Internship Report 2011: Virtual University of Pakistan

Virtual University of Pakistan
www.vustudents.ning.com
Internship Report 2011

Name of organization: Lahore Medicine Company
Name of Internee: Muhammad Abdullah
Student I.D: Mc100204663
Session: 2010-2012
Re Submission Date: 22-02-2012
Name of university: Virtual University of Pakistan
Contents:
Acknowledgement 5
Executive summary 6
Overview of the organization 7
Hierarchy of the organization 8
Product line & competitors 9
Department details 10
Plan of internship program 11
Training program 12
Ratio Analysis 16
Conclusions 32
Recommendations 33
Acknowledgement
First of all Thanks to ALLAH Almighty who give me enough courage to perform
this important work. Upon his Dignity and mercy that every one is performing
what he/she could not do. This is because Allah is not only personality upon we
trust and HE make us able to do for the betterment of the society and people.
I give special thanks to all my colleges, seniors and specially my manger

operations, which give me a great courage to perform the important work in
their department. I make the words of thanks to all the workers and every
employee who was working under the department of Finance.
I thank to all the personnel of the company who also give me great help for
making my internship report.
Executive Summary:
This is an internship report regarding the introduction of the Organization Lahore

Medicine Company. I described in this report about introduction and my learning
during my training program in this firm.
I started the report with the introduction of the organization, which describes the
organization’s vision and history of the organization with some successes which it
make during its 25 five years period of existence. The complete products range of the
organization. Afterwards I described my plan of internship report, the place and
department where I performed my internship.
Later part of report describes about my learning in the department. I give detailed
description of all the departments where I performed. I mentioned al the works which
I performed, also the works which are assigned to me.
The last part of the report evaluate and give Ratio Analysis about the Sanofi-aventis
medicine company, as my organization’s data is confidential so my instructor gave me
the name of the other firm, to perform Ratio Analysis. I give Formula of the ratio, its
table of three calendar years along with bar charts and then interpretation about ratios.
7
In the end I briefly evaluate the Organization about my learning and working in the
organization. I give a conclusion and also give some Recommendations for the
organization.
Over view of the organization

Introduction of the Organization
The pharmaceutical companies are contributing in the success of Pakistan. As the
medicine is the need of every person. The Lahore Medicine company is not actually
the medicine making company. It is actually the medicine distribution company
which distributed the main and most selling medicines in Pakistan. It was came into
being in 1986 in Lahore, and was from the pioneers of the distribution companies.
Brief History:
The history of the firm is full of success and prosperity. The firm made his name
worthy in the field of medicine. The twenty five years success period is greatly
evaluated by the economists The Lahore Medicine Company is the trusted distributors
of the medicine. It starts from the City of Lively people of Lahore, and make its
business vast to the other cities of the country. The company was very little in the
8
beginning and started his business with the short capital of about two millions, but as
the time passes it makes his name in the main distributors of the country. And now the
company has handsome capital of 23 millions with the profits of 8 millions per year.
Hierarchy of the organization
Director/CEO
Marketing Operational
Finance manger
manager manager
The information is retrieved from that site;

10
http:www.lahoremedicinecompany.com
Product line:
The company distributed the main products to intercity and
outside the city also.
 Brufin tablets and syrups
 Clerecid tablets of 100 mg and 200mg
 Obtelodon Tablets
 Fansidol tablets
 Menface (d.s) Tablets and syrups
 Lycotone Syrups
 Glycerine liquid
 Panadol tablet and syrup for children
Competitors:
These are main competitors of the company.
 Feroze medicines.
 GSK medicine distributors
 Ahmed and Gulzaman Distributors.

11
The information is retrieved from that site
;http:www.lahoremedicinecompany.com
Introduction of All the Departments

Marketing Department:
The marketing Department is very vast and biggest department of the organization. It consists of
8 personnel. The personnel manage the works of the marketing. It distributes all the medicine to
the market and to the whole sellers and the retailers in the market. It also manages the
department of the prevailed in the market.
Accounts and Finance Department:

The finance Department is consists of five personnel. This department of the organization
manages the accounts and financing needs of the company. It manages both accounting and
financing of the organization. The finance department manages the cash and other operations of
credits of the company.
Operational Management Department:

The operational manger Is the head of the department manages the operational works of the
firms. All the operating activities within the company are managed by the department.
12
The information is retrieved from that site;
http:www.lahoremedicinecompany.com
Plan of internship Program

Introduction of place of internship:
My firm’s main office and other main departments are situated on the Davis Road Lahore. The
Davis Road is known for medicines because there are many medicine making and distributing
companies. I choose the City of Lahore which has vast area of medicines makings. I spent two
months their in the department of Accounts and Finance. It was a great place for me to learn
about finance field which is very much included in medicine fields as all the organizations either
small or big must have a finance department, to manage their finance.
It constitutes of five members in the department a manger, an accountant, a distributor’s manger

a clerk and a locker management person. I performed almost with all the personnel in the
department.
13
Period of internship:
My period of internship is of 2 months that is from 6th November 2011 to 9th January 2012.
Name of department:
I Got my internship in the “Accounts and Finance” Department of the company.
Training Program
My learning as an internee:
It was a great pleasure for me and great source of learning during my internship in the finance
department of the organization. It was tremendous experience to have an internship in the
accounts and the finance department. It was easy to learn also something was tough for me, but I
managed all my works with the support of the seniors.
14
Following are some of the learning and the works which are the assigned to me also some
valuable information which I’m sharing below in this section of my report.
Accounts and Finance Department:

In the finance department I’ll manage the flow f transactions, posting of ledgers and making of
debit as well as credit voucher. The listing of Distributors and manage them according to the cash
and credit vouchers.
Preparation of Vouchers:
In the department of finance and accounts, I came to know that the different type of vouchers are
prepared and managed by the supervisor of the department. This is then signed by the manger of
the department.
 Cash Receipt Voucher
 Cash payment voucher.
 Journal voucher and adjustment voucher.
 Credit voucher
Cash receipt Voucher:
15
This kind of voucher is maintained when the amount is received on behalf of Lahore
Medicine Company. But this is not a major work in the department, because most of the
vouchers are maintained by the banks.
Account officer prepared these vouchers on the basis of cash receipts prepared by the
cashier.
When these accounts are maintained these main entries are usually passes which are
described below;
Account Code Cash account (Debit) amount
Income A/C or Receivable A/C (credit) amount
Account Code Bank Account ( Debit) Amount
Cheques Clearing Account ( Credit) amount.
Cash Payment vouchers:

These vouchers are made when the cash payments are made against the expenses made by the
company. These vouchers are usually made when the company under goes the expenses like,
entertainments, repairs and purchase of the medicine from the patent companies.
These entries usually undergoes when the cash payment voucher is prepared by the cashier and
supervised by tea manager.
Account code/Name of Expense account (debit) amount
Cash account (credit) amount
16
The Evidence of the expense is attaché with the cash payment voucher, so that laer on it isto be
verify that , where the expense is undergone.
Journal Voucher:
These vouchers are prepared when the following expenses and incomes are undertaken,
Purchase on Credit
Written off depreciation
Rectification of mistakes or omission
These are maintained by the department.
Distribution lists:
The distribution lists are also maintained by the departments in this department the distribution
lists are maintained, and short listed the customers, from which payments are to be received by
the marketing department from the market.
Managing of Registers:
Some registers are managed through the manual work of the accounts department. Name of the
vouchers and vouchers account are managed.
Information Technology management of Accounts and cash:
17
The data of the accounts and the vouchers of cash and receipts payments are also put on the
relevant accounts that are mentioned in the computer system.
Works Assigned:
These works are assigned to me, during my internship program. These are preparation of
different type of works. I used to take vouchers from the cashier and bring it to the supervisor for
the supervision. Afterwards the copied cheques whose payment was to be made on that date
should also maintained. Also the vouchers and their destination place should be mentioned in the
separate registers.
I maintained the vouchers which are received from the marketing department. These vouchers
are posted in their relevant accounts of the tab, in the computer system. The ledger is daily
managed because there is need of automatic system which daily uploaded the relevant
information in their relevant accounts.
Completion of Works:
It is famous saying that, “when some one assigned work to you does complete the work as
assigned”. So I also follow the quote, and complete all the works that are assigned to me, on the
other hand I also do other works which are made on the daily basis. I performed and complete
my work with great dignity and devotion. The works which I completed includes the completion
of vouchers and the putting the accounts in their relevant ledgers accounts.
The distribution lists which have the details of the distributors of the company, I maintained all
the distribution lists as performed. I put all the distribution lists in the computes and manage their
accounts with their payments and receivable accounts details.
Knowledge Attained:
18
The knowledge and information I attained from the field which I have performed my work.
Everyday was the new day and I receive new knowledge and information. The professional field
is very different from studies. What you studied is quite different from what you have been
performing. I learned about my field and dealing of different people, how they have been dealt,
in what situation there is need of softness and what are the situations where the decision should
be taken. I learned the many functions performed in the field of accounts and finance, which I
never read. It is the field which gives you the practical knowledge.
Experience gained:
A lot of experience I gained from my internship. I rained for accounts and finance. I have been
able to perform the accounts and finance of any department of related field. Doing training in the
finance department is very informatics and knowledgeable. The colleagues and my seniors give
me special attention in attaining the experience about the field of accounts and finance.
Ratio Analysis:
Note: The Lahore Medicine Company is Private Medicine Company from whom I
completed my internship program. The financial statements of the Lahore
Medicine company are not highly confidential, they providing me the scanned
copy of their financial statements nor do they give me the URL of these reports. So
now I’m using the Data and financial statements of Sanofi-aventis Medicine
Company for Ratio Analysis as per my Course Instructor’s instructions.
19
1. Current Ratio: current assets / current liabilities.
Year 2010 Year 2009 Year 2008
“000” “000” “000”
=1924012/1368817 =2037205/ 2075329 =1769820/1797596
=1.405 Times =0.9816 Times =0.9845 Times
Working: The Amount of current assets and current liabilities is clearly mentioned in the
financial statements, which can be retrieved from the following URL:
http://www.google.com.pk/url?sa=t&rct=j&q=sanofi-
aventis+annual+audited+report+of+2010&sour
Graphical representation:
20
Interpretation: Current Ratio is very much increased as compare to the previous years,
which notify that company’s current performance regarding current debts is good as
compare to recent years.
2. Acid Test Ratio: (Current assets – inventory)/ current liabilities
21
“000” “000” “000”
=(1924012- 1148158) /1368817 =(2037205 - 1136737 =(1769820-

)/ 2075329 1104944)/1797596
=56.68%
=44.65% =36.98%
Working: The amount if inventory is mentioned as Stock in trade under thehead current assets. The cueent
assets and current liabilities areclearly mentiuoned in the following URL; http://www.google.com.pk/url?
sa=t&rct=j&q=sanofi-aventis+annual+audited+report+of+2010&sour
Graphical Representation:
22
Interpretation;
The Acid test ratio is increasing day by day , it is greatest in the year 2010 as compare to
the last years, so this shows that the firms liquidity position is getting better.
3. Working Capital: Current Assets – current liabilities
“000” “000” “000”
=1924012-1368817 =2037205-2075329 =1769820-1797596
=555195 = -38120` = -27776
23
Working: The Amount of current assets and current liabilities is clearly mentioned in the
financial statements, which can be retrieved from the following URL:
Interpretation: It is not a ratio, it just give the comparison between current assets and
current liabilities.
24
4. Time interest earned ratio: PBIT* / Interest Charges.
PBIT* = Profit before interestand Tax
“000” “000” “000”
=531655/130014 =384071/131012 =1688478/87113
=4.089% =2.93% =1.93%
Working ; PBIT = PBT + Working ; PBIT = PBT + Working ; PBIT = PBT +

financial Costs financial Costs financial Costs
=401641 + 130014 =253059 + 131012 =84365 + 87113
=531655 =384071 =168478
Graphical Representation
25
Interpretation:
The firms interest coverage ratio in 2010 is 4.089 % which is very high as compare to the recent
years, which means that firm is improving its ability to meet its interest obligations.
5. Debt Ratio: Total liabilities / Total assets
“000” “000” “000”
=1887024/3348427 =2146644/3439093 =1867743/2984385
26
Working: The current assets and current liabilities are clearly mentioned in the following
URL; http://www.google.com.pk/url?sa=t&rct=j&q=sanofi-
Interpretation: The Debt Ratio is increasing as compare to the recent years which indicates that
the Firm’s assets are increasing.
6. Debt Equity Ratio = Total Liabilities / Share Holder’s Equity

27
“000” “000” “000”
=3348427/1461403 =3439093/1292449 =2984355/1116612
=2.291 % =2.66% =2.67%
Working: The amount if inventory is mentioned as Stock in trade under the head current
assets. URL; http://www.google.com.pk/url?sa=t&rct=j&q=sanofi-
Interpretation:
In the calendar year 2010 the debt equity ratio is decreasing which shows that in 2010 the
shareholders did not contributed as much as they contributed in 2009 and 2008.
Net Profit Margin= Net Profit / Net Sales
“000” “000” “000”
=224024/6158295 =167371/6725708 =38269/4346528
=3.63% =2.48% =0.88%
28
Working: The amounts are clearly mentioned in the following URL;
Interpretation:
The Net Profit margin is extensively Greater as compare to the recent years, which means
that firm’s Profit Margin is increasing with the respect to sales from recent years.
29
9. Return on Assets= Net Income / Total Assets
“000” “000” “000”
=224024/3348427 =167371/3439093 =38269/2984355
=6.69% =4.86% =1.28%
Working: The amount are clearly retrieved from that URL;

30
Interpretation:
The firm is using its Assets efficiently as the Return on assets ratio is greater in 2010
as compare to 2009 and 2008.
10. Operating Income Margin= Operating Income / Revenue
“000” “000” “000”
=531682/6158295 =384071/6725708 =171478/4346528
Working : The amount of operating income is mentioned as operating profit, while the
31
amount of Revenue is clearly mentioned as Sales, which can be retrieved from the
following URL: http://www.google.com.pk/url?sa=t&rct=j&q=sanofi-
Graphical Representation :
Interpretation:
The firm has decreases its operating expenses as compare to the sales.
32
11. Return on Total Equity = Net income after tax / Shareholder’s Equity
“000” “000” “000”
=224024/1979610 =167371/1363764 =38269/1186759
=11.31% =12.27% =3.22%
Working: Share holder’s Equity = Total Assets –Total laibility
=3348427-1368817 =3439093-2075329 =2984355-1797596
=1979610 =1363764 =1186759
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Interpretation:
The Return on total is less as compare to the year2009, but is doubled as compare to
the year 2008. So the company is using Share holders fund efficiently.
12. Total Assets Turnover Ratio=Net Sales / Average total Assets*
34
“000” “000” “000”
=6158295/3393760 =6725708/3211724 =4346528/2706204
=1.814% =2.094% =1.606%
Working:
Average total Assets* =Total Asset( current year)+ total Asset (previous year) /2
=(3348427 + 3439093) /2 =(3439093 +2984355)/2 =(2984355+2428053)/2
=3393760 =3211724 =2706204
35
Interpretation:
The firm is not using his assets effectively in 2010 as it uses it in year 2009.
13. Operating Cash Flow Ratio: cash flow from operations / current liabilities
“000” “000” “000”
=880332/1368817 =233212/2075329 =198393/1797596
=0.6431% =0.1123% =0.1103%

36
Interpretation:
The higher operating ratio shows that the firm is solving his liquidity problems,
effectively, as it was facing in previous years.
15. Earning per share = Net income / NO of shares
“000” “000” “000”
=224024/96448 =167371/96448 =38269/96448
37
= Rs.2.23 = Rs.1.73 = Rs.0.39

38
Interpretation:
The graph and the data indicates that the company has handsome EPS, means that
company using shareholders fund efficiently and making right policies for company
earnings.
Note: the last audited report for Sonafi-aventis was published for the year
2010. So I made my ratio analysis from 2010, 2009 and 2008.
Auditors Report to the directors, the data is retrieved from that URL:
39
www.sanofi-aventis.com.pk/l/pk/en/download.jsp?file...BE46..
Auditors report to the directors, the data retrieved from that URL
www.sanofi-aventis.com.pk/l/pk/en/download.jsp?file...4A17..
Auditors report to the directors, the data retrieved from that URL:
www.sanofi-aventis.com.pk/l/pk/en/download.jsp?file...4A17....
Conclusions:
 Based on My learning in the organization:
I have done internship in the Lahore Medicine Company some findings I have
made during my internship. First of all the company is making progress and
growing at steady rate. It is contributing in GDP of Pakistan. There are many
qualities I have noted while doing training. That is there is good maintenance of
accounts and finance of the company. The company undergoes a good system of
employee’s evaluation of work they perform. There is a good response at the good
work of employees, but there is not a good system for employees training in the
field of marketing. The employees have been ignored when they don’t perform
work with the standards.
 Based on Ratio analysis:
I have done the ratio analysis of Sanofi-aventis pharmaceutical company, because

the Data for the Lahore medicine company was confidential and private. Here are
my conclusions about the Sanofi-aventis company.
Current assets are increasing as compare to the current liabilities means company
avoiding liquidity and getting short term benefits.
The company shows greater working capital.
40
The decreases in the debt ratio indicate about the lesser contribution by the
shareholders.
The income is increasing as per sales which mean that the company is trusted in
the market.
The EPS of the company growing effectively shows companies better position in
the market and most recognizable.
Recommendations
 Based on my learning in the organization:
The recommendations are made on evaluations while conducting my training.
Some recommendations are as under:
The company is growing though but not at the rapid rate as it should be, I
recommend that the company should give importance to its shareholders and
investors for more growth.
The company should start the proper training program for the employees to give
them awareness about the work so that work with great devotion.
The company is not advertising its products properly; the company should start a
public awareness campaign about the products so that the ratio of its sales should
increase.
 Based on Ratio Analysis:

41
The ratio analysis of Sanofi-aventis shows that the company is successfully
operating.
Operating Cash flow ratios show that the company is facing liquidity problems,
but company is making handsome profit, this should be avoided if company uses
its current assets in an efficient and effective way.
The company’s net profit margin is increasing but not increasing at the rate where
the sales increasing, this indicates that the operating expenses are getting bigger;
the firm should cut down its operating expenses to improve voidable cost.
There is a need of attraction for the investments, this could be done if the
company give its shareholders a handsome pay offs along with bonus shares.
The company also should increase its production from current assets, so that its
current assets should be used in an efficient manner.
42

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Virtual University of Pakistan

Internship Report 2011

Name of Internee: Muhammad Abdullah

Student I.D: Mc100204663

Re Submission Date: 22-02-2012

Name of university: Virtual University of Pakistan

Overview of the organization 7

Hierarchy of the organization 8

Product line & competitors 9

Plan of internship program 11

I give special thanks to all my colleges, seniors and specially my manger

This is an internship report regarding the introduction of the Organization Lahore

Over view of the organization

Hierarchy of the organization

The information is retrieved from that site;

 Clerecid tablets of 100 mg and 200mg

 Menface (d.s) Tablets and syrups

 Panadol tablet and syrup for children

 GSK medicine distributors

 Ahmed and Gulzaman Distributors.

The information is retrieved from that site

Introduction of All the Departments

Accounts and Finance Department:

Operational Management Department:

The information is retrieved from that site;

Plan of internship Program

It constitutes of five members in the department a manger, an accountant, a distributor’s manger

I Got my internship in the “Accounts and Finance” Department of the company.

Accounts and Finance Department:

 Cash Receipt Voucher

 Cash payment voucher.

 Journal voucher and adjustment voucher.

Cash receipt Voucher:

Account Code Cash account (Debit) amount

Income A/C or Receivable A/C (credit) amount

Account Code Bank Account ( Debit) Amount

Cheques Clearing Account ( Credit) amount.

Cash Payment vouchers:

Account code/Name of Expense account (debit) amount

Cash account (credit) amount

Written off depreciation

Rectification of mistakes or omission

These are maintained by the department.

Information Technology management of Accounts and cash:

1. Current Ratio: current assets / current liabilities.

Year 2010 Year 2009 Year 2008

“000” “000” “000”

=1924012/1368817 =2037205/ 2075329 =1769820/1797596

=1.405 Times =0.9816 Times =0.9845 Times

2. Acid Test Ratio: (Current assets – inventory)/ current liabilities

“000” “000” “000”

=(1924012- 1148158) /1368817 =(2037205 - 1136737 =(1769820-

3. Working Capital: Current Assets – current liabilities

Year 2010 Year 2009 Year 2008

“000” “000” “000”

=1924012-1368817 =2037205-2075329 =1769820-1797596

=555195 = -38120` = -27776

PBIT* = Profit before interestand Tax

Year 2010 Year 2009 Year 2008

“000” “000” “000”

=531655/130014 =384071/131012 =1688478/87113

=4.089% =2.93% =1.93%