PROFITABILITY ANALYSIS IN PRODUCTION LINES THE CASE OF ETHIOPIAN PHARMACUTICALS MANUFACTURING SHARE COMPANY

Abstract

The study was commenced by pointing out and highlighting the major problems in the profitability of production lines in EPHARM. Data was collected through observation, interviewing and questionnaires purposely selected experienced key senior and middle level management staffs, through reviewing various document and five years audited reports. The collected data had been organized, discussed to enable and describe the analyses, underlying of each designed questions and questionnaire responses, reviewed documents, and observations. Descriptive research was applied in this research. From total of 84 targeted populations, 6 board members, 12 top management, 52 middle level management, 12 accountants and 2 auditors were targeted population. Both qualitative and quantitative and primary and secondary data were collected using questionnaire, focus group discussion and documentation of reviews. The analysis showed that there was a big return gap between high profitability production lines and low profitability production lines. The major problems that hinder the profitability of production lines were out-dated production machines, shortage of raw materials, machines spare parts and foreign currency. The company has been growing at increasing rate in finance, human capital, and large market shareholding as well. EPHARM had been long years of manufacturing pharmaceuticals products in the industry, experienced workers, huge expansion areas and excess market demand. It’s recommended that the shareholders and management should coordinate the Company resources, replace existing old machines and replace non profitable products by new to further exploit ample local market demands and to continue competitively in the market.