North South University

School Of Business
Summer 2013

Course Name Financial Accounting

Course code - ACT 201
Section 23
Submitted to - Sayeba Kamal Athoi (SBK)
Submission Date: 1st September, 2013
Submitted by: Group 2

Name

ID

Riad Ahmed

1310266030

Refat Bin Wadud

1310693630

Tanzirul Islam

1310784630

Md. Naim
Akhi Shikder

1310427630
1311200630

April 12, 2013

Sayeba Kamal Athoi
Lecturer
School of Business
North South University
Subject: Submission of Financial Accounting Project
Dear Madam,
We are submitting herewith our project entitled Financial statement analysis of RAK Ceramics
Ltd. and SHINEPUKUR Ceramics Ltd. as per your instruction to fulfill the Financial
Accounting course requirement.
The main purpose of this report is to study and compare the analysis of financial statements and
ratios of the two companies. We decided to conduct the report on RAK Ceramics and
SHINEPUKUR Ceramics keeping in mind their contribution in the economy and importance.
We can assure you the authenticity of this report. We sincerely hope that this report will merit
your approval. We are grateful to you for giving us the opportunity to study the analysis of annual
reports of both companies and to compile this report.
Respectfully yours,
GROUP 2

Introduction
We have decided to select ceramics industry of Bangladesh for our project. We will be comparing
and analyzing the performance of the two major ceramic companies. RAK Ceramics Ltd and
SHINEPUKUR Ceramics Ltd. We decided to select this industry 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.

Background of the companies

RAK Ceramics: RAK Ceramics (Bangladesh) Ltd incorporated in Bangladesh on 26 November,
1998 as a private company limited by a share under the company act 1994. It is engaged in
manufacturing and marketing of ceramic tiles, bathroom sets and all types of sanitary ware. It has
started its commercial production 0n 12 November, 20000. RAK Ceramics Ltd, 90% held by
RAK Ceramics PSC and its nominees, a company incorporated under the laws of UAE and
remaining 10% owned by local investor Mr. S.A.K. Ekramuzzaman. With an annual turnover of
over BDT 3248 million, within the short span of 11 years RAK has firmly established itself as one
of the leading manufacturer of high quality ceramic wall floor tiles, and sanitary wares products
in Bangladesh. The core business of RAK Ceramics Ltd is to manufacture and sell of tiles and
sanitary wares. The company has over 1000 models active in the ceramic and porcelain tile
business and regularly adds several new designs to the product portfolio. The company
manufactures tiles in a very wide range of tiles in the size from 20 cm x 30 cm up to 60 cm x 60
cm in Bangladesh location. The company has over 40 models an exclusive range of sanitary ware
to offer with a very wide choice. Most of production is consumed in local market and balance gets
exported to UAE. RAK ceramics Bangladesh Ltd is an ISO certified organization.
SHINEPUKUR Ceramics: SCL is a member of BEXIMCO group which is the largest private
business conglomerate in Bangladesh. SHINEPUKUR ceramics has been registered in
Bangladesh in 1997 and plants were commissioned in 1998. Total investment in the company is
US$ 35 million. The company has already made additional investment of US$ 10 million to
expand its Bone china unit. SHINEPUKUR has well control laboratory facilities, and has its
disposal, own captive gas-based power generation capability, own water supply, and medical and
sanitary facilities. The company was certified ISO in Aug 2001. SCL produces variety and a wide
range of Bone china and porcelain tableware for retail as well as hotel, and Ivory china for retail
house ware. Complementing its superb range of bone china, SHINEPUKUR also offers porcelain,
ivory china, high alumina table ware for all different market segments and they produce dinner to
3

tea plates, soup tureens to soup spoons, retail tabletop to industrial. They export their products in
Australia, Argentina, Canada, Denmark, France, India and many other countries.

Competitors
Some of the major competitors of these two companies are Peoples Ceramics Industry Ltd, FARR
Ceramics, Mirpur Ceramics Works Ltd, Fu-Wang Ceramic Industry Ltd.

SHINE PUKUR Ceramics Limited

Condensed Balance Sheet
Horizontal Analysis
Increase or Decrease in 2012

2011
Amount in
Taka

2012
Amount in
Taka

Assets
Non-Current Assets
Property, Plant & EquipmentCarrying Value
Investment in Shares
Capital Work In progress

4,493,055,46
1

4,384,003,40
2

225,870,721

121,705,206

Total Non-Current Assets

817,891,743

817,891,743

Current Assets
Inventories
Account& Other Receivables
Advances, Deposits& Prepayments
Cash and cash equivalents

5,536,817,9
25

5,323,600,3
51

891,674,750

845,059,407

586,933,889

853,413,145

112,190,532

81,930,381

25,432,780

16,009,871

Difference
in Taka

109,052,05
9
104,165,51
5
0
213,217,5
74

-46,615,34
3

Percenta
ge

-2.4%
-46.1%
0

-3.9%

-5.2%
45.4%
-27%
-37.1%

266,479,25
6
-30,260,15
1
-9,422,909

Total Current assets

1,617,231,9
51

1,796,412,8
04

Total Assets
7,154,049,8
76

11.1%
179,180,8
53

-0.5%

7,120,013,1
55

Equity and Liabilities

Shareholders Equity
Issued Shared Capital
Revaluation surplus
Retained Earnings

-34,036,7
21

1,111,274,53
0
2,953,318,42
0

1,277,965,70
0
2,907,734,98
9

435,167,473

358,761,360

166,691,17
0

15%
-1.5%
-17.6%

-45,583,43
1
-76,406,11
3

Total Shareholders Equity

Non-Current Liabilities
Long term loan-Net Off Current
Maturity(secured)
Long Term Loan (Unsecured)
Deferred Tax Liability

4,499,760,4
23

4,544,462,0
49

1%
44,701,62
6
-25.3%

396,579,272

598,837,779
9,965,449

296,189,631

100,389,64
1

498,837,779
8,456,579

100,000,00

-16.7%
15.1%

SHINEPUKUR Ceramics Limited

Comprehensive Income Statement
Horizontal Analysis
Increase or Decrease in 2012

Sales Revenue
Cost of goods sold
Gross Profit
Operating expenses:
Administrative expenses
Selling and distribution expenses
Exchange loss

2011
Amount in
Taka

2012
Amount in
Taka

1,901,129,1
92
(1,248,024,9
42)

1,942,350,7
52
(1,268,312,9
98)

653,104,25
0

674,037,75
4

(61,433,037)

(54,107,127)

(49,547,627)

(51,765,185)
----

Difference
in Taka

Percentage

41,221,560
(20,288,056)

3.8%
1.6%

20,933,504

3.2%

(-7,325,910)
(2,217,558)
-10,120,204

-11.9%
4.5%
-1%

(-15,228,556)
36,162,060
(19,334,394)
(58,020,290)

-12.6%
6.8%

-41,823,364

-18.5%

(-1,991,589)

-18.5%

-39,831,775
(38,651,270)

-18.5%
18%

(10,120,204)
In total
Profit from operations
Gain/Loss on sale share
Finance cost
Profit before contribution to WPFF
Contribution to workers Profit
participation/welfare funds
Net Profit before Tax
Income Tax expense
Net Profit after Tax for the year
Other comprehensive Income:
Revaluation surplus on Property,
Plant & Equipments
Fair value loss on investment in
Shares

(121,100,86
8)

(105,872,31
2)

532,003,38
2

568,165,44
2

315,370

(19,649,764)

(306,604,93
8)

(364,625,22
8)

225,713,81
4

183,890,45
0

(10,748,277)

(8,756,688)

214,965,53
7

175,133,76
2

18.9%

(46,197,435)

(84,848,705)

168,768,10
2

90,285,057

-78,483,045

-1,612,405,062

-46.5%

-1%

---(32,211,836)
1,612,405,0
62

241%

(45,583,431)

(13,371,595)
Total Comprehensive Income
for the year

-1,723,099,943
1,767,801,
569

-97.5%

44,701,626

Horizontal analysis also known as Trend analysis is a financial statement analysis technique
that shows changes in the amounts of corresponding financial statement items over a period of
time. It is a useful tool to evaluate the trend situations. Its purpose is to determine the increase or
decrease that has taken place.
SHINEPUKUR Ceramics: The comparative balance sheet of SHINEPUKUR states that a
number of significant changes have occurred from 2011 to 1012.

Total non-current assets decreased by 3.9% and non-current liabilities increased by 20.1%
which suggests that the company isnt expanding its business rather its been selling off its
assets to pay for the non-current liabilities.
SHNINEPUKURs current assets increased by 11.1% and current liabilities increased by
7.5%. So this company is more than able to pay for its day to day operations expenses
8

Increase in issued share capital by 15% indicates that the company issuing 15% more
share than before probably to pay-off its fixed debts or to finance its operations.
Its retain earnings decreased by 17.6% which suggests that the companys been earning
less.

In short, SHINEPUKUR isnt doing very well. Its been reducing its business and not getting
enough profit.
The comparative income statement of SHINEPUKUR shows some changes like:
Sales revenue increased by 3.8% and COGS increased by only 1.6%. It suggests that the
companys selling enough products and it also means that their operational activities are
good
Operating expense decreased by 12.6%.
Although gross profit increased by 3.2% net income decreased by 97.5% in 2012. It
indicates that 2012 was not a good time for SHINEPUKUR.
In short, SHINEPUKUR Ceramics doesnt appear to be favorable.

RAK Ceramics Limited

Condensed Balance sheet
Horizontal Analysis
Increase or decrease in 2012

Assets
Non-Current Assets
Property, Plant & Equipment
Equity Accounted Investees
Intangible Assets
Capital Work in Progress
Investment in Shares of Listed
companies
Loan to Associates
Preliminary & Pre-operating
Expenses
Total Non-Current Assets
Current Assets
Inventories
Trade & Other Receivables
Loan Associates
Advances, Deposits and Prepayments
Advance Income Tax
Cash & Cash equivalents

2011
Amount in
Taka

2012
Amount in
Taka

2,725,576,10
2

3,000,994,83
4

82,955,354

99,935,330

113,928,723

112,670,334

36,578,205

30,955,703

3,176,995
---

2,189,065

10,926,364
2,973,141,7
43

1,658,062,56
9

95,204,185
--3,341,949,4
51

1,777,888,71
8
621,590,397

526,123,351
----194,219,227
948,002,438
1,442,035,67
9
Total Current assets
Total Assets

4,768,443,2
64

4,795,815
217,599,738
1,303,890,75
5

Difference
in Taka

275,418,732
16,979,976
-1,258,389
-5,622,502
-987,930
95,204,185
10,926,364

Percentag
e

10.1%
20.5%
-1.1%
-15.4%
-31.2%
-100%

12.4%
368,807,
708

119,826,149
95,467,046
4,795,815
23,380,511
355,888,317

7.2%
18.1%
---12.3%
37.5%
-31.5%

-453,736,774

988,298,905
4,913,984,3
28

3.1%
145,541,
064

6.6%

8,255,933,7
79
Equity and Liabilities
Equity
Share Capital
Share Premium
Retained Earnings
Non-Controlling Interests

Total Equity
Non-Current Liabilities
Borrowings

7,741,585,0
07

514,348,
772

2,530,808,50
0
1,473,647,97
9
1,318,178,60
8

2,783,889,35
0
1,473,647,97
9
1,293,599,64
0

173,866,834
5,496,501,9
21

108,824,662
6,659,961,6
31

253,080,850
0
-24,578,968

10%
0
-1.9%
-37.6%

-65,421,172

1,163,45
9,710

21.2%

-43.6%

10

RAK Ceramics Limited

Comprehensive Income Statement
Horizontal Analysis
Increase or Decrease in 2012

2011
Amount in
Taka
Sales
Cost of goods sold
Gross Profit
Other Income
Administrative expenses
Marketing and Selling expenses

Profit from Operating

activities
Finance income
Finance costs
Net finance income
Share of Profit/loss of equity
accounted investees
Profit before contribution to
workers
Profit Participation fund
Contribution to workers Profit
Participation fund
Profit before Income Tax
Income Tax expense:
Current tax
Deferred tax
Profit for the year

Profit attributable to:

Equity holders of the company
Non-controlling interests
Profit after Tax for the year

4,580,008,2
09
(2,693,596,2
90)
1,886,411,
919
6,076,938
(255,823,05
5)
(641,800,85
7)
(891,546,97
4)
994,864,94
5
147,136,340
(61,462,408)
85,673,732
(56,644,648)
1,023,894,
029

2012
Amount in
Taka
4,908,171,27
9
(2,979,160,0
88)

Difference
in Taka

Percentage

328,163,070
(285,563,798)

7.2%
10.6%

1,929,011,1
91
9,570,670
(297,250,162
)
(730,822,714
)

42,599,272
3,494,732
(41,427,107)
(89,021,857)

2.3%
57.5%
16.2%
13.9%

(1,018,502,2
06)
910,508,98
5
102,831,687
(25,867,434)
76,964,253

(126,955,232)
-84,356,960
-44,304,653
(-35,594,974)
-8,709,479

14.2%
-8.5%
-30.1%
-57.9%
10.2%

(16,375,376)

28.9%

-109,440,815

-10.7%

(73,020,024)
914,453,21
4

(-5,692,736)
(63,193,326)
960,700,70
3

(57,500,590)
856,952,62
4

(323,570,13
6)
4,606,626
(318,963,51
0)
641,737,19
3

(370,221,049
)
13,479,410
(356,741,639
)
500,210,98
5

756,952,645
(115,215,45
2)

608,123,157
(107,912,172
)

-9%

-103,748,079

-10.8%

(46,650,913)
8,872,784
(37,778,129)

1.4%
192.6%
11.8%

-141,526,208

-22.1%

-148,829,488
(-7,303,280)

-19.7%
-6.3%

11

641,737,19
3

500,210,98
5

-141,526,208

-22.1%

RAK Ceramics: The important changes in the comparative balance sheet from 2011 to 2012 are
as follows:
Total non-current assets have increased by 12.4% which means that the company is
buying more fixed assets probably for expanding its business.
Non-current liabilities decreased by 16.6% which suggests improvement.
Its current asset increased by 3.2% whereas current liabilities increased 18.2%. It indicates
that RAK isnt able to pay off its current debts even if its doing well.
Its retained earnings decreased by only 1.9%.
In short, RAK ceramics is doing better. Its been expanding its business which means its getting
enough profit from business.

The changes in income statement in 2011 to 2012 indicates that :

Sales grew by 7.2% and COGS grew by 10.6% which means that RAK isnt selling as
much as it should probably because of its poor operating activities.
Operating expenses grew by 14%.
Gross profit increased by 2.3% and net income decreased by 22.1%

The changes above suggests that although gross profit increased, the net income decreased by
22.1%..

12

SHINE PUKUR Ceramics Limited

Condensed Balance Sheet
Vertical analysis

13

Assets
Non-Current Assets
Property, Plant & EquipmentCarrying Value
Investment in Shares
Capital Work In progress
Total Non-Current Assets

Current Assets
Inventories
Account& Other Receivables
Advances, Deposits& Prepayments
Cash and cash equivalents

2011
Amount in
Taka

2012
Amount in
Taka

Percentag
e
2011

Percentag
e
2012

4,493,055,46
1

4,384,003,4
02

62.8%
3.2%
11.4%

61.6%
1.7%
11.5%

225,870,721

121,705,206

817,891,743
5,536,817,9
25

817,891,743
5,323,600,
351

77.4%

74.8%

12.5%
8.2%
1.6%
0.4%

11.9%
12%
1.2%
0.2%

22.6%

25.2%

100%

100%

15.5%
41.9%
6.1%

17.9%
40.8%
5%

62.9%

63.8%

5.5%

4.2%

8.4%
0.14%

7%
0.12%

891,674,750
845,059,407
586,933,889
853,413,145
112,190,532
81,930,381
25,432,780

Total Current assets

1,617,231,9
51

16,009,871
1,796,412,
804

Total Assets

Equity and Liabilities

Shareholders Equity
Issued Share Capital
Revaluation surplus
Retained Earnings

Total Shareholders Equity

Non-Current Liabilities
Long term loan-Net Off Current
Maturity(secured)
Long Term Loan (Unsecured)
Deferred Tax Liability

7,154,049,8
76

7,120,013,
155

1,111,274,53
0
2,953,318,42
0

1,277,965,7
00
2,907,734,9
89

435,167,473

358,761,360

4,499,760,4
23

4,544,462,
049

396,579,272
296,189,631
598,837,779
9,965,449
498,837,779
8,456,579

Total Non-Current Liabilities

Current Liabilities
Short Term Loan from Banks
(secured)
Long Term Loan-Current
Maturity(Secured)
Creditor, Accruals & Other
Payables

1,005,382,5
00

1,147,673,70
8

14.1%

11.3%

803,483,98
9

1,183,795,7
49

91,818,692
143,242,382

16%
1.3%

16.6%
2.1%

5.7%

6.3%

14

SHINEPUKUR Ceramics Limited

Comprehensive Income Statement
Vertical Analysis

Sales Revenue
Cost of goods sold
Gross Profit
Operating expenses:
Administrative expenses
Selling and distribution expenses
Exchange loss

2011
Amount in
Taka

2012
Amount in
Taka

1,901,129,19
2
(1,248,024,9
42)

1,942,350,75
2
(1,268,312,9
98)

653,104,25
0

Percentage
2011

Percentage
2012

100%
65.6%

100%
65.3%

34.4%

34.7%

3.2%
2.6%
0.5%

2.8%
2.7%
0%

6.4%
28%
0.02%
16.1%

5.5%
29.3%
1%
18.8%

11.9%

9.5%

0.6%

0.5%

11.3%
2.4%

9%
4.4%

674,037,75
4

(61,433,037)

(54,107,127)

(49,547,627)

(51,765,185)
----

(10,120,204)
In total
Profit from operations
Gain/Loss on sale share
Finance cost
Profit before contribution to WPFF
Contribution to workers Profit
participation/welfare funds
Net Profit before Tax
Income Tax expense
Net Profit after Tax for the
year
Other comprehensive Income:
Revaluation surplus on Property,
Plant & Equipments
Fair value loss on investment in
Shares
Total Comprehensive Income
for the year

(121,100,868
)

(105,872,312
)

532,003,38
2

568,165,44
2

315,370

(19,649,764)

(306,604,938
)

(364,625,228
)

225,713,81
4

183,890,45
0
8,756,688

(10,748,277)
214,965,53
7

175,133,76
2

(46,197,435)

(84,848,705)

15

168,768,10
2

8.9%

4.6%

84.8%

0%

0.7%

2.3%

93%

2.3%

90,285,057

---1,612,405,06
2

(45,583,431)

(13,371,595)
1,767,801,5
69

44,701,626

Vertical Analysis: Vertical analysis is the proportional analysis of a financial statement, where
each line item on a financial statement is listed as a percentage of another item. Typically, this
means that every line item on an income statement is stated as a percentage of gross sales, while
every line item on a balance sheet is stated as a percentage of total assets.
SHINEPUKUR Ceramics: In the comparative balance sheet , we can see that:

Current asset increased from 22.6% to 25.2% of total assets.

Fixed assets decreased from77.4% to 74.8% of total assets.
Issued share capital increased from 15.5% to 17.9%.
Retained earnings decreased from 6.1% to 5%

16

Like mentioned before, SHINEPUKUR isnt expanding its business. Its paying for its liabilities
and financing its operation by issuing more bonds and selling off its fixed assets. Retained
earnings decreased means they arent doing well enough.

In the comparative income statement, we can see that,

SHINEPUKURs cost of goods sold decreased by 0.3%(65.6-65.3).

Its operating expenses is down by 0.9%(6.4-5.5).
Revaluation surplus on plant and assets of 1,612,405,062 which is 84.8% of sales

This emphasizes on the assumption that, SHINEPUKURs net income went down from 93% to
2.3% because it didnt have a huge revaluation surplus on plant and assets like it had in 2011.

RAK Ceramics Limited

Condensed Balance sheet
Vertical Analysis

17

Assets
Non-Current Assets
Property, Plant & Equipment
Equity Accounted Investees
Intangible Assets
Capital Work in Progress
Investment in Shares of Listed
companies
Loan to Associates
Preliminary & Pre-operating
Expenses

Total Non-Current Assets

Current Assets
Inventories
Trade & Other Receivables
Loan Associates
Advances, Deposits and Prepayments
Advance Income Tax
Cash & Cash equivalents

2011
Amount in
Taka

2012
Amount in
Taka

2,725,576,10
2

3,000,994,83
4

82,955,354

99,935,330

113,928,723

112,670,334

36,578,205

30,955,703

3,176,995
---

2,189,065

10,926,364
2,973,141,7
43

1,658,062,56
9
526,123,351
-----

948,002,438
1,442,035,67
9
Total Current assets

Equity and Liabilities

Equity
Share Capital
Share Premium
Retained Earnings
Non-Controlling Interests

Total Equity
Non-Current Liabilities
Borrowings

1,777,888,71
8
621,590,397

194,219,227

Total Assets

95,204,185
--3,341,949,4
51

4,768,443,2
64

Percentag
e
2011

Percentag
e
2012

35.2%
1.1%
1.5%
0.5%
0.04%
0%
0.1%

36.3%
1.2%
1.4%
0.4%
0.03%
1.2%
0%

38.5%

40.5%

21.4%
6.8%
0%
2.5%
12.2%
18.6%

21.5%
7.5%
0.06%
2.6%
15.8%
12%

61.6%

59.5%

100%

100%

32.7%
19%
17%
2.2%

33.7%
17.8%
15.7%
1.3%

71%

80.7%

0.4%

0.2%

4,795,815
217,599,738
1,303,890,75
5
988,298,905
4,913,984,3
28
8,255,933,7
79

7,741,585,0
07

2,530,808,50
0
1,473,647,97
9
1,318,178,60
8

2,783,889,35
0
1,473,647,97
9
1,293,599,64
0

173,866,834
5,496,501,9
21

108,824,662
6,659,961,6
31

18

RAK Ceramics Limited

Comprehensive Income Statement
Vertical Analysis

2011
Amount in
Taka
Sales
Cost of goods sold
Gross Profit
Other Income
Administrative expenses
Marketing and Selling expenses

Profit from Operating

activities
Finance income
Finance costs
Net finance income
Share of Profit/loss of equity
accounted investees
Profit before contribution to
workers
Profit Participation fund
Contribution to workers Profit
Participation fund

Profit before Income Tax

Income Tax expense:
Current tax
Deferred tax
Profit for the year
Profit attributable to:
Equity holders of the company
Non-controlling interests

4,580,008,2
09
(2,693,596,2
90)
1,886,411,
919
6,076,938
(255,823,05
5)
(641,800,85
7)
(891,546,97
4)
994,864,94
5
147,136,340
(61,462,408)
85,673,732

2012
Amount in
Taka
4,908,171,27
9
(2,979,160,0
88)

100%
60.7%

1,929,011,1
91
9,570,670
(297,250,162
)
(730,822,714
)

41.2%
0.1%
5.6%
14%

39.3%
0.2%
6.1%
14.9%

(1,018,502,2
06)
910,508,98
5
102,831,687
(25,867,434)
76,964,253

19.5%
21.7%
3.2%
1.3%
1.9%

20.8%
18.6%
2.1%
0.5%
1.6%

1.2%

1.5%

22.4%

18.6%

1.4%

1.2%

21%

17.5%

7.1%
0.1%
7%

7.5%
0.3%
7.3%

14%

10.2%

16.5%
2.5%

12.4%
2.2%

(56,644,648)

(73,020,024)

1,023,894,
029

914,453,21
4

(63,193,326)
960,700,70
3

Percentage
2012

Percentage
2011
100%
58.8%

(57,500,590)
856,952,62
4

(323,570,13
6)
4,606,626
(318,963,51
0)
641,737,19
3

(370,221,049
)
13,479,410
(356,741,639
)
500,210,98
5

756,952,645
(115,215,45
2)

608,123,157
(107,912,172
)

19

Profit after Tax for the year

641,737,19
3

500,210,98
5

14%

10.2%

RAK Ceramics: The comparative balance sheet of RAK ceramics shows:

Fixed assets increased by 2%(40.5-38.5).

Current decreased from 61.6% to 59.5%.
Non-current liabilities decreased by 5%(2.2-1.7).
Share capital increased from 32.7% to 33.7% only.

Above changes suggest that the company is doing well enough to expand its business and thats
why its buying more fixed assets. Decrease in non-current liabilities suggests that its been
paying off its long term debts. Rise in share capital by 1% only indicates that RAK Ceramics is
earning enough profit to run its business thats why they didnt need to issue that much share.

The changes in the income statements shows that:

COGS has increased from 57.8% to 58.7% .

Operating expenses increased by 1.3%(20.8-19.5)
Net income decreased by 1.8%(14-10.2)

The changes above indicates that RAKs COGS and operating expenses both have risen and thats
why its net income decreased.

20

Rati
os

SHINEPUKUR
Ceramics
2011
2012

Analysis

Current Ratio

0.98:1

1.01:1

For 1 taka worth of current liabilities SHINEPUKUR has 1.01 taka

worth of current assets. This ratio has increased.

Acid-test(Quick) Ratio

0.37:1

0.49:1

Quick ratio has decreased.

Receivable turn-over Ratio

3.57 Times

2.70 Times

Profit Margin Ratio

8.82%

4.64%

Asset Turn over Ratio

0.31Times

0.27Times

For investing 1 taka SHINEPUKUR is generating 0.27 taka worth

of revenue. The company isnt using it assets efficiently.

Inventory Turn-over Ratio

1.4 Times

1.5 Times

SHINEPUKUR Ceramics sells its Inventory once in ever 243 days

Return on Asset(ROA)

2.75%

1.27%

1.27 taka is earned on every 100 taka assets.

Return on Equity(ROE)

4.67%

2.00%

A net income of 2.0 taka is earned for every 100 taka invested by
the owners.

Debt to Total Ratio

30%

40%

40% of the companys assets are provided by creditor.

Earnings per Share(EPS)

1.32

0.71

SHINEPUKUR earned 0.71 taka per share.

The Business collected its receivables 2.70 times in 365 days

which means once in every 135 days. This amount reduced in
2012.
SHINE PUKUR earns profit of 4.6 taka in every 100 taka. Its twice
as low as 2011.

21

Rati
os

RAK
Ceramics
2011
2012

Analysis

Current Ratio

2.30:1

2:1

Acid-test(Quick) Ratio

0.95:1

0.66:1

Receivable turn-over Ratio

10.73Times

7.98Times

Profit Margin Ratio

14.01%

10.19%

Asset Turn-over Ratio

0.62Times

0.61Times

For investing 1 taka RAK is generating 0.61 taka worth of revenue.

The company is using its assets in the same way as before.

Inventory Turn-Over ratio

1.71Times

1.73Times

SHINEPUKUR Ceramics sells its inventory once in every 210

days.

Return on Asset(ROA)

For 1 taka worth of current liabilities SHINEPUKUR has 2 taka

worth of current assets. Although it has decreased, it is still an ideal
ratio for the company.
Quick ratio has decreased.

The Business collected its receivables 7.98 times in 365 days

which means once in every 45 days. So the company efficiency in
collecting receivable decreased but its still in a good position.
RAK earns profit of 10.19 taka in every 100 taka. It decreased by
3.8%.

8.68%

6.25%

6.25 taka is earned on every 100 taka assets

Return on Equity(ROE)

12.33%

8.23%

A net income of 8.23 taka is earned for every 100 taka invested by
the owners.

Debt to Total Ratio

29%

31 %

31% of the companys assets are provided by creditor

22

Earnings per Share(EPS)

2.72

2.18

RAK earned 2.18 taka per share.

Comments:
Current Ratio: For RAK ceramic, in 2012 Ratio of 2:1 means that for every TK of current
liability RAK has TK 2 current assets. RAK current Ratio has decreased in the current year than
previous year. For SHINEPUKUR ceramic, In 2012 Ratio of 1.01:1 means that for every TK of
current liability SHINEPUKUR ceramic has TK 1.01 current assets. SHINEPUKUR current Ratio
has increased in the current year than previous year.
Profitability Ratio: As per profit margin ratio shows that SHINEPUKUR ceramics profit margin
is more than 2 times greater than RAK ceramics profit margin.
Asset Turnover Ratio: Asset Turnover Ratio shows that RAK ceramics assets turnover Ratio is
more than 2 times greater than SHINEPUKUR ceramics.
Return on Asset (ROA) Ratio: In RAK ceramics, return on asset is about 4 times greater than
SHINEPUKUR ceramics, so RAK ceramics generates more profits from its asset which is good
for the company.
Return on Equity (ROE) Ratio: ROE position is very good for RAK ceramics than
SHINEPUKUR ceramics so it generates higher return for the shareholders.
Earnings per Share (EPS) Ratio: In 2012 RAK ceramics EPS is 3 times more than in 2011 and
SHINEPUKUR ceramics EPS in 2012 is less than EPS in 2011 here RAK ceramics EPS is greater
than SHINEPUKUR ceramics.
23

Now, judging by the ratio analysis of these two companies, it is clear that both companies have
suffered loss in 2012. But RAK Ceramics is still profitable and much more better than
SHINEPUKUR Ceramics because in 2012:
RAK Ceramics current ratio is 2:1whereas SHINEPUKURs is 1.01:1.
RAKs profit margin is almost 3times bigger than that of SHINEPURS
Return on asset of RAK Ceramics is 6.25% but SHINEPUKURs return on asset is only 1.27%.
Creditors provide money 31% of RAKs assets whereas creditors provide money for 40% of
SHINEPUKURs assets.
Lastly, RAK earns 2.18 taka in each share, but SHINEPUKUR earns only 0.71 taka per every
share.
The points above make it obvious that RAK Ceramics is doing much more better than
SHINEPUKUR. So, its clear that investing in RAK Ceramics is a comparatively safe, profitable,
and smart choice.

Appendix 01:
RAK Ceramics Ltd.
Ratio

2012

2011

Current Ratio

4913984328
2456242485
= 2:1

4768443264
2077509374
= 2.30:1

Acid-Test(Quick) Ratio

988298905+621590397
2456242485
= 0.66

1442035679+526123351
2077509374
= 0.95

Receivable Turnover Ratio

4580008209
(621590397+526123351)/2
= 7.98 Times

4908171279
(526123351+388310742)/2
=10.73 Times

Profit Margin Ratio

500210985*100
4908171279
= 10.19%

641737193*100
4580008209
= 14.01%
24

Asset Turnover Ratio

4908171279
(8255933779+7741585007)/2
= 0.61 Times

4580008209
(7741585007+7041094354)/2
= 0.62 Times

Inventory Turn-Over ratio

2979160088
(1658062569+1777888718)/2
= 1.73 Times

2,693,596,290

Debt to Total Ratio

139,729,663+2,456,242,495

(1487724337+1658062569)/2
= 1.71 Times
167,573,712+2,077,509,374
7,741,585,007

8255933779
= 0.31 Times

= 0.29 Times

Return on Asset(ROA)

500210985*100
(8255933779+7741585007)/2
= 6.25%

641737193*100
(7741585007+7041094354)/2
=8.68%

Return on Equity(ROE)

500210985*100
(5496501921+6659961631)/2
= 8.23%

641737193*100
(5496501921+4910792692)/2
=12.33%

Earnings Per Share(EPS)

2.18

2.72

Appendix 02:
SHINEPUKUR Ceramics Ltd.
Ratio

2012

2011

Current Ratio

1796412804
1772067117
= 1.01:1

1617231951
1648906953
= 0.98:1

Acid-Test(Quick) Ratio

16009871+853413145
1772067117
= 0.49:1

25431780+586933889
1648906953
= 0.37:1

Receivable Turnover Ratio

1942350752
(853413145+856933889)/2
= 2.70 Times

1901129192
(586933889+477473540)/2
=3.75 Times
25

Profit Margin Ratio

90285057*100
1942350750
= 4.64%

168768102*100
1901129192
= 8.82%

Asset Turnover Ratio

1942350752
(7120013155+7154049876)/2
= 0.27 Times

1901129192
(7154049876+5125726997)/2
= 0.31 Times

1,268,312,998

1,248,024,942
(891,674,750+845,195,056)/

Inventory Turn-over Ratio

Debt to Total Ratio

(845059407+891,674,750)/2
= 1.5 Times

(803483989+1772067117)
7120013155
= 0.4Times

2
=1.4 Times
(1,005,382,500+
1,648,906,953)
7,154,049,876

= .3 Times

Return on Asset(ROA)

90285057*100
(7120013155+7154049876)/2
= 1.27%

168768102*100
(7154049876+5125726997)/2
=2.75%

Return on Equity(ROE)

90285057*100
(4544462049+4499760423)/2
= 2.00%

168768102*100
(4499760423+2731958854)/2
=4.67%

Earnings Per Share(EPS)

0.71

1.32

All information regarding the two competitor companies has been obtained from
their respective sites.
The annual reports have been attached for your convenience.
The sites and persons from which information has been used are listed below.
http://www.fuwanggroup.com/financial.html
http://www.amclpran.com/investor.php

26