1st Mid Term Paper (Group-6)

Financial Analysis of Fu-Wang
Ceramic industries ltd. & RAK

Ceramics (bangladesh) ltd. financial
statement of year 2018 & 2019
1|Page
Financial Management
Course code: FIN 501
Section: 1
Submitted tO: Prepared By:

Prof. Dr. Sujit R. Saha, Ph.D Md. Majharul Islam
ID: 2020-1-91-017
East West University Abu Saeed Mohammad Hafizul Haque
ID: 2020-1-91-006
Areef Mahmud Iqbal
ID:2020-1-91-020
Amena Sarwar Nikita
ID:2020-1-91-021
Submission Date: 21st November, 2020
2|Page
21stNovember, 2020
Prof. Dr. Sujit R. Saha, Ph.D
East West University
Dhaka, Bangladesh.
Subject: Regarding submission of FIN 501Term Paper on Financial Analysis of Fu-Wang

Ceramic Industries Ltd.& RAK Ceramics(Bangladesh) Ltd. Financial Statement of Year 2018 &
2019.
Dear Sir:
With great pleasure we submit this term paper that we have been assigned as an important
requirement of EMBA program at East West University. We found the study to be quite
interesting, beneficial and knowledge. We have tried our level best to prepare an effective &
creditable term paper.
This project report is about “Comparative Financial Analysis between Fu-Wang Ceramic
Industries Ltd. & RAK Ceramics (Bangladesh) Ltd.”
We also want to thank you for your support and patience with us and we appreciate the
opportunity provided by East West University to work on this wonderful report.
Sincerely Yours,
Md. Majharul Islam 2020-1-91-017

Abu Saeed Mohammad Hafizul Haque 2020-1-91-006
Areef Mahmud Iqbal 2020-1-91-020
Amena Sarwar Nikita 2020-1-91-021
3|Page
Executive Summary
This term paper is based on our analysis of financial statements of 2018 and 2019 of Fu-Wang
Ceramic Industries Limited and RAK Ceramics (Bangladesh) Limited. We have done our
analysis mainly focusing on the comparative analysis between these two ceramics industries. In
this period, we have chosen two ceramics Fu-Wang Ceramic Industries Limited and RAK
Ceramics (Bangladesh) Limited to done this comparison. It was a great opportunity to know and
gather knowledge about these two ceramics industries. “Comparative Financial Analysis
between Fu-Wang Ceramic Industries Limited and RAK Ceramics (Bangladesh) Limited”.
In the new competitive business area, ceramics sector is getting more competitive in Bangladesh.
This paper focuses on the comprehensive comparison about the Fu-Wang Ceramic Industries
Limited and RAK Ceramics (Bangladesh) Limited. For this analysis we have used some most
commonly used measures such as general business measures, Profitability ratios, Liquidity ratios
Asset management, Debt management.
In this sector the most used financial statements are the balance sheet and profit and loss account
where the balance sheet shows the financial position and profit and loss account shows the net
profit or net loss of the ceramics industries. Ratio Analysis deals with these statements. Ratio
analysis is the most popular trend to evaluate performance over years or with other and within
companies in an industry. In ourpaperwe had to study these ceramics limited financial statements
for the last two years then had to analyze and give significant comments regarding the changes in
the financial position. Analysis and interpretation of these financial statements through ratio
analysis has now become an important technique for performance appraisal because the
investors, financial experts, management executives and the manager and owners are always
relying on these ratios to make important decisions.
As a part of ourEMBA program, we have spent our times by analyzing the activities of these two
ceramics industries. We have analyzed the financial statements of these two companies to find
out its ratios by using its past two years (2018 & 2019)records. After preparing this paperwe
came to know that analysis of financial statements through ratios helps to overcome the past
flaws and make the future decisions and strategies. Therefore, it is very necessary for every
organization whether the company’s size is to make financial statement and to analyze it by
ratios.
4|Page
Table of contents
Topic Page no.
Cover Page 1
Letter of Transmittal 2
Executive Summary 3
Tables of content 5-6
Chapter: 01
1.1 Introduction Page- 7
Objectives of the Term Paper 7
Scope of the Term Paper 8
Data Collection 8
Data Analysis 8
Chapter: 02
2.1 Company Profile Page -9
Fu-Wang Ceramic Industry Limited 9-10
RAK Ceramics (Bangladesh) Limited 11-13
CHAPTER: 03
3.1 Comparative Financial Statements (2018 & 2019) Page - 14
Comparative Balance Sheet 14
Comparative Income Statement 15
Comparative Statement of Cash Flow 16
Comparative Statement of Changes in Equity 17
Chapter: 4
4.1 Ratio Analyses Page – 20
Calculations of Financial Ratios of Fu-Wang Ceramic Industry Limited 20-22
Calculations of Financial Ratios of RAK Ceramics (Bangladesh) Limited 22-25
Comparative Ratio Analysis ofFU-WANG Ceramic Industries Ltd &RAK Ceramics
26
(Bangladesh) Ltd
4.2 Liquidity Ratio Page - 27
Current Ratio 27
Quick Ratio 29
4.2 Asset Management Page – 30
Inventory Turnover Ratio 31
Days Sales Outstanding 32
Fixed Asset Turnover 34
Total Asset Turnover 35
4.3 Debt Management Ratio Page - 36
Debt to Total Assets 36
Times Interest Earned 38
4.4 Profitability Ratios Page - 40
Net Profit Margin 40
5|Page
Return on Total Assets 42
Return on Equity 43
4.5 Market Value Ratio Page - 45
Price/Earnings (P/E) Ratio 45
Market/Book (M/B) Ratio 45
CHAPTER: 5 47
5.1 Comments Page - 47
Chapter: 6 49
6.1 Recommendations Page - 49
CHAPTER: 7 50
7.1 Cash Conversion Cycle: Page - 50
Forecasting 52
CHAPTER: 8 56
8.1 Conclusions Page - 56
List of Tables
Table no. Table name Page no.
01 Comparative Balance Sheet 14

02 Comparative Income Statement 15
03 Comparative Statement of Cash Flow 16
04 Comparative Statement of changes in Equity 17
05 Calculations of Financial Ratios of FU-WANG Ceramic Industries 20-25
06 Calculations of Financial Ratios of Fu-Wang Ceramic Industry Limited 20-22
07 Calculations of Financial Ratios of RAK Ceramics (Bangladesh) Limited 22-25
Comparative Ratio Analysis of FU-WANG Ceramic Industries Ltd 26-27
08
&RAK Ceramics (Bangladesh) Ltd
List of Figure
Chart no. Chart name Page no.
01 Bar Chart of Comparative Assets 17
02 Bar Chart of Comparative Liabilities 18
03 Bar Chart of Comparative Owners' Equity 18
04 Bar Chart of Comparative Sales 19
05 Bar Chart of Comparative Net Profit 19
06 ROE Comparative Graph 26
07 Current Ratio 27
08 Quick Ratio 29
09 Inventory Turnover Ratio 31
6|Page
10 Fixed Asset Turnover Ratio 32
11 Total Asset Turnover Ratio 34
7|Page
CHAPTER: 1
1.1 Introduction
We have decided to select ceramics industry of Bangladesh for our Term Paper. We will be
comparing and analyzing the financial performance of the two major ceramic companies are Fu-
Wang Ceramic Industries Limited and RAK Ceramics (Bangladesh) Limited. We have decided
to select thesetwo industries because of its huge contribution to improve the economic condition
of our country.
Ceramics has a high demand in the world. Bangladesh apparently has the perfect geographical
position, supply of raw materials and labor available to meet this demand. Ceramics industry of
Bangladesh produces wall and floor tiles, sanitary ware, ceramics plate and cup, tableware etc.
Ceramic industry of Bangladesh is a booming sector and the great potential of both domestic and
foreign market.
Objectives of the Term Paper

BROAD:
The main objective of this study was to identify and assess the present financial position of
Ceramics Industries considering its market shares. The study was also attempted to evaluate the
prospects of financial growth market growth of the organization. The study broadly aimed at
analyzing the feasibility of the expansion project of Comparative Performance Analysis between
Two Ceramics IndustriesFu-Wang Ceramic Industries Limited and RAK Ceramics (Bangladesh)
Limited.
SPECIFIC:
(a) To analyze the overall financial position of Fu-Wang Ceramic Industries Limited and
RAK Ceramics (Bangladesh) Limited.
(b) To evaluate the current financial position of the two companies.
(c) Comparative statement of Cash Conversion Cycle between the two companies.
(d) To forecast the next year (2020) financial position of the two companies.
8|Page
Scope of the Term Paper:
This term paper covers the topic “Comparative Financial Analysis between Fu-Wang Ceramic
Industries Limited and RAK Ceramics (Bangladesh) Limited” To conduct a study on this topic we have
gathered valuable information fromCompany Websites& Dhaka Stock Exchange. We have also
got some information from other web sites that are related to our topics. We have also collected
much information from Security Exchange Commission library.
Data Collection:
o Annual Reports (2018 & 2019)of Fu-Wang Ceramic Industries Limited and RAK
Ceramics (Bangladesh) Limited.
o Company Website and other websites.
o Various books, articles and compilations.
Data Analysis:
Financial Analysis based on the performance comparison has been done with ratio formulas and
used to compare the performances of ceramics industries. Ratio analysis is presented in a
standard manner so that the calculations and interpretations might clear to all. The decision
criterion is based on the comparison of each ceramics performance with the Industry Average.
The industry average is calculated on the basis of the average of average of the banks that are
collected as sample for the comparison of performance between two find out the current financial
position of the two Fu-Wang Ceramic Industries Limited and RAK Ceramics (Bangladesh)
Limited.
9|Page
CHAPTER: 2
2.1 Company Profile
“Fu-Wang Ceramic Industry Limited”
Fu-Wang Ceramic is a product of Fu-Wang Group which is one of the largest industries in
Bangladesh. From the very beginning Fu-Wang Group has been trying to maintain the quality of
the products. This group produces a comprehensive range of Foods, Beverage & Ceramic Tiles
with high quality & standard.
FU-WANG Ceramic Industry Ltd. incorporated in Bangladesh from 31 March, 1995. Around
498 employees are working in this industry. It has started its unit-1 production from October
1996 and unit-2 production from October 2000. Fu-Wang Ceramic gained the users trust because
of the high quality & standard and as a result it achieved ISO-9002 Certificate on 04 November
1998. It has been producing/manufacturing various type and size of Homogeneous, Glazed Tiles.
Here are some snapshots of various Fu-Wang Ceramic products:Fu-Wang Exclusive Glazed
Wall Tiles, Fu-Wang Glazed Wall Tiles,Fu-Wang Special Glazed Wall Tiles,Fu-Wang
Decoration Tiles, Fu-Wang Floor Tiles, Fu-Wang Roto Print Floor Tiles, Fu-Wang Special
Glazed Floor Tiles, Fu-Wang Border Tiles and etc.
Fu-Wang Ceramic Industry Limited is capable of meeting the increasing demand of customers
countrywide. This industry is using high quality raw materials, Italian/Chinese machinery and
highly experienced foreign and local engineers in order to introduce the best ceramic to the
country people. All types of tiles such as Special Glazed Wall Tiles, Roto print wall tiles, border
tiles and decoration tiles are produced by utilizing the latest printing and laser cut technology.
FU-WANG Ceramic Industry Ltd. meets European standards in production and planning to
export these products to foreign countries. This company is already exporting its products to the
North Eastern region of India.
Fu-Wang Ceramic enlisted in Dhaka Stock Exchange on 1998. This company is rated as “A”
category share under the ceramic sector as on 08-07-2012.
10 | P a g e
HISTORY OF THE COMPANY:
Date of incorporation : 31 May 1995
Listed in Dhaka Stock Exchange Ltd : May 1998
Listed in Chittagong Stock Exchange Ltd : May 1998
Commercial Production : October 1996
ISO Certification : ISO-9002 Certified on 4 November 1998
Business Lines : Manufacturing and Marketing of Ceramic &
Homogeneous Floor and Wall Tiles
Authorized Capital : Tk. 5 billion
Paid-up Capital : Tk. 1,363 million
Total Share No. of securities : 136,269,093
Number of Employees : 498
Contact Information of Fu-Wang Ceramic Industry Limited
Corporate Head Quarter: 116 Bir Uttam Mir Shawkat Road, Gulshan-2, Dhaka-1212
Tel: +880 2 9883274-5, 8825573, 8825361
Fax: +880 2 8823985
Website: www.fuwangceramic.com
11 | P a g e
“RAK Ceramics (Bangladesh) Limited”
RAK Ceramic (Bangladesh) Limited incorporated in Bangladesh on 26 November, 1998.

Previously it was named RAK Ceramics (Bangladesh) Private Limited and switched to RAK
Ceramic (Bangladesh) Limited on 10 June 2008. It is committed to manufacturing and
merchandise of ceramics tiles; bathroom sets and all types of sanitary products.
RAK Ceramic (Bangladesh) Limited is a joint venture with UAE-Bangladesh company. RAK
has started its commercial production on 12 November, 2000. From the very beginning it is
concerned to produce high quality products (ceramics tiles, bathroom sets and all types of
sanitary goods) towards the honorable clients and it is successfully maintaining the quality. As a
result, RAK achieved ISO 9001:2008 certificate which is considered one of the glorious
certificates for multinational organizations. In these Nineteen years (2000-2019) with annual
turnover of BDT 5248 million, RAK Ceramic (Bangladesh) Limited proves that they are on
dominating position in ceramic industry.
HISTORY OF THE COMPANY:

Origins
RAK Ceramics was established in Ras Al Khaimah in 1989 by H.H. Sheikh Saud Bin Saqr Al
Qasimi, member of the Supreme Council and Ruler of Ras Al Khaimah.
Incorporation and Growth
In 1993 RAK Ceramics opened of its first sanitaryware plant in Ras Al Khaimah.
By the year 2000, the company had opened its first overseas plant in Bangladesh.
From 2000 to 2004, RAK Ceramics invested heavily, expanding the company, and exporting to
almost 120 countries by 2004. In 2010 RAK Ceramics becomes the world’s largest ceramics
manufacturer and by 2012, RAK Ceramics had supplied 1 billion square meters of tiles to
projects around the world since the company began.
Recent History
In June 2014, the board agreed to sell a 30.6% equity stake to Samena Capital on a proprietary
basis. Given the size of the transaction, Samena Capital formed a consortium of co-investors
which included two GCC sovereign wealth funds, a blue-chip Saudi family and existing high net
worth shareholders.
12 | P a g e
In 2015, following the acquisition, the board approved the implementation of a Value Creation
plan which was designed to streamline operations and unlock value across every aspect of the
business.
RAK Ceramic Wall Tiles:
This industry has produced thousands of unique designed wall tiles, floor tiles and sanitary
wares, it’s still implementing new shapes in the upcoming products. Industry heads believe in
dynamic movements and they are not afraid to take new decisions for their fast-growing
industry.
RAK Ceramic Floor Tiles:
RAK Ceramic Bangladesh Limited offers some extra ordinary shaped floor tiles to customers.
Full list of floor tiles can be gathered from its official homepage (rakcerambd.com).
RAK Ceramic Decor Tiles and RAK Ceramic Salt &Pepper (Glaze) & Slate:
There are some gorgeous house, fish and flower image printed decor tiles available of RAK
Ceramic. Here are the three snap shots of stylish decor tiles.
RAK Ceramic’s Wooden Model Tiles:
RAK Ceramic introduced some gorgeous wooden looking tiles. These tiles can be set in the
bathroom or any room of the house. If these tiles are set in the bathroom, then one can easily get
confused and would think that the floor is actually wooden!
RAK Ceramic Bowl and RAK Ceramic Wash Basin with Pedestal:
Besides wall and floor tiles, RAK has introduced many extra ordinary bathrooms sets like basin
bowl, wash basin with pedestal, Paper holder, Towel hanger, Soap case, slate and many more.
RAK Ceramic Bathroom Set:
RAK Ceramic provides completely decorated bathroom utilities. In many apartments, offices as
well as houses we could find full complete bathroom set of RAK Ceramic.
RAK Ceramic random products:
Other products of RAK Ceramics are also popular. These random products are soap holder,
towel holder, shelf and toilet tissue paper holder.
13 | P a g e
RAK Ceramic believes in modern technology. It has wide range of machines set up in the
factory; these machines can produce the tiles, shape the tiles, pick the tiles and of course pack the
tiles. There are several well-trained employees working in this industry who commands the bot
to take proper steps through the computer.
RAK Ceramic (Bangladesh) Limited enlisted in Dhaka Stock Exchange on 2010, it’s been rated
as “A” category share under the ceramic sector as on 16-07-2012
Contact Information of RAK Ceramic (Bangladesh) Limited:
Dhaka Office :RAK Tower (7thFloor& 9th Floor),

Plot # 1/A,Jasimuddin Avenue,Sector # 3, Uttara Dhaka – 1230.
Phone : 880-2-8917393, 8912303, 8915831, 8916548, 8922285, 8911642, 8922078
Email : mktg@rakcerambd.com
Website : www.rakcerambd.com
14 | P a g e
CHAPTER: 3
3.1 Comparative Financial Statements (2018 & 2019)
Comparative Financial statements of Fu-Wang Ceramics Industries Limited and RAK
Ceramics (Bangladesh) Limited for the year 2019 and 2018
Comparative Balance Sheet

FU-WANG Ceramic Industries Ltd. RAK Ceramics (Bangladesh) Ltd.
Particulars
2019 2018 2019 2018
Asset s
Current Asset s
Cash and Cash Equivalents 10,364,072 19,769,824 1,499,310,101 829,807,227
Inventories 881,664,883 753,810,051 2,785,630,242 3,005,616,081
Trade and other Receivables 96,146,171 126,156,405 859,960,257 871,791,127
Advance, Deposits and Prepayments 163,244,543 142,345,320 267,192,251 322,820,432
Advance Income TAX 3,434,063,275 3,125,317,011
Investment in FDR 8,612,086
Tot al Current Asset 1,160,031,755 1,042,081,600 8,846,156,126 8,155,351,878
L og n Term -Asset s
Property, Plant and Equipment 1,309,658,009 996,947,317 3,002,292,895 3,200,651,808
Investment in Property 14,016,828 14,016,828 681,433,369 691,149,776
Right of Use Assets 45,836,335
Intengible Assets 6,495,047 11,916,384
Capital Work in Process 23,750,525 88,132,682 177,641,997 127,781,532
Tot al L ong -Term Asset s 1,347,425,362 1,099,096,827 3,913,699,643 4,031,499,500
Tot al Asset s 2,507,457,117 2,141,178,427 12,759,855,769 12,186,851,378
L i ab i l i t i es and Sharehol d ers' Eq ui t y

Current L i ab i l i t i es
Short-Term Bank Loans and Others 542,858,034 452,450,081
Borrowing 89,232,918 309,652,416
Lease Liability 10,101,008
Trade and Other Payables 40,135,763 35,798,978 691,725,531 528,659,578
Accrued Expenses 558,665,634 531,601,160
Liabilities for Expanses 18,567,935 17,579,644
Provision for Income Tax 26,148,181 17,953,750 3,834,252,155 3,537,831,853
Tot al Current L i ab i l i t y 627,709,913 523,782,453 5,183,977,246 4,907,745,007
L ong Term L i ab i l i t i es
Borrowing 88,203,349
Long Term Loan Net off Current Matuarity 276,622,966 116,946,155
Deffered Tax 83,591,202 61,696,537 191,893,149 197,934,495
Lease Liability 29,374,867
Tot al L ong Term L i ab i l i t ri es 360,214,168 178,642,692 221,268,016 286,137,844
Tot al L i ab i l i t i es 987,924,081 702,425,145 5,405,245,262 5,193,882,851
Sharehol d ers' Eq ui t y
Share Capital 1,362,690,930 1,238,809,940 4,279,687,010 3,890,624,560
Share Premium 76,062,352 110596499 1,473,647,979 1,473,647,979
Retained Earnings 80,779,754 89,346,843 1,601,275,518 1,628,694,442
Tot al Sharehol d ers' Com m on Eq ui t y 1,519,533,036 1,438,753,282 7,354,610,507 6,992,966,981
Tot al L i ab i l i t i es and Sharehol d ers' Eq ui t y 2,507,457,117 2,141,178,427 12,759,855,769 12,186,849,832
15 | P a g e
Comparative Income Statement

Particulars
2019 2018 2019 2018
Sales/Turnover (Net of SD & VAT) 595,171,949 572,643,469 6,463,857,312 6,331,083,301
Cost of Goods Sold (369,432,105) (371,383,485) (4,556,112,666) (4,317,689,669)
Gross Profit 225,739,844 201,259,984 1,907,744,646 2,013,393,632
Other Income 46,204,060 65,663,417

Administrative Expenses (28,397,694) (27,537,026) (400,512,718) (378,274,211)
Provision for Gratuaty (3,000,000) (3,000,000)
Imapirment Loss on Trade Receivable (5,624,637) (3,601,431)
Marketing and Selling Expenses (25,834,925) (27,941,713) (455,996,281) (411,359,546)
Operating Income and Expenses (57,232,619) (58,478,739) (815,929,576) (727,571,771)
Profit From Operative Activities 168,507,225 142,781,245 1,091,815,070 1,285,821,861
Non-Operating Income 2,806,377 2,868,609

Financial Income 32,878,148 38,410,830
Financial Expenses (54,901,308) (27,193,679) (27,323,676) (39,394,022)
Net Financial Income (52,094,931) (24,325,070) 5,554,472 (983,192)
Profit Before Contribution to Worker's Profit Participation

and Walefare Fund 116,412,294 118,456,175 1,097,369,542 1,284,838,669
Contribution to Worker's Profit Participation and Walefare Fund (5,543,443) (5,640,770) (52,965,129) (58,913,315)
Profit before Income TAX 110,868,851 112,815,405 1,044,404,413 1,225,925,354
Current TAX (30,089,097) (28,735,952) (296,420,303) (316,179,434)

Deferred TAX 6,041,346 (19,120,735)
Income TAX Expenses (30,089,097) (28,735,952) (290,378,957) (335,300,169)
Net Profit for the year after TAX 80,779,754 84,079,453 754,025,456 890,625,185
Earnings Per Share - EPS (Par value Tk 10) 0.59 0.62 1.76 2.08
Total number of Share 136,914,837 135,612,021 428,423,555 428,185,185

Market Price per share (Assumed) 10.60 11.50 26.00 28.00
16 | P a g e
Comparative Statement of Cash Flow

Particulars
2019 2018 2019 2018
Cash Flow from Operating Activities
Collection from Turnover and Others 627,988,560 574,213,545 6,450,716,308 6,026,277,449
Cash Payment for Cost and Expenses (505,505,122) (492,130,580) (4,563,582,744) (5,170,880,115)
Financial Expenses (54,901,308) (27,193,679)
Interest Received from Bank Deposits 6,832,490 5,915,987
Income TAX Paid and Deducted at Source (16,191,938) (18,259,036) (308,746,264) (293,693,008)
Net Cash Flow from Operating Activities 51,390,192 36,630,250 1,585,219,790 567,620,313
Cash Flow from Investing Activities

Accusition of Property, Plant and Equipment (278,518,097) (128,934,792) (279,524,603) (307,844,206)
Capital Working Progress (23,750,525) (41,412,710)
Sale of Property, Plant and Equipment 179,500 145,690
Disposal Proceeds of Associate 74,025,000
Interest Received from FDR 20,857,636 29,837,100
Income from Rental 12,045,000 4,605,000
Inteangible Assets (771,526) (11,950,323)
Insurance Claim Received 56,976,731
Dividend Received 200 200
Net Cash Flow from Investing Activities (302,268,622) (170,347,502) (190,237,062) (211,181,539)
Cash Flow from Financial Activities

Short-Term Loan or LATr Received 90,407,953 86,704,339
LongTerm Loan Received (Paid) 159,676,811 47,564,356
Finance Charges (18,947,425) (48,091,939)
Avai/(Replacement) of Term Loan (88,203,349) (270,959,943)
Avai/(Replacement) of Short Term Loan (220,419,498) (238,509,621)
Payment of Lease Liability (10,730,542)
Dividend Paid (386,966,131) (351,973,215)
Unclaimed Share Application Refund (8,160) (19,200)
Adjustment Related with Non-Controlling Interest (400) (400)
Net Cash Flow from Financial Activities 250,084,764 134,268,695 (725,275,505) (909,554,318)
Effect of Exchange rate Changes in Cash & Cash Equivalents (204,349) 563,565
Net Inflow of Cash & Cash Equivalents (793,666) 551,443 669,502,874 (552,551,979)
Cash & Cash Equivalents at Opening 19,769,824 19,218,381 829,807,227 1,382,359,206
Cash & Cash Equivalents at Closing 18,976,158 19,769,824 1,499,310,101 829,807,227
17 | P a g e
Comparative Statement of Changes in Equity
FU-WANG Ceramic Industries Ltd.

Particulars 2019 2018
Opening Closing Opening Closing
Share Capital 1,238,809,940 1,362,690,930 1,126,190,860 1,238,809,940
Share Premium 110,596,499 76,062,352 110,596,499 110,596,499
Retained Earnings 89,346,843 80,779,754 117,886,471 89,346,843
Tot al 1,438,753,282 1,519,533,036 1,354,673,830 1,438,753,282
RAK Ceramics (Bangladesh) Ltd.

Particulars 2019 2018
Opening Closing Opening Closing
Share Capital 3,890,624,560 4,179,687,010 3,536,931,410 3,890,624,560
Share Premium 1,473,647,979 1,473,647,979 1,473,647,979 1,473,647,979
Retained Earnings 1,628,694,442 1,601,275,518 1,445,455,970 1,628,694,442
Tot al 6,992,966,981 7,254,610,507 6,456,035,359 6,992,966,981
Bar Chart of Comparative Assets

14,000
12,760
12,187
12,000
10,000
Taka in Million
8,000
6,000
4,000
2,507
2,141
2,000
0
2019 2018
18 | P a g e
Bar Chart of Comparative Liabilities
6,000
5,408
5,194
5,000
4,000
Taka in Million
3,000
2,000
988
1,000 702
0
2019 2018
Bar Chart of Comparative Owners' Equity

8,000
7,355
6,993
7,000
6,000
5,000
Taka in Million
4,000
3,000
2,000 1,520 1,439
1,000
0
2019 2018
19 | P a g e
Bar Chart of Comparative Sales
7,000
6,464 6,331
6,000
5,000
Taka in Millions
4,000
3,000
2,000
1,000 595 573
0
2019 2018
Bar Chart of Comparative Net Profit

1,000
891
900
800 754
700
Taka in Millions
600
500
400
300
200
81 84
100
0
2019 2018
20 | P a g e
Chapter: 4
4.1 Ratio Analyses
Calculations of Financial Ratios of FU-WANG Ceramic Industries
Calculation of Financial Ratios of FU-WANG Ceramic Industries
Liq uid ity R atio s
Cur r ent R atio s

Current Assets Current Assets
Current Ratio-2019 = Current Ratio-2018 =
Current Liability Current Liability
1,160,031,755 1,042,081,600
= =
627,709,913 523,782,453
= 1.85 Times = 1.99 Times
Quick o r Acid Tes t R atio s

Quick or Acid Current Assets-Inventory Quick or Acid Current Assets-Inventory
= =
Test Ratios-2019 Current Liability Test Ratios-2018 Current Liability
1,160,031,755 - 881,664,883 1,042,081,600 - 753,810,051

= =
627,709,913 523,782,453
= 0.44 Times 0.55 Times
As s et M anag em ent R atio s
Inventory Cost of Goods Sold Inventory Cost of Goods Sold

= =
Turnover Ratio - Inventory Turnover Ratio - Inventory
369,432,105 371,383,485
= =
881,664,883 753,810,051
Days Sales Accounts Receivable Days Sales Accounts Receivable

= =
Outstanding - Annual Sales / 360 Outstanding - Annual Sales / 360
96,146,171 126,156,405
= =
595,171,949 / 360 572,643,469 / 360
= 58.16 Days = 79.31 Days
Fixed Asset Sales Fixed Asset Sales

= =
Turnover - 2019 Net Fixed Assets Turnover - 2018 Net Fixed Assets
595,171,949 572,643,469
= =
1,347,425,362 1,099,096,827
21 | P a g e
Total Asset Sales Total Asset Sales
= Turnover - =
Turnover - 2019 Total Asset 2018 Total Asset
595,171,949 572,643,469
= =
2,507,457,117 2,141,178,427
Debt M anagement R atio s
Debt to Total Total Liabilities Debt to Total Total Liabilities

= =
Assets - 2019 Total Asset Assets - 2018 Total Asset
987,924,081 702,425,145
= =
2,507,457,117 2,141,178,427
= 39.40 Percent = 32.81 Percent
Times Interest Earnings Before Income TAX Times Interest Earnings Before Income TAX
= =
Earned - 2019 Interest Charges Earned - 2018 Interest Charges
110,868,851 112,815,405
= =
54,901,308 27,193,679
Pr o fitability R atio s
Net Profit Margin - Net Profit Net Profit Net Profit

= =
2019 Sales Margin - 2018 Sales
80,779,754 84,079,453
= =
595,171,949 572,643,469
Return on Total Net Income Net Profit Net Income

= =
Assets - 2019 Total Assets Margin - 2018 Total Assets
80,779,754 84,079,453
= =
2,507,457,117 2,141,178,427
22 | P a g e
Market/Book Market/Book
Market Price per Share Market Price per Share
(M/B) Ratio - = (M/B) Ratio - =
2019 Book Value Per Share 2018 Book Valur per Share
10.60 11.50
= =
10.00 10.00
Calculation of Financial Ratios of RAK Ceramics (Bangladesh) Ltd
Liquidity R atio s
Cur r ent R atio s

Current Ratio- Current Assets Current Ratio- Current Assets
= =
2019 Current Liability 2018 Current Liability
8,846,156,126 8,155,351,878
= =
5,183,977,247 4,907,745,007
23 | P a g e
Quick o r Acid Test R atio s
Quick or Acid Current Assets-Inventory Quick or Acid Test Current Assets-Inventory
= =
Test Ratios-2019 Current Liability Ratios-2018 Current Liability
8,846,156,126 - 2,785,630,242 8,155,351,878 - 3,005,616,081

= =
5,183,977,247 4,907,745,007
Asset M anagement R atio s
Inventory Cost of Goods Sold Inventory Turnover Cost of Goods Sold

Turnover Ratio - = =
2019 Inventory Ratio - 2018 Inventory
4,556,112,666 4,317,689,669
= =
2,785,630,242 3,005,616,081
Days Sales Accounts Receivable Days Sales Accounts Receivable

Outstanding - = =
1019 Annual Sales / 360 Outstanding - 1018 Annual Sales / 360
859,960,257 871,791,127
= =
6,463,857,312 / 360 6,331,083,301 / 360
= 47.89 Days = 49.57 Days
Fixed Asset Sales Fixed Asset Sales

= =
Turnover - 2019 Net Fixed Assets Turnover - 2018 Net Fixed Assets
6,463,857,312 6,331,083,301
= =
3,913,701,037 4,031,499,500
Total Asset Sales Total Asset Turnover Sales

= =
Turnover - 2019 Total Asset - 2018 Total Asset
6,463,857,312 6,331,083,301
= =
12,759,857,163 12,186,851,378
24 | P a g e
Debt M anagement R atio s
Debt to Total Total Liabilities Debt to Total Total Liabilities

= =
Assets - 2019 Total Asset Assets - 2018 Total Asset
5,408,245,263 5,193,882,851
= =
12,759,857,163 12,186,851,378
Times Interest Earnings Before Income TAX Times Interest Earnings Before Income TAX
= =
Earned - 2019 Interest Charges Earned - 2018 Interest Charges
1,044,404,413 1,225,925,354
= =
27,323,676 39,394,022
= 38.22 Times = 31.12 Times
Pr o fitability R atio s
Net Profit Margin - Net Profit Net Profit Margin - Net Profit
= =
2019 Sales 2018 Sales
754,025,456 890,625,185
= =
6,463,857,312 6,331,083,301
Return on Total Net Income Net Profit Margin - Net Income

= =
Assets - 2019 Total Assets 2018 Total Assets
754,025,456 890,625,185
= =
12,759,857,163 12,186,851,378
Return on Equity - Net Income Available To Stockholders Return on Equity - Net Income Available To Stockholders
= =
2019 Common Equity 2018 Common Equity
754,025,456 890,625,185
= =
7,354,610,507 6,992,966,981
25 | P a g e
M ar k et V alue R atio s
Price/Earnings (P/E) Market Price per Share Price/Earnings (P/E) Market Price per Share
= =
Ratio - 2019 Earnings per Share Ratio - 2018 Earnings per Share
26.00 28.00
= =
1.76 2.08
= 14.77 Times = 13.46 Times
Market/Book (M/B) Market Price per Share Market/Book (M/B) Market Price per Share
= =
Ratio - 2019 Book Value Per Share Ratio - 2018 Book Valur per Share
26.00 28.00
= =
10.00 10.00
26 | P a g e
Comparative Ratio Analysis of
FU-WANG Ceramic Industries Ltd &
RAK Ceramics (Bangladesh) Ltd
FU-WANG Ceramic Industries Ltd RAK Ceramics (Bangladesh) Ltd

Ratio Ratio Value - Ratio Value - Ratio Value - Ratio Value -
2019 2018 2019 2018
Liquidity Ratios
Current Ratio 1.85Times 1.99Times 1.71Times 1.66Times
Quick or Acid Test Ratios 0.44Times 0.55Times 1.17Times 1.05Times
Asset Management Ratios
Inventory Turnover Ratio 0.42Times 0.49Times 1.64Times 1.44Times
Days Sales Outstanding 58.16Days 79.31Days 47.89Days 49.57Days
Fixed Asset Turnover 0.44Times 0.52Times 1.65Times 1.57Times
Total Asset Turnover 0.24Times 0.27Times 0.51 Times 0.52 Times
Debt Management Ratios
Debt to Total Assets 39.40% 32.81% 0.51% 0.52%
Times Interest Earned 2.02Times 4.15Times 42.38Times 42.62Times
Profitability Ratios
Net Profit Margin 13.57% 14.68% 11.67% 14.07%
Return on Total Assets 3.22% 3.93% 5.91% 7.31%
Return on Equity 5.32% 5.84% 10.25% 12.74%
Market Value Ratios
Price/Earnings (P/E) Ratio 17.97Times 18.55Times 14.77Times 13.46Times
Market/Book (M/B) Ratio 1.06Times 1.15Times 2.60Times 2.80Times
ROE Comparative Graph

25.00
20.00
Percentage
15.00
10.00
5.00
0.00
Net Profit 2019 Net Profit 2018
27 | P a g e
4.2 Liquidity Ratio:
Liquidity ratios are used to determine a company’s ability to meet its short-term debt
obligations. Investors often take a close look at liquidity ratios when performing fundamental
analysis on a firm. A class of financial metrics that is used to determine the company's ability to
pay off its short-terms debts obligations. The liquidity ratio is the result of dividing the total cash
by short-term borrowings.
Current Ratio:
The current ratio is the first of financial ratios that we will examine. In this case, the current ratio
measures a company’s current assets against its current liabilities. If current liabilities are rising
more rapidly than current asset, the current ratio will fall which could spell trouble.

Ratio
2019 2018 2019 2018
Current Ratio 1.85 1.99 1.71 1.66
Fu-WangCeramics:
For 1taka worth of current liabilities of Fu-Wang ceramics has 2018 to 2019 accordingly 1.99,
1.85 taka worth of current assets. This current ratio has decreased from 2018 to 2019. The lower
ratio valueindicates the liquidity position weakest and the higher ratio indicates the liquidity is
strong.So,here Fu –Wang ceramics reached low liquidity position in 2019.
RAK Ceramics:
For 1 taka worth of current liabilities of RAK ceramics has increased from 2018 to 2019
accordingly 1.66, 1.71, taka worth of current assets. The ratio value from 2018 to 2019
variability is High. So, here RAK ceramics has reached high liquidity position in 2019
Current Ratio
2.2
2
1.8
1.6
1.4
2018 2019
FIGURE:CURRENT RATIO OF FU-WANG& RAK
28 | P a g e
Comparative Analysis:
The graph and the table show Fu-Wang and RAK ceramics current ratio value is almost same
over the year that’s why variability is low but the ratio value always higher than 1. The RAK
ceramics is not fully covered by cash. On the other hand, though Fu-Wang ceramics ratio values
variability is lowbut the ratio value always more than 1 that’s why is fully covered by cash.
The evaluation of the liquidity ratios of the both companies, we can say RAK ceramics is doing
better in comparison with Fu-Wang Ceramics. In simple words we can say RAK is in a better
position from Fu-Wang to pay of their liabilities with cash or equivalent assets.
Quick Ratio:
The quick ratio, also known as the acid-test ratio, is a liquidity ratio that is more refined and
more stringent than the current ratio. Instead of using current assets in the numerator, the quick
ratio uses a figure that focuses on the most liquid assets. The main asset left out is inventory,
which can be hard to liquidate at market value in a timely fashion. The quick ratio is more
conservative than the current ratio and focuses on cash, short-term investments and accounts
receivable. Inventory typically is the least liquid of a firm’s current asset, so they are the asset on
which losses are most likely to occur in the event of a quick liquidation. Therefore, a measure of
the firm’s ability to pay off short term obligations without relying on the sale of inventories is
important.
TABLE: QUICK RATIO OF FU-WANG&RAK
Quick Ratio FU-WANG Ceramic Industries Ltd RAK Ceramics (Bangladesh) Ltd
2018 0.55 1.17
2019 0.44 1.05
Fu-Wang Ceramics:
The ratio value from 2018 to 2019 is accordingly 0.55, and 0.44. The ratio value indicates there
is a low variability. In 2019 the ratio value is high that is 0.44 and in 2019 the ratio value is low
that is 0.44.
RAK Ceramics:
The ratio value from 2018 to 2018 is accordingly 1.17 and 1.05. The ratio value indicates there is
a low variability. In 2018 the ratio value 0.59 is highest and in 2019 the ratio value 1.05 is
lowest.
29 | P a g e
Quick Ratio
1.5
0.5
0
2018 2019
FIGURE: QUICK RATIO OF FU-WANG& RAK
The graph and the table shows Fu-Wang and RAK ceramics quick ratio value is almost same
over the year that’s why variability is low but the ratio valueof RAK is always higher than
1that’s why Fu-Wang ceramics does not fully covered by cash on the other hand RAK ceramics
only in 2019 its value higher than 1 otherwise greater than 1 that’s why it’s may said to be fully
covered by cash.
4.2 Asset Management:

Asset management ratio measures how efficiency the firm is managing its asset. These ratios are
design to answer the flowing question: does the total amount of each types of asset as reported
on the balance sheet seem reasonable, too high, or too low in view of current and projected sales
level? Firms invest in asset to generate revenue both in current period and in future period. Asset
management ratios are:
Asset Management Ratios

2018 2019 2018 2019
Inventory Turnover Ratio 0.42Times 0.49Times 1.64Times 1.44Times
Days Sales Outstanding 58.16Days 79.31Days 47.89Days 49.57Days
Fixed Asset Turnover 0.44Times 0.52Times 1.65Times 1.57Times
Total Asset Turnover 0.24Times 0.27Times 0.51 Times 0.52 Times
Inventory Turnover Ratio:

The inventory turnover ratio is one of the most important financial ratios. Of all the asset
management ratios, it gives the business owner some of the most important financial
information.
30 | P a g e
This ratio gauges the liquidity of the firm's inventory. It also helps the business owner determine
how they can increase their sales through inventory control. Generally, a high inventory ratio
means that the company is efficiently managing and selling its inventory. The faster the
inventory sells the fewer funds the company has tied up.
Companies have to be careful if they have a high inventory turnover as they are subject to stock
outs. If a company has a low inventory turnover ratio, then there is a risk they are holding
obsolete inventory which is difficult to sell.
Inventory Turnover Ratio FU-WANG Ceramic Industries Ltd RAK Ceramics (Bangladesh) Ltd
2018 0.42Times 1.64Times
Inventory Turnover Ratio

1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
2018 2019
FIGURE: INVENTORY TURNOVER RATIO OF FU-WANG and RAK
Fu-Wang Ceramics:
The ratio value from 2018 to 2019 is accordingly 0.42 Times and 0.49 Times. The ratio value
indicates there is a high variability. In 2018 the ratio value is low that is 0.42 and in 2019 the
ratio value is high that is 0.49.
The graph shows from 2018 to 2019variability is High.
31 | P a g e
RAK Ceramics:
The ratio value from 2018 to 2019is accordingly 1.64 and 1.44. The ratio value indicates there is
a low variability. In 2018 the ratio value 1.64 is highest than in 2019 the ratio value 1.44 is
lowest.
The graph shows from 2018 to 2019 variability is low over the year.
The graph and the table show that as per the inventory turnover ratio RAK ceramics is higher
than Fu-Wung. But Fu-Wangceramics inventory turnover ratio values variability is higher but
RAK ceramics inventory turnover ratio value is almost low over the year that’s why variability is
low.
Fixed Asset Turnover Ratio:

The fixed asset turnover ratio measures the company's effectiveness in generating sales from its
investments in plant, property, and equipment. It is especially important for a manufacturing firm
that uses a lot of plant and equipment in its operations to calculate this ratio.
The denominator in the equation should be net of accumulated depreciation.If the fixed asset
turnover ratio is low as compared to the industry or past years of data for the firm, it means that
sales are low or the investment in plant and equipment is too high. This may not be a serious
problem if the company has just made an investment in fixed asset to modernize, for example.If
the fixed asset turnover ratio is too high, then the business firm is likely operating over capacity
and needs to either increase its asset base to support its sales or reduce its capacity.
If the fixed asset turnover ratio is too high, then the business firm is likely operating over
capacity and needs to either increase its asset base (plant, property, equipment) to support its
sales or reduce its capacity.
TABLE:FIXED ASSET TURNOVER RATIOof Fu-Wang and RAK
Fixed Asset Turnover Ratio FU-WANG Ceramic Industries Ltd RAK Ceramics (Bangladesh) Ltd
32 | P a g e
Fixed Asset Turnover Ratio
1.8
1.6
1.4
1.2
0.8
0.6
0.4
0.2
0
2018 2019
FIGURE: FIXED ASSET TURNOVER RATIO OF FU-WANG and RAK Ceramics
Fu-Wang Ceramics:
The ratio value from 2018 to 2019 is accordingly0.44 and 0.52. The ratio value from 2018 to
2019 indicates there is a high variability.In 2019 it has increased.
The graph shows from 2018 to 2019 variability is high and in 2019 it has increased.
RAK Ceramics:
2019 indicates there is a low variability over the year. In 2018 the ratio value 1.65is highest and
in 2019 the ratio value 1.57 is lowest.
The graph and the table show, Fu-Wang ceramics fixed asset turnover ratio values variability is
high but the RAKceramics fixed asset turnover ratio value is almost same over the year that’s
why variability is low.
33 | P a g e
Total Asset Turnover Ratio:
The total asset turnover ratio measures the ability of a company to use its assets to efficiently
generate sales. This ratio considers all assets, current and fixed. Those assets include fixed assets,
like plant and equipment, as well as inventory, accounts receivable, as well as any other current
assets. The lower the total asset turnover ratio (the lower the # Times), as compared to historical
data for the firm and industry data, the more sluggish the firm's sales. This may indicate a
problem with one or more of the asset categories composing total assets - inventory, receivables,
or fixed assets. The small business owner should analyze the various asset classes to determine in
which current or fixed asset the problem lies. The problem could be in more than one area of
current or fixed assets
TABLE: TOTAL ASSET TURNOVER RATIO OF FU-WANG& RAK
Total Asset Turnover Ratio FU-WANG Ceramic Industries Ltd RAK Ceramics (Bangladesh) Ltd
2018 0.27 Times 0.52 Times
2019 0.24 Times 0.51 Times
Total Asset Turnover Ratio

0.6
0.5
0.4
0.3
0.2
0.1
0
2018 2019
FIGURE: TOTAL ASSET TURNOVER RATIO OF FU-WANG& RAK
Fu-Wang ceramics:
The ratio value from 2018 to 2019 is accordingly 0.27 and 0.24. The ratio value from 2018 to
2019 indicates there is a high variability. In 2019 it has decreased. In 2019 the ratio value is
lowest that is 0.24 and in 2018 the ratio value is highest that is 0.27.
34 | P a g e
The graph shows from 2018 to 2019 variability is low and in 2019 it has decreased.
RAK ceramics:
The ratio value from 2018 to 2019 is accordingly 0.52 and 0.51. The ratio value from 2018 to
2019 indicates there is a low variability. In 2019 it has decreased. In 2019 the ratio value is
lowest that is 0.51 and in 2018 the ratio value is highest that is 0.52.
The graph shows from 2018 to 2019 variability is low and in 2019 it has decreased.
The graph and the table shows, the Shinepukur Fu-Wang and RAK ceramics total asset turnover
ratio value is almost same over the year that’s why variability is low.
4.3 Debt Management Ratio:

A ratio of a company's debt to its total financing. The debt management ratio measures how
much of a company's operations personal savings come from debt instead of other forms of
financing, such as stock o. The debt management ratio is one measure among many of a
company's risk and likelihood of default. The debt management ratio measures the firm's ability
to repay long-term debt by indicating the percentage of a company's asset that is provided via
debt.
A measure of the extent to which a firm uses borrowed funds to finance its operations. Owners
and creditors are interested in debt management ratios because the ratios indicate the riskiness of
the firm's position. Debt management ratios are:

2019 2018 2019 2018
Debt Management Ratios
Debt to Total Assets 39.40% 32.81% 0.51% 0.52%
Times Interest Earned 2.02Times 4.15Times 42.38Times 42.62Times
Debt to Total Asset Ratio:

The debt to total assets ratio is an indicator of financial leverage. It tells you the percentage of
total assets that were financed by creditors, liabilities, debt. Debt ratios measure the firm's ability
to repay long-term debt. It is a financial ratio that indicates the percentage of a company's assets
that are provided via debt. It is the ratio of total debt (the sum of current liabilities and long-term
liabilities) and total assets (the sum of current assets, fixed assets, and other assets such as
'goodwill').
35 | P a g e
The higher the ratio, the greater risk will be associated with the firm's operation. In addition, high
debt to assets ratio may indicate low borrowing capacity of a firm, which in turn will lower the
firm's financial flexibility. Like all financial ratios, a company's debt ratio should be compared
with their industry average or other competing firms.
If the ratio is less than 0.5, most of the company's assets are financed through equity. If the ratio
is greater than 0.5, most of the company's assets are financed through debt. Companies with high
debt/asset ratios are said to be "highly leveraged," not highly liquid as stated above. A company
with a high debt ratio (highly leveraged) could be in danger if creditors start to demand
repayment of debt.
TABLE: DEBT TO TOTAL ASSET RATIO OF FU-WANG& RAK
Debt to Total Assets Ratio FU-WANG Ceramic Industries Ltd RAK Ceramics (Bangladesh) Ltd
2018 32.81% 52%
2019 39.40% 51%
Debt to Total Assets

60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
2018 2019
FIGURE: DEBT TO TOTAL ASSET RATIO OF FU-WANG& RAK
36 | P a g e
Fu-Wang ceramics:
The ratio value from 2018 to 2019 is accordingly32.81% and39.40%. The ratio value from 2018
to 2019 indicates there is a high variability and the value always within 39% that indicates most
of the company's assets is financed through equity. In 2018 the ratio value is lowest that is
32.81% and in 2019 the ratio value is highest that is 39.40%.
The graph shows from 2018 to 2019 variability is high over the year and Debt to total asset ratio
ranges from 0.00% to.10.00% that indicates most of the company's assets is financed through
equity.
RAK ceramics:
The ratio value from 2018 to 2019 is accordingly52% and 51%. The ratio value from 2018 to
2019 indicates there is a low variability over the year. In 2019 the ratio value is greater than 50%
indicates the most of the company's assets are financed through debt otherwise the ratio value is
less than 10%that indicates most of the company's assets are financed through equity. In 2018
the ratio value 52% is highest and in 2019 the ratio value 51% is lowest.
The graph shows from 2018 to 2019 variability is low over the year. The ratio value is less than
1%. The ratio value is greater than 50% indicates the most of the company's assets are financed
through debt otherwise the ratio value is less than 50% that indicates most of the company's
assets are financed through equity.
The graph and the table shows, Fu-Wang and RAK ceramics debt to total asset ratio value is
almost same over the year that’s why variability is low. The ratio value is almost every year less
than 10% that indicates most of the company's assets are financed through equity. Debt to total
asset ratio value 50% means that half of the company's assets are financed through debts. Debt
ratio ranges from 30% to 50%. Lower value of debt ratio is favorable and a higher value
indicates that higher portion of company's assets are claimed by its creditors which means higher
risk in operation since the business would find it difficult to obtain loans for new projects.
Time Interest Earned Ratio:

The time interest earned (TIE) ratio measures the extent to which a firm’s earnings before
interest and ax (EBIT) also called net operating income, can decline before these earning is
unable to cover annual interest cost. Failure to meet this obligation can bring legal action by the
firm’s creditor
37 | P a g e
TABLE: TIME INTEREST EARNED RATIO OF FU-WANG& RAK
Times Interest Earned FU-WANG Ceramic Industries Ltd RAK Ceramics (Bangladesh) Ltd
Times Interest Earned

45
40
35
30
25
20
15
10
0
2018 2019
FIGURE: TIME INTEREST EARNED RATIO OF FU-WANG& RAK
Fu-Wang ceramics:
The ratio value from 2018 to 2019 is accordingly4.5 and 2.2. The ratio value from 2018 to 2019
indicates there is a low variability over the year.In 2019 the ratio value is lowest 2.2 and in 2018
the ratio value is highest that is 4.5.
RAK ceramics:
2019 indicates there is a low variability over the year. In 2018 the ratio value42.62is highest and
in 2019 the ratio value 42.38 is lowest.
38 | P a g e
The graph and the table showFu-Wangceramics time interest earned ratio values variability is
less but the RAKceramics time interest earned ratio value is almost same over the year that’s
why variability is low. Overall highest ratio value is RAK ceramic that is 42.38 and lowest Fu-
Wang ceramics that is -2.02 Times.
4.4 Profitability Ratio:

Profitability ratios are the most popular metrics used in financial analysis. A class of financial
metrics that are used to assess a business's ability to generate earnings as compared to its
expenses and other relevant costs incurred during a specific period of time. For most of these
ratios, having a higher value relative to a competitor's ratio or the same ratio from a previous
period is indicative that the company is doing well
Some examples of profitability ratios are profit margin, return on assets and return on equity. It is
important to note that a little bit of background knowledge is necessary in order to make relevant
comparisons when analyzing these ratios.Profitability ratios are:

2019 2018 2019 2018
Profitability Ratios
Net Profit Margin 13.57% 14.68% 11.67% 14.07%
Return on Total Assets 3.22% 3.93% 5.91% 7.31%
Return on Equity 5.32% 5.84% 10.25% 12.74%
Net Profit Margin Ratio:

The profit margin is one of the most used profitability ratios. The profit margin refers to the
amount of profit that a company earns through sales. The profit margin ratio is broadly the ratio
of profit to total sales times one hundred percent. The higher the profit margin, the more profit a
company earns on each sale. The profit margin is mostly used for internal comparison. It is
difficult to accurately compare the net profit ratio for different entities. A low profit margin
indicates a low margin of safety and a higher risk that a decline in sales will erase profits and
result in a net loss or a negative margin.
TABLE: NET PROFIT MARGIN RATIO OF FU-WANG& RAK
Net Profit Margin FU-WANG Ceramic Industries Ltd RAK Ceramics (Bangladesh) Ltd
2018 14.68% 14.07%
2019 13.57% 11.67%
39 | P a g e
Net Profit Margin
16.00%
14.00%
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
2018 2019
FIGURE: NET PROFIT MARGIN RATIO OF FU-WANG& RAK
Fu-Wang ceramics:
The ratio value from 2018 to 2019 is accordingly14.68% and 13.57%. From 2018 to 2019year
the ratio value indicates the percentages of profit that Fu-Wang ceramics earns through sales. It
measures lower risk and high margin of safety. In profit margin ratio is (-) negative that indicates
a low margin of safety and a higher risk that a decline in sales will erase profits and result in a
net loss or a negative margin.
The graph shows from 2018 to 2019 their earn profit decreased 1.11% = 14.68% - 13.57%.
RAK ceramics:
The ratio value from 2018 to 2019 is accordingly 14.07% and 11.67%. The ratio value from
2018 to 2019 indicates there is a low variability over the year. From 2018 to 2019 the ratio value
indicates the percentages got low of profit that RAK ceramics earns through sales. It measures
lower risk and high margin of safety. They earn maximum in 2018 an amount of 14.07% and
minimum earn in 2019 an amount of11.67%.
The graph shows from 2018 to 2019RAK ceramics the earn profit over the year has decreased
2.40% = 14.07% - 11.67%.
40 | P a g e
The graph and the table show, RAK ceramics profit margin ratio values variability is high and
percentage is also high 2.40% but the Fu-Wang ceramics profit margin ratio value is almost same
over the year that’s why variability is low and the percentage is 1.11%. So hereFu-Wang
ceramics profit margin ratio value indicates the percentages of profit earns through sales
measuring lower risk and high margin of safety.
Return of Total Asset (ROA) Ratio:

The Return on Assets ratio is an important profitability ratio because it measures the efficiency
with which the company is managing its investment in assets and using them to generate profit.
It measures the amount of profit earned relative to the firm's level of investment in total assets. It
is also a measure of how much the company relies on assets to generate profit. The return on
assets ratio is related to the asset management category of financial ratios.
The higher the percentage is better, because that means the company is doing a good job using its
assets to generate sales.
TABLE: RETURN ON TOTAL ASSET (ROA) OF FU-WANG&RAK
Return on Total Assets FU-WANG Ceramic Industries Ltd RAK Ceramics (Bangladesh) Ltd
2018 3.93% 7.31%
2019 3.22% 5.91%
Return on Total Assets

8.00%
7.00%
6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
2018 2019
41 | P a g e
FIGURE: RETURN ON TOTAL ASSET (ROA) OF FU-WANG& RAK
Fu-Wang Ceramics:
The ratio value from 2018 to 2019 is accordingly 3.93%&3.22%. From 2018 to 2019the ratio
value indicates the percentage of taka is earned on every 100 taka assets. The highest ratio value
is 3.93% in 2018 that indicate highest return on asset.
The graph shows from 2018 to 2019 Fu-Wang ceramics earn3.22% of taka is earned on every
100 taka assets. It also measure high safety and lower risk.
RAK ceramics:
The ratio value from 2018 to 2019 is accordingly 7.31%and 5.91%.From 2018 to 2019 the ratio
value indicates the percentage of taka is earned on every 100 taka assets. There is a very high
variability over the year. The highest ratio value is 7.31% in 2018 that indicate highest return on
asset.
The graph shows from 2018 to 2019 RAK ceramics earn 5.91% of taka is earned on every 100
taka assets. It also measure high safety and lower risk. The variability is very high over the year
The graph and the table show, RAK ceramics return on total asset ratio(ROA) values variability
is high but the Fu-Wang ceramics return on total asset ratio (ROA) values is almost same over
the year that’s why variability is low. Fu-Wangceramics return on total asset ratio (ROA)
indicates the percentages values measuring lower risk and high safety because Fu-Wang earn
comparatively high other than RAK ceramics industry.
Return on equity (ROE) ratio:

The Return on Equity ratio is perhaps the most important of all the financial ratios to investors in
the company. It measures the return on the money the investors have put into the company. This
is the ratio potential investors look at when deciding whether or not to invest in the company.
The return on equity (ROE) measures profitability related to ownership. It measures a firm's
efficiency at generating profits from every unit of the shareholders' equity. The higher the
percentage is better, with some exceptions, as it shows that the company is doing a good job
using the investors' money. ROEs between 15 percent and 20 percent are generally considered
good. The ROE is equal to the net income divided by the shareholders’ equity.
42 | P a g e
TABLE: RETURN ON EQUITY (ROE) OF FU-WANG&RAK
Return on Equity FU-WANG Ceramic Industries Ltd RAK Ceramics (Bangladesh) Ltd
2018 5.84% 12.74%
2019 5.32% 10.25%
Return on Equity
14.00%
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
2018 2019
FIGURE: RETURN ON EQUITY (ROE) OF FU-WANG& RAK
Fu-Wang ceramics:
The ratio value from 2018 to 2019 is accordingly5.84% and5.32%. From 2018 to 2019 the ratio
value indicates the percentage of taka is earned on every100 taka equity. The highest ratio value
is 84.7% in 2018 that indicate highest return on equity.
The graph shows from 2018 to 2019 Fu-Wang ceramics earn % of taka is earned on every 100
taka invested by the owners. It also measures high safety and lower risk.
RAK ceramics:
The ratio value from 2018 to 2019 is accordingly 12.74% and 10.25%.From 2018 to 2019 the
ratio value indicates the percentage of taka is earned on every 100 taka invested by the owners.
There is a low variability over the year and the ratio value measure high safety and low risk. The
highest ratio value is 12.74% in 2018 that indicate highest return on equity.
43 | P a g e
The graph shows from 2018 to 2019 RAK ceramics earn 12.74% of taka is earned on every 100
taka invested by the owners. It also measures high safety and lower risk. The variability is low
over the year. The ceramics industry is not in a good position.
The graph and the table show, RAK ceramics return on equity ratio (ROE) values variability is
high and ratio value is low but the Fu-Wang ceramics return on equity ratio (ROE) values is
almost same over the year that’s why variability is low and the ratio value is high.Fu-Wang
ceramics measure low safety and high risk in its position on the other hand RAK ceramics return
on equity ratio (ROE) indicates the percentages values measuring lower risk and high safety
because they earn comparatively high other than ceramics industry.
4.5 Market Value Ratios:

The market value ratios are important for investors, management,etc as these ratios are used to
decide whether the valuation of the shares is overvalued, undervalued or at par with the
market. These ratios are used for making investment decisions in stocks of companies.
While making investment in stocks, there are various financial metrics which are used to
properly evaluate the prices of the shares or the market value of the shares so that the investment
does not become a losing proposition. The decision of buying and selling shares is very
important. And if not done at the right price then the money invested can turn into
losses. So, market value ratios calculation and interpretation is very crucial; for share market
investments as well as in other investments; and for the company management as well.
And thus, valued correctly in the market or they are trading at a higher price or lower. The
overvaluation or undervaluation of share helps investors decide whether they should go long or
short on the shares they are going to invest in.

2019 2018 2019 2018
Market Value Ratios
Price/Earnings (P/E) Ratio 17.97Times 18.55Times 14.77Times 13.46Times
Market/Book (M/B) Ratio 1.06Times 1.15Times 2.60Times 2.80Times
Earnings Per Share (EPS):

Earnings per share (EPS) are the dollar / Tk value of earnings per each outstanding share of a
company's common stock.
44 | P a g e
Earnings per share are generally considered to be the single most important variable in
determining a share's price. It is also a major component used to calculate the price-to-earnings
valuation ratio.
TABLE: EARNING PER SHARE (EPS) OF FU-WANG&RAK
Price/Earnings (P/E) Ratio FU-WANG Ceramic Industries Ltd RAK Ceramics (Bangladesh) Ltd
2018 18.55 Times 13.46 Times
2019 17.97 Times 14.77 Times
Price/Earnings (P/E) Ratio

20
18
16
14
12
10
8
6
4
2
0
2018 2019
FIGURE: EARNING PER SHARE (EPS) OF FU-WANG&RAK
Fu-Wang ceramics:
Fu-Wang ceramics earned 2018 to 2019 accordingly 18.55 and17.97 taka per share.
RAK:
RAK ceramics earned 2018 to 2019 accordingly 13.46 and 14.77 taka per share.
Comparative analysis:
The graph and the table show, RAK ceramics earning per share (EPS) variability is high.
Sometimes they earned more and sometimes loss in respect of the previous year. But the Fu-
Wang ceramics earning per share (EPS) variability is High rather than RAK. Here RAK
ceramics earn less but not losses over the year.
45 | P a g e
CHAPTER 5:
5.1 Comments:
Comments onfinding from ratio analysis:
Current Ratio:
The current ratio shows RAK ceramics is in good position other than fu-wangceramics.
BecauseRAK ceramics ratio value always more than 1 that’s why it’s fully covered by cash.
Quick Ratio:
The firm’s ability to pay off short term obligations without relying on the sale of inventories is
important. The ratio vaue indicatesFu-Wang ceramics does not fully covered by cash over the
year on the other hand RAK ceramics its value less than 1 otherwise greater than 1 that’s why
it’s may said to be fully covered by cash.
Inventory Turnover Ratio:

The inventory turnover ratio measures the efficiency of the business in managing and selling its
inventory. A high inventory ratio means that the company is efficiently managing and selling its
inventory. In case of our analysis Fu-Wang and RAK ceramics inventory turnover ratio values
are high and but Fu-Wang ceramics ratio value is low. So the ratio value measures RAK
ceramics is efficiently managing and selling its inventory but Fu-Wang is efficient but less than
others ceramics companies limited.
Fixed Asset Turnover Ratio:

The fixed asset turnover ratio of Fu-wang ceramics is low as compared to the RAK ceramics, it
means that sales are low or the investment in plant and equipment is too high.
Total ASSET TURNOVER RATIO:

RAK ceramics total asset turnover ratio indicates use its assets to efficiently generate sales than
Fu-Wang ceramics.
Debt to Total Asset Ratio:

Fu-Wang and RAK ceramics debt to total asset ratio value is almost same over the year that’s
why variability is low.Debt to total asset ratio values variability is high the ratio values are
almost every year more than 0.5 thatindicates themost of the company's assets are financed
46 | P a g e
through debt. The ratio value is almost every year less than 0.5 that indicatesmost of the
company's assets are financed through equity.
Time Interest Earned Ratio:

Fu-Wangand RAK ceramics time interest earned ratio values arehigh over the year.
Net Profit Margin Ratio:

Fu-Wang ceramics profit margin ratio values are low over the year that indicates the percentages
of profit earns through sales measuring higher risk and lower margin of safety. RAKceramics
profit margin ratio values are high over the year that indicates the percentages of profit earns
through sales measuring lower risk and high margin of safety.
Return of Total Asset (ROA) Ratio:

Fu-Wang ceramics return on total asset (ROA) ratio measures lower percentages and it indicates
higher risk and lower safety because they earn comparatively low other than ceramics industry.
RAK ceramics return on total asset ratio(ROA) indicates the percentagesvalues measuring lower
risk and high safety because they earn comparatively high other than ceramics industry.
Return on Equity (ROE) Ratio:

Fu-Wang ceramics return on equity (ROE) values measure low safety and high risk other than
ceramics limited. On the other hand, RAK ceramics return on equity ratio(ROE) indicates the
percentages ofvalues measuring lower risk and high safety because they earn comparatively high
other than ceramics industry.
Earnings Per Share (EPS):

The EPS vales shows Fu-Wang sometimes get loss but overall Fu-wang earn more other than
RAK ceramics limited. On the other hand, RAK ceramics earn less but not losses over the year.
47 | P a g e
Chapter 6:
6.1 Recommendations:
After studying the total scenario of Ceramics industries Limited, the following recommendations
may be offered for improving present condition of the market as well as its prospects:
• The Ceramics industries limited should maintain the liquidity, profitability, asset
management and debt management ratio.
• The Ceramics industries limited should follow the ratio analysis and try to improve their
loss and maintain their profit.
• The Ceramics industries should inform its consumers and customers about the new
improvement of its products.
• The Ceramics industries limited can encourage its customers (retailers) by providing
different types of trade offers, complementary samples, gift offerings etc.
• The Ceramics industries limited should confirm the availability of its products for more
convenience of the end users;
• The Ceramics industries limitedshould cover as much outlet it can ensuring the
availability of the brands.
• The Ceramics industries limited should make aware all about its brand to the consumers
as well as customers for creating image of brand assistance;
• The Ceramics industries limited should improve its merchandising activities to get an
improved market shares as it has enough scope to increase the same;
• The Ceramics industries limited increase its advertising efforts. Billboard may be the best
way in advertising of its products;
• The Ceramics industries limited can arrange cultural programs like–verities shows, folk
concerts etc under its brand to improve brand image in the mind of people;
• The Ceramics industries limited should increase the annual budget for merchandising
expenses.
48 | P a g e
CHAPTER 7:
7.1 Cash Conversion Cycle:
To further analyze the financial strengths of a company, we must study the working capital of the
company. To study working capital, we should know the length of time between actual cash
expenditure to pay for the productive resources and its own cash receipts from the sales of the
product. It is called the Cash Conversion Cycle. The process of investment and return sales will
continue in a cycle.
Calculation of Cash Conversion Cycle:

Cash Conversion Cycle of Fu-Wang Ceramic Cash Conversion Cycle of RAK Ceramics
Industries Limited (Bangladesh) Limited
Inventory Inventory Inventory Inventory

Conversion = Cost of Goods Sold Per Conversion = Cost of Goods Sold Per
Period Day Period Day
Inventory Inventory
= =
(Cost of Goods Sold/360) (Cost of Goods Sold/360)
Inventory X 360 Inventory X 360
= =
Cost of Goods Sold Cost of Goods Sold
881,664,883 X 360 2,785,630,242 X 360
= =
369,432,949 4,317,689,669
= 859 Days = 232 Days
Receivables Receivables Receivables Receivables
Collection = Collection =
Period Daily Credit Sales Period Daily Credit Sales
Receivables Receivables
= =
(Annual Credit Sales/360) (Annual Credit Sales/360)
Receivables X 360 Receivables X 360
= =
Annual Credit Sales Annual Credit Sales
96,146,171 X 360 859,960,257 X 360
= =
595,171,949 6,463,857,312
= 58 Days = 48 Days
Note: Total sales value is considered here as no Note: Total sales value is considered here as
credit salse data was provided no credit salse data was provided
49 | P a g e
Accounts Payable Payable Accounts Payable
Payable
= Deferral =
Deferral Period
Daily Credit Purchases Period Daily Credit Purchases
Accounts Payable Accounts Payable
= =
(Cost of Goods Sold/360) (Cost of Goods Sold/360)
Accounts Accounts
X 360 X 360
= Payable = Payable
Cost of Goods Sold Cost of Goods Sold
40,135,763 X 360 691,725,531 X 360
= =
369,432,949 4,317,689,669
= 39 Days = 58 Days
Cash Conversion Cycle of Fu-Wang Industries Ltd. =859 + 58 – 39 = 878 days
Cash Conversion Cycle of RAK Ceramics (Bangladesh) Ltd. =232 + 48 – 58 = 222 days
50 | P a g e
Forecasting:
Sales Forecasting is the most important tool of financial forecasting, and it is an essential part of
financial planning. We can make sales forecast of 2020 for both the companies from the sales
growth of the company in 2019. If this forecast is incorrect and the market expands significantly
both companies will not be able to satisfy the market demand and consumers will buy other
competitor’s products. Again, if the projection is over optimistic then both the companies will
end up with excessive inventory and equipment, which will result in high cost of depreciation
and storage.
The sales growth of Fu-Wang Ceramic Industries Limited in 2019 is:
Sales Growth = (595,171,947 - 572,643,469) / 572,643,469 %
= 3.93 or 4 %
The sales growth of RAK Ceramics (Bangladesh) Limited in 2019 is:
Sales Growth = (6,463,857,312 – 6,331,083,301) / 6,331,083,301 %
= 2.09 or 2 %
From the above calculations we can make a sales forecast that Fu-Wang and RAK Ceramics will
gain 4% and 2% sales growth respectively in 2020. Assuming, sales and other related operating
cost of Fu-Wang Ceramics will increase by 4% and the company is currently operating at full
Capacity. Therefore Fu-Wang should expand their plants and equipment by 4%. For RAK
ceramics the forecast should be 2% in sales and related operations.
Projected Income Statement Fu-Wang Ceramics for the year 2020

2020 Forecast Initial Forecast
Particulars 2019
Basis 2020
Sales/Turnover (Net of SD & VAT) 595,171,949 1.04 618,978,827
Cost of Goods Sold (369,432,105) 1.04 (384,209,389)
Gross Profit 225,739,844 234,769,438
Administrative Expenses (28,397,694) 1.04 (29,533,602)

Provision for Gratuity (3,000,000) 1.04 (3,120,000)
Marketing and Selling Expenses (25,834,925) 1.04 (26,868,322)
Operating Income and Expenses (57,232,619) (59,521,924)
Profit from Operative Activities 168,507,225 175,247,514
Non-Operating Income 2,806,377 2,806,377

Interest Charges (54,901,308) (54,901,308)
Net Financial Income (52,094,931) (52,094,931)
51 | P a g e
Profit Before Contribution to Worker's Profit
116,412,294 123,152,583
Participation and Welfare Fund
Contribution to Worker's Profit Participation
(5,543,443) (5,543,443)
and Welfare Fund
Profit before Income TAX 110,868,851 117,609,140
Current TAX (30,089,097) (30,089,097)

Income TAX Expenses (30,089,097) (30,089,097)
Net Profit for the year after TAX 80,779,754 87,520,043
Earnings Per Share - EPS (Par value tk 10) 0.59 0.64
Total number of Share 136,914,837 136,914,837
Projected Income statement Fu-Wang Ceramics for the year 2020

Particulars 2019
Basis 2020
Assets
Current Assets
Cash and Cash Equivalents 10,364,072 1.04 10,778,635
Inventories 881,664,883 1.04 916,931,478
Trase and other Receivables 96,146,171 1.04 99,992,018
Advance, Deposits and Prepayments 163,244,543 1.04 169,774,325
Investment in FDR 8,612,086 1.04 8,956,569
Total Current Asset 1,160,031,755 1,206,433,025
Logn Term-Assets
Property, Plant and Equipment 1,309,658,009 1.04 1,362,044,329
Investment in Property 14,016,828 1.04 14,577,501
Capital Work in Process 23,750,525 1.04 24,700,546
Total Long-Term Assets 1,347,425,362 1,401,322,376
Total Assets 2,507,457,117 2,607,755,402
Liabilities and Shareholders' Equity
Current Liabilities
Short-Term Bank Loans and Others 542,858,034 1.04 564,572,355
Trade and Other Payables 40,135,763 1.04 41,741,194
Liabilities for Expanses 18,567,935 1.04 19,310,652
Provision for Income Tax 26,148,181 1.04 27,194,108
Total Current Liability 627,709,913 652,818,310
Long Term Liabilities
Long Term Loan Net off Current
276,622,966 276,622,966
Matuarity
Deffered Tax 83,591,202 83,591,202
52 | P a g e
Total Long Term Liabilitries 360,214,168 360,214,168
Total Liabilities 987,924,081 1,013,032,478
Shareholders' Equity
Share Capital 1,362,690,930 1,362,690,930
Share Premium 76,062,352 76,062,352
Retained Earnings 80,779,754 80,779,754
Total Shareholders' Common Equity 1,519,533,036 1,519,533,036
Total Liabilities and Shareholders'
2,507,457,117 2,532,565,514
Equity
Additional Funds Needed (AFN) 75,189,888
Projected Income statement RAK Ceramics for the year 2020

Particulars 2019
Basis 2020
Sales/Turnover (Net of SD & VAT) 6,463,857,312 1.02 6,593,134,458
Cost of Goods Sold (4,556,112,666) 1.02 (4,647,234,919)
Gross Profit 1,907,744,646 1,945,899,539
Other Income 46,204,060 1.02 47,128,141

Administrative Expenses (400,512,718) 1.02 (408,522,972)
Impairment Loss on Trade Receivable (5,624,637) 1.02 (5,737,130)
Marketing and Selling Expenses (455,996,281) 1.02 (465,116,207)
Operating Income and Expenses (815,929,576) (832,248,168)
Profit from Operative Activities 1,091,815,070 1,113,651,371
Financial Income 32,878,148 32,878,148

Interest Charges (27,323,676) (27,323,676)
Net Financial Income 5,554,472 5,554,472
Profit Before Contribution to Worker's Profit

1,097,369,542 1,119,205,843
Participation and Welfare Fund
Contribution to Worker's Profit Participation
(52,965,129) (52,965,129)
and Welfare Fund
Profit before Income TAX 1,044,404,413 1,066,240,714
Current TAX (296,420,303) (296,420,303)

Deferred TAX 6,041,346 6,041,346
Income TAX Expenses (290,378,957) (290,378,957)
Net Profit for the year after TAX 754,025,456 775,861,757
Earnings Per Share - EPS (Par value Tk 10) 1.76 1.81
Total number of Share 428,423,555 428,423,555
53 | P a g e
Projected Income statement RAK Ceramics for the year 2020

Particulars 2019
Basis 2020
Assets
Current Assets
Cash and Cash Equivalents 1,499,310,101 1.02 1,529,296,303
Inventories 2,785,630,242 1.02 2,841,342,847
Trase and other Receivables 859,960,257 1.02 877,159,462
Advance, Deposits and Prepayments 267,192,251 1.02 272,536,096
Advance Income TAX 3,434,063,275 1.02 3,502,744,541
Total Current Asset 8,846,156,126 9,023,079,249
Logn Term-Assets
Property, Plant and Equipment 3,002,292,895 1.02 3,062,338,753
Investment in Property 681,433,369 1.02 695,062,036
Right of Use Assets 45,836,335 1.02 46,753,062
Intengible Assets 6,495,047 1.02 6,624,948
Capital Work in Process 177,641,997 1.02 181,194,837
Total Long-Term Assets 3,913,699,643 3,991,973,636
Total Assets 12,759,855,769 13,015,052,884
Liabilities and Shareholders' Equity
Current Liabilities
Borrowing 89,232,918 1.02 91,017,576
Lease Liability 10,101,008 1.02 10,303,028
Trade and Other Payables 691,725,531 1.02 705,560,042
Accrued Expenses 558,665,634 1.02 569,838,947
Provision for Income Tax 3,834,252,155 1.02 3,910,937,198
Total Current Liability 5,183,977,246 5,287,656,791
Long Term Liabilities
Deffered Tax 191,893,149 194,893,149
Lease Liability 29,374,867 29,374,867
Total Long Term Liabilitries 221,268,016 224,268,016
Total Liabilities 5,405,245,262 5,511,924,807
Shareholders' Equity
Share Capital 4,279,687,010 4,279,687,010
Share Premium 1,473,647,979 1,473,647,979
Retained Earnings 1,601,275,518 1,601,275,518
Total Shareholders' Common Equity 7,354,610,507 7,354,610,507
Total Liabilities and Shareholders' Equity 12,759,855,769 12,866,535,314
Additional Funds Needed (AFN) 148,517,570
54 | P a g e
CHAPTER: 8
8.1 Conclusions:
The desirable qualities of the tableware – beauty of design, excellence in making and affordable
price – are rooted with the ceramics industries mission and commitment. The tableware is made
to the most exact standards to please the most apprehensive customers. The quality control
supervisors at every stage of production ensure that all items meet the most critical standards in
the world. Giving dignity and distinction to the users, the ceramics industries tableware becomes
centerpiece in any stylish home. It blends together the outstanding technology and timeless
craftsmanship to catapult Bangladesh into the new millennium.
In our country tableware ceramics industry is developing day by day. Already many companies
are in the market and are serving consumers delivering quality products. To compete smartly in
the domestic and international markets companies need to set appropriate financial and
marketing strategies. For setting correct strategies companies need to find out appropriate
financial position. For setting right positioning strategies companies need to know the needs and
requirements of the customers. International players under ceramic industry of Bangladesh are
doing above described activities more or less correctly. If individual organizations can set
appropriate marketing and financial strategies that will be beneficial for the organizations as well
as for the industry. Lots of changes have taken place in tableware ceramics industry in last few
years. Once upon a time consumer were not concerned about shape, design and other factors. But
now-a-days these things are considered. In modern world consumers’ demand is changing day by
day and they switch companies frequently. So, to retain the consumers is important and it will be
possible when companies will be aware about perception of customers and will be able to take
position according to that perception. By creating competitive advantages companies have to do
something special for customers and by this way company can increase their relative market
share as well as achieve top position also.
55 | P a g e

1st Mid Term Paper (Group-6)

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

1st Mid Term Paper (Group-6)

Uploaded by

Copyright:

Available Formats

Financial Analysis of Fu-Wang

Ceramic industries ltd. & RAK

Course code: FIN 501

Submitted tO: Prepared By:

Submission Date: 21st November, 2020

Subject: Regarding submission of FIN 501Term Paper on Financial Analysis of Fu-Wang

Md. Majharul Islam 2020-1-91-017

Table no. Table name Page no.

01 Comparative Balance Sheet 14

Objectives of the Term Paper

Contact Information of Fu-Wang Ceramic Industry Limited

RAK Ceramic (Bangladesh) Limited incorporated in Bangladesh on 26 November, 1998.

HISTORY OF THE COMPANY:

RAK Ceramic Wall Tiles:

RAK Ceramic Floor Tiles:

RAK Ceramic’s Wooden Model Tiles:

RAK Ceramic Bathroom Set:

RAK Ceramic random products:

Contact Information of RAK Ceramic (Bangladesh) Limited:

Dhaka Office :RAK Tower (7thFloor& 9th Floor),

Comparative Balance Sheet

L i ab i l i t i es and Sharehol d ers' Eq ui t y

FU-WANG Ceramic Industries Ltd. RAK Ceramics (Bangladesh) Ltd.

Other Income 46,204,060 65,663,417

Non-Operating Income 2,806,377 2,868,609

Profit Before Contribution to Worker's Profit Participation

Current TAX (30,089,097) (28,735,952) (296,420,303) (316,179,434)

Total number of Share 136,914,837 135,612,021 428,423,555 428,185,185

FU-WANG Ceramic Industries Ltd. RAK Ceramics (Bangladesh) Ltd.

Cash Flow from Investing Activities

Cash Flow from Financial Activities

FU-WANG Ceramic Industries Ltd.

RAK Ceramics (Bangladesh) Ltd.

Bar Chart of Comparative Assets

FU-WANG Ceramic Industries Ltd. RAK Ceramics (Bangladesh) Ltd.

FU-WANG Ceramic Industries Ltd. RAK Ceramics (Bangladesh) Ltd.

Bar Chart of Comparative Owners' Equity

2,000 1,520 1,439

FU-WANG Ceramic Industries Ltd. RAK Ceramics (Bangladesh) Ltd.

1,000 595 573

FU-WANG Ceramic Industries Ltd. RAK Ceramics (Bangladesh) Ltd.

Bar Chart of Comparative Net Profit

FU-WANG Ceramic Industries Ltd. RAK Ceramics (Bangladesh) Ltd.

Cur r ent R atio s

= 1.85 Times = 1.99 Times

Quick o r Acid Tes t R atio s

1,160,031,755 - 881,664,883 1,042,081,600 - 753,810,051

= 0.44 Times 0.55 Times

As s et M anag em ent R atio s

Inventory Cost of Goods Sold Inventory Cost of Goods Sold

= 0.42 Times = 0.49 Times

Days Sales Accounts Receivable Days Sales Accounts Receivable

= 58.16 Days = 79.31 Days

Fixed Asset Sales Fixed Asset Sales

= 0.44 Times = 0.52 Times

= 0.24 Times = 0.27 Times

Debt M anagement R atio s

Debt to Total Total Liabilities Debt to Total Total Liabilities

= 39.40 Percent = 32.81 Percent

= 2.02 Times = 4.15 Times

Net Profit Margin - Net Profit Net Profit Net Profit

= 13.57 Percent = 14.68 Percent