Phone No: 26461224. Nungambakkam2, No: 309,
Valluvar Kottam High Road, Chennai - 600034, PhoneNo: 52061038. Sastri
Nagar3, M.G.Road, opp.(Adyar Anantha Bhavan), Adyar, Chennai – 600 020.
Ashok Nagar4, No: 6, 9th Avenue Ashok Nagar, Chennai - 600083. Airport 5, -
CHENNAI No: 27, Kamaraj Domestic Terminal Chennai, International
Airport Division Chennai - 600 027.
1
Kilpauk pharmacy
2
Nungambakkam pharmacy
3
Sastri Nagar pharmacy
4
Ashok Nagar pharmacy
5
Airport pharmacy
37
TABLE: III
Income and expenditure statement of Apollo pharmacy at AIRPORT

For the year ended
Expenditure 2005-2006 2006-2007 2007-2008 2008-2009
Salaries & Wages 204453 205464 460904 584975

Statutory Benefit 26492.42 26500.42 47810.57 60760
Non - Statutory Benefit 18007.2 18200.2 92173.2 50588.5
Electricity Charges 59729 60729 92645 98632

Office Maintenance 52011.5 52111.5 22656 16343
Telephone Charges 46831 36831 45871 51734
Printing & Stationary 20495 19590 18892 42447
Traveling & 15717.65 16700.25 57485 67519.45
Conveyance
Sales Promotion & 2441.45 3020 5576 21801
Advertising Expenses
Repairs & Maintenance 20516.5 19500.5 5220.6 12360
Others
Professional Charges 6387.6 6800.3 11970.99 4495
Others 81122.06 85120.69 16028.95 11579.75
Rent 266183 266183 344553 409113
Grand Total 820387.4 816750.86 1221786 1432348
38
TABLE: IV
Income and expenditure statement of Apollo pharmacy at ASHOK

NAGAR For the year ended
Expenditure 2005-2006 2006-2007 2007-2008 2008-2009
Salaries & Wages 176616 177616 389264 463437

Non - Statutory 36088.85 36288.85 76379 36474.6
Benefit
Electricity Charges 79740.3 80740.3 103688 91138
Office Maintenance 37182.75 37382.75 31858.35 25623.5
Telephone Charges 51141.97 51041.97 66631.91 38740.24
Printing & Stationary 15441 15440 34024.6 25880.5
Traveling & 1830 2950 9474 10761

Conveyance
Sales Promotion & 4533.1 4300 1416.7
Repairs & 14231.5 13210.23 12144 11096.5
Maintenance Others
Professional Charges 6489.6 6910.6 41011.8 10674.8
Others 5748.93 6200.3 14727.84 34703.58
Rent 90000 90000 103500 103500
Grand Total 538058.4 541495.42 921656.4 899882.7
39
TABLE: V
Income and expenditure statement of Apollo pharmacy at KILPAUK

For the year ended
Expenditure 2005-2006 2006-2007 2007-2008 2008-2009
Salaries & Wages 256005 266005 443460 409077

Non - Statutory 46635 46685 69510.9 36053.26
Benefit
Office Maintenance 113628 113628 56059.5 29092.4
Printing & Stationary 32402 33010 36607.5 33859
Traveling & 5200 11500 4306 4215

Conveyance
Sales Promotion & 3231.6 4000 13285.7 33353
Repairs & 14232 12020 12523.2 34309
Maintenance Others
Professional Charges 4887.6 5010.3 12736 6179.4
Others 8518.62 8710.23 19835.76 24591.74

Rent 155036 155036 299828 329633
Grand Total 792357.7 805312.38 1143415 1126529
40
TABLE: VI
Income and expenditure statement of Apollo pharmacy at

NUNGAMBAKKAM For the year ended
Expenditure 2005-2006 2006-2007 2007-2008 2008-2009
Salaries & Wages 209533 300533 482162 600324

Non - Statutory 70733.1 70633.1 153693.65 155483.75
Benefit
Office Maintenance 103462 103462 69847.05 31527.35
Telephone Charges 57174.44 56874.44 54998.67 100519.67
Printing & Stationary 21091.85 21020.5 32405.05 46696.35
Traveling & 1729 8880 3670 5169

Conveyance
Sales Promotion & 10223.95 8000 22307.8 29153.6
Repairs & 31175 29950.2 12736.5 13898
Maintenance Others
Professional Charges 12489.6 12700.8 12920.99 14664.8
Others 33426.69 33720.3 24678.81 29956.84
Rent 120000 120000 120000 120000
Grand Total 783257.1 878792.77 1158402 1338883
41
TABLE: VII
Income and expenditure statement of Apollo pharmacy at SASTRI

NAGAR For the year ended
Expenditure 2005-2006 2006-2007 2007-2008 2008-2009
Salaries & Wages 240764 245764 268776 504462

Non - Statutory 70410.8 70510.8 54790.95 160632.4
Benefit
Office Maintenance 94700.2 94900.2 46504.8 31969.85
Printing & Stationary 36240.5 36340.5 21152 42101
Traveling & 18151 11510.25 3655 6725

Conveyance
Sales Promotion & 9962.15 9000 10585.75 26252.83
Repairs & 3664 3250.6 3763.1 13333.58
Maintenance Others
Professional Charges 5387.6 5500 21786.2 7221.4
Others 37097.87 37730.25 16699.2 31196.13

Rent 175392 175392 209988 232488
Grand Total 884371.4 877699.89 844382.6 1285255
42
TABLE: VIII
DATA COLLECTION FROM 5 APOLLO PHARMACIES TO DO GROSS

PROFIT ANALYSIS
Branch name Particulars 2005-2006 2006-2007 2007-2008 2008-2009
Airport Sales 4782870.55 4921574.8 5753489.94 5765790.22

Ashok Nagar ,, 5300538.3 5565565.22 7666577.81 8143262.96
Kilpauk ,, 6613604.55 6944285.78 6485596.68 7117389.67
Nungambakkam ,, 6655335.35 6988102.12 6578753.94 7952994.93
Sastri Nagar ,, 9083529.28 9537706.74 7836725.03 8828413.17
Airport Cost of sales 3693033.41 3693033.41 4517689.09 4916468.96

Ashok Nagar ,, 4178813.39 4178813.39 5935602.01 7146314.46
Kilpauk ,, 5289373.95 5289373.95 5077971.55 6191589.29
Nungambakkam ,, 5322554.87 5322554.87 5174559.06 6804481.61
Sastri Nagar ,, 7363756.6 7263756.6 6093162.83 7670998.66
Gross profit = sales - cost of sales
Gross profit % = Gross profit / Sales *100
43
Calculation of Gross Profit in AIRPORT PHARMACY
2005-2006:
= 4782870.55 - 3693033.41
= Rs.1089837.14
= 1089837.14 / 4782870.55 * 100
= 22.79 %
2006-2007:
Gross profit = 4921574.8 – 3693033.41
= Rs.1228540.39
Gross profit % = 1228540.39 / 4921574 *100
= 24.96 %
2007-2008:
Gross profit = 5753489.94 - 4517689.09

= Rs.1235800.85
Gross profit % = 1235800.85 / 5753489.94 * 100
= 21.48 %
2008-2009:
44
Gross profit = 5765790.22 - 4916468.96
= Rs.849321.26
Gross profit % = 849321.26 / 5765790.22 * 100
= 14.73 %
TABLE: IX
GROSS PROFIT OF APOLLO PHARMACY AT AIRPORT
BRANCH NAME YEAR GROSS PROFIT

%
Airport 2005-2006 22.79
,, 2006-2007 24.96
,, 2007-2008 21.48
,, 2008-2009 14.73
CHART: III
Gross Profit of Apollo Pharmacy at Airport
45
Airport
30
24.96
25 22.79 21.48
Gross Profit %
20
14.73
15
10
5
0
2005- 2006- 2007- 2008-
2006 2007 2008 2009
year
Calculation of Gross Profit in ASHOK NAGAR PHARMACY
2005-2006:
= 5300538.3 - 4178813.39
= Rs.1121724.91
= 1121724.91 / 5300538.3 *100
= 21.16 %
2006-2007:
Gross profit = 5565565.22 – 4178813.39
= Rs.1386751.83
Gross profit % = 1386751.83 - 5565565.22 *100
= 24.92 %
46
2007-2008:
Gross profit = 7666577.81 - 5935602.01
= Rs.1730975.8
Gross profit % = 1730975.8 / 7666577.81 *100
= 22.58 %
2008-2009:
Gross profit = 8143262.96 - 7146314.46

= Rs.996948.5
Gross profit % = 996948.5 / 8143262.96 * 100
= 12.24 %
TABLE: X
GROSS PROFIT OF APOLLO PHARMACY AT ASHOK NAGAR

%
Ashok Nagar 2005-2006 21.16
,, 2006-2007 24.92
,, 2007-2008 22.58
,, 2008-2009 12.24
CHART: IV
Gross Profit of Apollo Pharmacy at Ashok Nagar
47
Ashok Nagar
30
24.92
25 22.58
21.16
Gross Profit %
20
15 12.24
10
5
0
2005- 2006- 2007- 2008-
2006 2007 2008 2009
year
Calculation of Gross Profit in KILPAUK PHARMACY
2005-2006:
= 6613604.55 - 5289373.95
= Rs.1324230.6
= 1324230.6 / 6613604.55 *100
= 20.02 %
2006-2007:
Gross profit = 6944285.78 – 5289373.95 *100
= Rs.1654910.83
Gross profit % = 1654910.83 / 6944285.78 *100
= 23.83 %
48
2007-2008:
Gross profit = 6485596.68 – 5077971.55
= Rs.1407625.13
Gross profit % = 1407625.13 / 6485596.68 * 100
= 21.70 %
2008-2009:
Gross profit = 7117389.67 – 6191589.29
= Rs.925800.38
Gross profit % = 925800.38 / 7117389.67 *100
= 13.01 %
TABLE: XI
GROSS PROFIT OF APOLLO PHARMACY AT KILPAUK

%
Kilpauk 2005-2006 20.02
,, 2006-2007 23.83
,, 2007-2008 21.70
,, 2008-2009 13.01
CHART: V
Gross Profit of Apollo Pharmacy at Kilpauk
49
Kilpauk
30
23.83
25 21.7
Gross Profit %
20.02
20
15 13.01
10
5
0
2005- 2006- 2007- 2008-
2006 2007 2008 2009
year
Calculation of Gross Profit in NUNGAMBAKKAM PHARMACY
2005-2006:
= 6655335.35 - 5322554.87
= Rs.1332780.48

= 1332780.48 / 6655335.35 *100
= 20.03 %
2006-2007:
Gross profit = 6988102.12 – 5322554.87
= Rs.1665547.25
Gross profit % = 1665547.25 / 6988102.12 *100
= 23.83 %
50
2007-2008:
Gross profit = 6585596.68 – 5174559.06
= Rs.1404194.88
Gross profit % = 1404194.88 / 6585596.68 *100
= 21.34 %
2008-2009:
Gross profit = 7952994.93 – 6804481.61
= Rs.1148513.32
Gross profit % = 1148513.32 / 7952994.93 * 100
= 14.44 %
TABLE: XII
GROSS PROFIT OF APOLLO PHARMACY AT NUNGAMBAKKAM

%
Nungambakkam 2005-2006 20.03
,, 2006-2007 23.83
,, 2007-2008 21.34
,, 2008-2009 14.44
CHART: VI
Gross Profit of Apollo Pharmacy at Nungambakkam
51
Nungambakkam
30
23.83
Gross Profit %
25 21.34
20.03
20
14.44
15
10
5
0
2005- 2006- 2007- 2008-
2006 2007 2008 2009
year
Calculation of Gross Profit in SASTRI NAGAR PHARMACY
2005-2006:
= 9083529.28 - 7363756.6
= Rs.1719772.68
= 1719772.68 / 9083529.28 *100
= 18.93 %
2006-2007:
Gross profit = 9537706.74 – 7263756.6
= Rs.2273949.14
Gross profit % = 2273949.14 / 9537706.74 *100
= 23.84 %
52
2007-2008:
Gross profit = 7836725.03 – 6093162.83
= Rs.1743562.2
Gross profit % = 1743562.2 / 7836725.03 * 100
= 22.25 %
2008-2009:
Gross profit = 8828413.17 – 7670998.66
= Rs.1157414.51
Gross profit % = 1157414.51 / 8828413.17 * 100
= 13.11 %
TABLE: XIII
GROSS PROFIT OF APOLLO PHARMACY AT SASTRI NAGAR

%
Sastri Nagar 2005-2006 18.93
,, 2006-2007 23.84
,, 2007-2008 22.25
,, 2008-2009 13.11
CHART: VII
Gross Profit of Apollo Pharmacy at Sastri Nagar
53
Sastri Nagar
30
23.84
25 22.25
Gross Profit % 18.93
20
15 13.11
10
5
0
2005- 2006- 2007- 2008-
2006 2007 2008 2009
year
TABLE: XIV
DATA COLLECTION FROM 5 APOLLO PHARMACIES TO DO NET PROFIT
ANALYSIS
Bra Particulars 2005- 2006- 2007- 2008-2009

nch name 2006 2007 2008
Airport Sales 4782870.55 4921574.8 5753489.94 5765790.22

Ashok Nagar ,, 5300538.3 5565565.22 7666577.81 8143262.96
Kilpauk ,, 6613604.55 6944285.78 6485596.68 7117389.67
Nungambakkam ,, 6655335.35 6988102.12 6578753.94 7952994.93
Sastri Nagar ,, 9083529.28 9537706.74 7836725.03 8828413.17
Airport Gross profit 1089837.14 1228540.39 1235800.85 849321.26

Ashok Nagar ,, 1121724.91 1386751.83 1730975.8 996948.5
Kilpauk ,, 1324230.6 1654910.83 1407625.13 925800.38
Nungambakkam ,, 1332780.48 1665547.25 1404194.88 1148513.32
Sastri Nagar ,, 1719772.68 2273949.14 1743562.2 1157414.51
Airport Employee costs 248952.62 250164.62 600887.77 696323.5
54
Ashok Nagar ,, 231719.27 233319.27 503179.16 547764.6
Kilpauk ,, 332063.85 342113.85 561473.48 488080.26
Nungambakkam ,, 311452.53 402652.53 684813.37 817466.75
Sastri Nagar ,, 339437.09 345537.09 343977.52 715030.4
Airport Administrative 571434.76 566586.24 620898.54 736024.2

costs and other
costs
Ashok Nagar ,, 306339.15 308176.15 418477.2 352118.12
Kilpauk ,, 460293.82 463198.53 581941.66 638448.54
Nungambakkam ,, 471804.53 476140.24 473588.87 521416.61
Sastri Nagar ,, 544934.32 532162.8 500405.05 570224.79
Net profit = Gross profit – Employee costs – Administrative costs and other costs
Net profit % = Net profit / sales * 100
Calculation of Net Profit in AIRPORT PHARMACY
2005-2006:
= 1089837.14 – 248952.62 – 571434.76
= Rs.269449.8
= 269449.8 / 4782870.55 *100
= 5.63 %
2006-2007:
Net profit = 1228540.39 – 250164.62 – 566586.24
= Rs.411789.5
55
Net profit % = 411789.5 / 4921574.8*100
= 8.37 %
2007-2008:
Net profit = 1235800.85 – 600887.77 – 620898.54
= Rs.14014.54
Net profit % = 14014.54 / 5753489.94*100
= 0.24 %
2008-2009:
Net profit = 849321.26 – 696323.5 – 736024.2
= Rs.-583026.44
Net profit % = -583026.44 / 5765790.22*100
= -10.11 %
TABLE: XV
NET PROFIT OF APOLLO PHARMACY AT AIRPORT
BRANCH NAME YEAR NET PROFIT

%
Airport 2005-2006 5.63
,, 2006-2007 8.37
,, 2007-2008 0.24
,, 2008-2009 -10.11
CHART: VIII
Net Profit of Apollo Pharmacy at Airport
56
Airport
10 8.37
5.63
5
0.24
Net Profit %
0
2005- 2006- 2007- 2008-
-5 2006 2007 2008 2009
-10
-10.11
-15
year
Calculation of Net Profit in ASHOK NAGAR PHARMACY
2005-2006:
= 1121724.91 – 231719.27 – 306339.15
= Rs.583666.5
= 583666.5 / 5300538.3 *100
= 11.01 %
2006-2007:
Net profit = 1386751.83 – 233319.27 – 308176.15
= Rs.845256.4
Net profit % = 845256.4 / 5565565.22 *100
57
= 15.19 %
2007-2008:
Net profit = 1730975.8 – 503179.16 – 418477.2
= Rs.809319.44
Net profit % = 809319.44 / 7666577.81 * 100
= 10.56 %
2008-2009:
Net profit = 996948.5 – 547764.6 – 352118.12
= Rs.97065.78
Net profit % = 97065.78 / 8143262.96 * 100
= 1.92 %
TABLE: XVI
NET PROFIT OF APOLLO PHARMACY AT ASHOK NAGAR

%
ASHOK NAGAR 2005-2006 11.01
,, 2006-2007 15.19
,, 2007-2008 10.56
,, 2008-2009 1.92
CHART: IX
Net Profit of Apollo Pharmacy at Ashok Nagar
58
Ashok Nagar
16 15.19
14
Net Profit % 12 11.01 10.56
10
8
6
4 1.92
2
0
2005- 2006- 2007- 2008-
2006 2007 2008 2009
year
Calculation of Net Profit in KILPAUK PHARMACY
2005-2006:
= 1324230.6 – 332063.85 – 460293.82
= Rs.531872.9
= 531872.9 / 6613604.55 *100
= 8.04 %
2006-2007:
Net profit = 1654910.83 – 342113.85 – 463198.53
= Rs.849598.4
59
Net profit % = 849598.4 / 6944285.78
= 12.23 %
2007-2008:
Net profit = 1407625.13 – 561473.48 – 581941.66
= Rs.264209.99
Net profit % = 264209.99 / 6485596.68 * 100
= 4.07 %
2008-2009:
Net profit = 925800.38 – 488080.26 – 638448.54
= Rs.-200728.42
Net profit % = -200728.42 / 7117389.67 * 100
= -2.82 %
TABLE: XVII
NET PROFIT OF APOLLO PHARMACY AT KILPAUK

%
Kilpauk 2005-2006 8.04
,, 2006-2007 12.23
,, 2007-2008 4.07
,, 2008-2009 -2.82
CHART: X
60
Net Profit of Apollo Pharmacy at Kilpauk
Kilpauk
14 12.23
12
10 8.04
Net Profit %
8
6 4.07
4
2
0
-2 2005- 2006- 2007- 2008-
-4 2006 2007 2008 2009
-2.82
year
Calculation of Net Profit in NUNGAMBAKKAM PHARMACY
2005-2006:
= 1332780.48 – 311452.53 – 471804.53
= Rs.549523.4
= 549523.4 / 6655335.35 *100
= 8.26 %
2006-2007:
Net profit = 1665547.25 – 402652.53 – 476140.24
= Rs.786754.5
Net profit % = 786754.5 / 6988102.12 *100
61
= 11.26 %
2007-2008:
Net profit = 1404194.88 – 684813.37 – 473588.87
= Rs.245792.64
Net profit % = 245792.64 / 6578753.94 * 100
= 3.74 %
2008-2009:
Net profit = 1148513.32 – 817466.75 – 521416.61
= Rs.-190370.04
Net profit % = -190370.04 / 7952994.93 * 100
= -2.39 %
TABLE: XVIII
NET PROFIT OF APOLLO PHARMACY AT NUNGAMBAKKAM

%
Nungambakkam 2005-2006 8.26
,, 2006-2007 11.26
,, 2007-2008 3.74
,, 2008-2009 -2.39
CHART: XI
Net Profit of Apollo Pharmacy at Nungambakkam
62
Nungambakkam
12 11.26
10 8.26
8
Net Profit %
6
3.74
4
2
0
-2 2005- 2006- 2007- 2008-
2006 2007 2008 2009
-2.39
-4
year
Calculation of Net Profit in SASTRI NAGAR PHARMACY
2005-2006:
= 1719772.68 – 339437.09 – 544934.32
= Rs.835401.3
= 835401.3 / 9083529.28 *100
= 9.20 %
2006-2007:
Net profit = 2273949.14 – 345537.09 – 532162.8
= Rs.1396249
Net profit % = 1396249 / 9537706.74 *100
63
= 14.64 %
2007-2008:
Net profit = 1743562.2 – 343977.52 – 500405.05
= Rs.899179.63
Net profit % = 899179.63 / 7836725.03 * 100
= 11.47 %
2008-2009:
Net profit = 1157414.51 – 715030.4 -570224.79
= Rs.-127840.68
Net profit % = -127840.68 / 8828413.17 * 100
= -1.45 %
TABLE: XIX
NET PROFIT OF APOLLO PHARMACY AT SASTRI NAGAR

%
Sastri Nagar 2005-2006 9.20
,, 2006-2007 14.64
,, 2007-2008 11.47
,, 2008-2009 -1.45
CHART: XII
Net Profit of Apollo Pharmacy at Sastri Nagar
64
Sastri Nagar
16 14.64
14
11.47
12
9.2
Net Profit %
10
8
6
4
2
0
-2 2005- 2006- 2007- 2008-
-1.45
-4 2006 2007 2008 2009
year
Analysis for Apollo stores and outside purchases
TABLE: XX
PURCHASES ON 2007-2008
BRANCH NAME TOTAL PURCHASES OUTSIDE

COST OF FROM % PURCHASES %
SALES APOLLO (Other
STORES pharmacy)
Airport 4517689.09 4274777.91 94.62 242911.18 5.38
Ashok Nagar 5935602.01 5660043.38 95.36 275558.63 4.64
Kilpauk 5077971.55 4787021.12 92.51 387537.94 7.49
Nungambakkam 5174559.06 5931200.22 97.34 161962.61 2.66
Sastri Nagar 6093162.83 4729352.21 93.13 348619.34 6.87
TABLE: XXI
PURCHASES ON 2008-2009
BRANCH NAME COST OF PURCHASES OUTSIDE

SALES FROM % PURCHASES %
APOLLO (other
65
STORES pharmacy)
Airport 4916468.96 4537609.3 92.29 378859.66 7.71
Ashok Nagar 7146314.46 6395756.26 89.5 750558.20 10.5
Kilpauk 6191589.29 5848678.2 85.74 955803.41 14.3
Nungambakkam 6804481.61 7289948.6 85.95 381050.06 14
Sastri Nagar 7670998.66 5308804.37 95.03 882784.92 4.97
BELOW CHARTS REPRESENTS OUTSIDE PURCHASES %
CHART: XIII
Outside purchases of Apollo pharmacy at Airport
Airport
OUTSIDE PURCHASES %
9
7.71
8
7
6 5.38
5
4
3
2
1
0
2007- 2008-
2008 2009
year
CHART: XIV
66
Outside purchases of Apollo pharmacy at Ashok Nagar
Ashok Nagar
OUTSIDE PURCHASES %
12
10.5
10
6 4.64
4
0
2007- 2008-
2008 2009
year
CHART: XV
Outside purchases of Apollo pharmacy at Kipauk
Kilpauk
16 14.3
OUTSIDE PURCHASES %
14
12
10
7.49
8
6
4
2
0
2007- 2008-
2008 2009
year
CHART: XVI
Outside purchases of Apollo pharmacy at Nungambakkam
67
Nungambakkam
16
OUTSIDE PURCHASES %
14
14
12
10
8
6
4 2.66
2
0
2007- 2008-
2008 2009
year
CHART: XVII: Outside purchases of Apollo pharmacy at Sastri Nagar
Sastri Nagar
8
OUTSIDE PURCHASES %
6.87
7
6
4.97
5
4
3
2
1
0
2007- 2008-
2008 2009
year
68
69
CHAPTER – V
FINDINGS, SUGGESTIONS AND
CONCLUSION
CHAPTER - V
5.1. FINDINGS:
The project trainee selects the 5 Apollo pharmacies in Chennai.
Next the project trainee has study on heads of expenses and measures of Cost
analysis for financial performance at Apollo pharmacy. So, the project trainee has
found out,
i. The required No. of items are not fully delivered to the branches and it is
adjusted with stock in hand and delivered at reduced size, some of the items
not in hand is delivered as postponed it will affect the sale of the particular
branch.
70
ii. The purchase and issue is run in the daily manner will increase the Operating
cost and Transportation cost.
iii. The excess out side purchase made by the branches leads to minimize the
profit even though the sale is more.
iv. The Reorder Level fixed to the each branches should be examined
periodically.
v. The above 5 pharmacy Income and Expenditure statement has the year by
year changing the expenditure as well as increase the no. of pharmacies. But 5
pharmacy has the financial performance is not a good.
vi. 2005-2006 and 2006-2007 has the financial performance is good. Then 2007-
2008 and 2008-2009 has the financial performance is not a good. Because, no.
of. Pharmacies were increase as well as outside purchases are more in 2007-
2008 and 2008-2009. So the profit is low.
vii. The pharmacies were purchase from outside was 5 to 15%. This 5 to 15%
outside purchases for cost of sales. But this outside purchases they have not
earned a profit also the transportation cost and conveyance were increased.
viii. Apollo was created a good image on the customer’s minds. But, why they
spent for advertisement costs.
ix. Year by year there is an increase in the telephone charges.
5.2. SUGGESTIONS:
The trainee suggests the following to the company’s better functioning:

i. The integration of inventory system currently followed by the organization is
not efficient to balance the demand and issues of the branches. So the
71
organization can be reduced cost in through better integration of Inventory
Control System through internet based applications. And it will be easy to
manage all the operation of the branches as well as cost.
ii. The organization can make the bulk purchases and they should avoid outside
purchases.
iii. Avoid the outside purchases as well as the organization can distribute the
inventory to branches in effectively for demand itself. So they can maximize
the efficiency of the sales personnel and also the purchase cost (order cost) is
also reduced.
iv. The organization can purchase their own or lease buildings they avoid the
rent.
v. The organization can purchase the own vehicles they have reduce the
transportation cost.
vi. Year by year there is an increase in the telephone charges. So avoid the
personal calls, and use the mails and SMS which will reduce the telephone
charges.
vii. Apollo was created a good image on the customer’s minds. So pharmacy can
reduce the advertisement costs. Because year by year sales was more.
viii. The above 5 pharmacy outside purchases they not earned a profit. Because
other pharmacy was earned a profit. But Apollo pharmacy not loses the
customer. So the Apollo pharmacy can make the pulk purchases they have
order cost is reduced, profit also more and customer also increases as well as
transportation cost and conveyance will decrease.
72
ix. The Apollo pharmacy follows the reorder point system is periodically. So
pharmacy can inform the stock level in daily basis to management. Because
the way easy to give the order to suppliers and supply the goods in pharmacy.
This time the apollo pharmacy have some benefits,
1. To avoid lost sales
2. To gain quantity discounts
3. To reduce ordering costs
5.3. CONCLUSION:
From the study the trainee has come out with the following conclusions:
i. From the study on cost Control System of the organization, even though it is
making the bulk purchases as well as avoid the outside purchases. So they have
effective sales in pharmacies.
ii. It can be reduced through better integration of Inventory Control System through
internet based applications and it will be easy to manage all the operation of the
branches.
iii. The organization may concentrate more on purchases from the companies
(suppliers) it will be more profitable as well as discounts also received in
purchase order.
73
iv. The pharmacies can reduce the unnecessary cost, advertisement costs and
transportation costs they have good financial performance.
BIBLIOGRAPHY
Books:
1. Roger H.Hermanson, James Don Edwards and L.Gayle Rayburn –
Financial Accounting – Second Edition – Year 2004-2005.
2. Jain S.P. and K.Narang, Cost Accounting, Kalyani publishers
3. Financial management - Second edition (2005 ICFAI university press)
4. Mr. Nithyanantham – Project – Inventory Control System – Distance
Education – Madurai Kamaraj University – Year 2006-2007
Web Sites:
1. http://www.apollopharmacy.in/advantage.html
2. http://www.apollopharmacy.in/locator.php
74
3. http://www.apollopharmacy.in/services.html
4. http://www.apollopharmacy.in/services.html
Annual Reports:
1. Apollo pharmacy - Income and Expenditure Statement on 2005-2006,
2006-2007, 2007-2008 and 2008-2009.
75

A Study On Heads of Expenses and Measures of Cost Analysis For Financial Performance at Apollo Pharmacy."

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A Study On Heads of Expenses and Measures of Cost Analysis For Financial Performance at Apollo Pharmacy."

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“A study on heads of expenses and measures of Cost

analysis for financial performance at Apollo Pharmacy.”

Fulfillment of the requirements of the award of the Degree of

Master of Business Administration

(Enrollment No: 08PMP0114914)

Under The Guidance Of

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

(Faculty, Cygmax Institute of Management Studies, Madurai)

Institute of Management Studies,

No 78Ramalinga Towers, TPK Road,

Andalpuram, Vasanth Nagar.

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

part of the candidate.

Signature of the Faculty Guide,

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

Faculty, Cygmax Institute of Management Studies,

Cygmax Institute of Management Studies,

STATEMENT BY THE CANDIDATE

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

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

suggestions and critical and constructive comments.

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

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

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

Certificate to accompany the project I

Statement by the candidate

1.2. Statement of problem 3

1.3. Relevance of the project to MBA 3

1.4. About the project 4

1.5. Need for the study 5

1.6. Scope of the study 6

1.7. Objective of the study 6-7

1.8. Period of study 7

1.9. Research methodology 7

1.10. Sampling design 7

1.11. Data processing 7

1.12. Statistical tools 8

1.13. Limitations of the study 8

1.14. Chapter scheme 8

2.1. Company profile 10-12

2.1.1. Group Operational Highlights 12-14

2.2. About the company 14-21

3.1. About the Concept 23-26

4.1. Data collection & Data analysis 28-59

5.1. Findings 61-62

5.2. Suggestions 62-63

TABLE NO TITLE PAGE NO

XV NET PROFIT OF APOLLO PHARMACY AT 47

Chart No TITLE PAGE NO.

DESIGN OF THE STUDY

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

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

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

competition among them being very severe.

i. Unbalanced inventory at stores to the branches.

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

expenses is more. But profit is not a more.

1.3. RELEVANCE OF THE PROJECT TO MBA:

1.4. ABOUT THE PROJECT:

This title was chosen because in today’s competitive environment

financial performance of the company.

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