Accounting Analysis of Blackmores

Topics: Balance sheet, Income statement, Generally Accepted Accounting Principles Pages: 8 (3056 words) Published: September 19, 2013
Introduction
Blackmores,the leader of Australian pharmaceuticals with over 80-year history, keeps focusing on natural health care and becoming the first choice of the public. This essay will discuss the financial condition by analyzing the annual reports of Blackmores in the period from financial year 2010 to financial year 2012. It will be demonstrated by focusing on financial statements analysis, financial statements comments and comparison with Mcksson. Financial statement analysis

Goals and ethical issues
As the famous Australian pharmaceuticals, Blackmores sets its objectives as pursuing the leadership position of Australian natural health brands and improving people’s lives by delivering the world’s best natural health solutions so as to become the first choice of people. To achieve the goal, Blackmores translates their unrivalled resources and knowledge into innovative, quality branded healthcare solutions and considers five objectives as their values, which includes passion for natural health, integrity, respect, leadership and social responsibility. These values bring a strong and united team working towards a common goal. In 2011 financial year, according to the CEO’s report of Blackmores, although the sales was grown in Australia by 3% over the year, pharmacies which were the biggest sales channel of Blackmore, was suffered by the general sluggishness of retail sales. Therefore, in 2012 financial year, in order to get closer to customers, Blackmores presented a significant service named as “Blackmores online”, which performed as the core part of their marketing and education program with over 375,000 online members. Therefore, the development of MyBlackmores is regarded as the first program in Australia to offer consumers the latest interactive technology combined with personal health support from a team of qualified naturopaths. Furthermore, since the application of the service was presented on Apple’s App store, Blackmores became the first Australian vitamin and dietary supplement company with an App. In addition, as the report of ABC online, Blackmores struck an agreement with the guild to promote their products except certain prescription drugs. According to the agreement, when pharmacists dispensed medicines for several common conditions, they would receive a prompt in their computer system reminding them to promote a complementary Blackmores product. However, the subsequent report showed that pharmacists receiving computer prompts to promote Blackmores supplements when selling certain prescription drugs. This event caused the denouncement from both Australian Medical Association and the Pharmaceutical Society of Australia. According to the interview of Dr. Harvey of the news report (2011), the supplements of Blackmores would have been offered to treat the side effects of drugs including blood-pressure and lipid-lowering medications. However, the side effects are uncommon and there is little evidence that the supplements are effective in the treatment. Furthermore, a report released by the Department of Health and Ageing in 2010 showed that up to 90 percent of complementary medicines which were reviewed were found to be non-compliant with regulatory requirements. Therefore, the event was regarded as a symbol of profit ahead of good pharmacy practice. To solve the problem, Blackmores fully considered the feedbacks and removed the Gold Cross endorsement from the proposed IT dispensary software by discussing with the subsidiary of Blackmore. They also updated the product names to reflect the key ingredients under the Companions brand (2011). Furthermore, they published a research review for healthcare professionals to highlight the scientific evidence underpinning these formulations. The respondence showed that Blackmores and the Pharmacy Guild had the utmost respect for pharmacists as highly ethical and professional members of the community. Additionally, Blackmores announced that they welcome any...
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