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We gladly present you our report titled Financial Ratio Analysis. Our report also
refers as an analytical report of accounting. We have made the report on the two listed
company annual report analysis as you had given us to analyse by help of your
suggestions. This report implies the companies activity, liquidity, solvency,
profitability, valuation financial ratios that helps to get a proper picture of the
companies. We have selected the company named- RAK Ceramics BD LTD & Berger
Paints Bangladesh Limited. We have discussed all of the ration in the analysis &
findings content. We have described the recommendation as much as possible.
We believe that the knowledge and experience we gathered during the report will
extremely helpful in our future professional and academic life. We will be grateful to
you if you accept the assignment.
Page No- 1
Table of Contents
No.
1.
2.
3.
4.
5.
7.
Contents
Introduction
(i) Background of the Report
(ii) Objectives of the Report
(iii) Limitations of the Report
(iv) Methodology
Page No.
3
4
5
6
Organisational Profile
(i) RAK CERAMICS (BD)
Limited
9
25
26
27
Page No- 2
(2)
Liquidity Ratio- measure the companys ability to meet its short term
obligations.
(3)
(4)
(5)
We have assigned a recommendation part for this report so that we can discuss
financial positive and negative impact of a company. We also have tried to focus
proper comment/note for each ratio.
Page No- 3
Page No- 4
Page No- 5
Methodology
Sources of Data: We collected data to prepare our repot from 2 types of data:(1)
Primary Data: Primary data are measurement observed and recorded as part
of an original study. There are two basic methods of obtaining primary dataQuestioning and Observation. We have collected primary data from the
companies (RAK Ceramics BD LTD & Berger Paints Bangladesh Limited)
own websites. The companied have published their 2014 & 2015 annual
repoerts who are thought to have the desired information. So we have get
proper and efficient information from its websites.
(2)
Page No- 6
Organizational Profile
RAK Ceramics BD LTD
RAK Ceramics (Bangladesh) Limited is the countrys largest and most respected tiles
and sanitary ware brand. The Company was incorporated in Bangladesh on 26
November, 1998 as a private limited company under the Companies Act, 1994 as a
UAE-Bangladesh joint venture project. It has started its commercial production on 12
November 2000. It has converted into public limited company on 10 June 2008 and
listed in the stock exchanges of Bangladesh on 13th June 2010. The Company has
anchored this position on the basis of its market-leading capacities, world-class
manufacturing technologies, high production utilization, optimized cost structures,
vibrant sales and distribution network and robust customer engagement programs.
Page No- 7
Products- Ceramic tiles, sanitary ware, taps and kitchen fittings, tableware, tile
adhesives, interior ancillary products.
Page No- 8
2015
2014
2896890000
2239844230
=1.293
3255270000
1835354727
=1.773
Revenue
Average Receivables
2015
6329964274
638387373
=9.916
2014
5508640000
580719781
=9.486
* Receivable turnover ratio of two years is almost average and well. The receivable
turnover ratio of 2015 has been improved before the year of 2014.
Page No- 9
Payables Turnover
Purchases
Average Trade Payables
2015
2014
2896889441
44500470
=65.098
3072036921
2738540
=1121.78
Revenue
Average Working Capital
2015
2014
6329964274
1545379710
=4.096
5508640000
289116566
=19.053
*Indicates the number of times the working capital is turned over. The rate of the
ration of 2014 is well.
Fixed Asset Turnover
Revenue
Average Net Fixed Asset
2015
6329964274
2311590599
=2.739
2014
5508640000
2013734249
=2.735
*the ratio establishes between fixed asset and sales. The ideal rate for the ratio is 5.
So fixed asset turnover ability is not so high.
Page No- 10
Revenue
Average Total Asset
2015
2014
6329964274
10753365565
=0.59
5508640000
9476977741
=0.58
*indicates the ability of a company to use its asset. So the ratio rate of the 2 years is
not so high.
Current Ratio
Current Asset
Current Liabilities
2015
2014
6741661301
4218330929
=1.599:1
7123130156
3538079861
=2.013:1
*Ideal ratio is 2:1. So the current ratio of 2014 is greater than the year of 2015.
Quick Ratio
2015
2014
1101566520
4218330929
=0.261
1473926142
3538079861
=0.417
*Ideal ratio is 1:1. So the quick ratio rate of two years is not so well.
Cash Ratio
Page No- 11
2015
2014
201898000
4218330929
=0.048
40661640
3538079861
=0.011
* Ideal ratio is 1:1. So the quick ratio rate of two years is not so well.
Debt-to-Assets Ratio
Total Debt
Total Assets
2015
2014
420624802
10753365565
=0.039
420624802
9476977741
=0.044
*indicates how many assets of a company are financed by debt. So, the ratio rate of
2014 is good.
Debt-to-Capital Ratio
Total Debt
Total Debt+Total Shareholdrs' Equity
2015
2014
420624802
3789130912
=0.111
420624802
3789130912
=0.111
*Ideal Ratio: Higher the ratio, higher the risk of default. So the ratio of 2015 & 2014
is same and well for the company.
Debt-to-Equity Ratio
Total Debt
Total Shareholdrs' Equity
Page No- 12
2015
2014
420624802
3368506110
=0.124
420624802
3368506110
=0.124
*indicates the extent to which a company relies on external debt. The ratio rate of 2
years is same.
Financial Leverage Ratio
Total Asset
Total Equity
2015
2014
10753365565
6038597111
=1.780
9476977741
5919429484
=1.600
Gross Profit
Revenue
2015
2014
2162410962
6329964274
=0.341
1975308452
5508640000
=0.358
*A profitability ratio. The ratio rate of 2 years is not so high. So it reflects fewer
efficiency in converting raw materials to income.
Operating Profit Margin
Operating Income
Revenue
Page No- 13
2015
2014
1070931754
6329964274
=0.169
997857436
5508640000
=0.181
*Measures profitability without concern for taxes and interest. The ratio rate of two
years is average.
Net Profit Margin
Net Income
Revenue
2015
2014
4541554406
6329964274
=0.717
3964568745
5508640000
=0.719
* Measures the percentage of each sales. The ratio rate of two years is average.
Operating ROA =
Operating Income
Average Total Asset
2015
1070931754
10753365565
=0.084
2014
997857436
9476977741
=0.111
*indicate the levels of operating profits relative to the firms total asset. The ration
rate of two years is almost same.
ROA =
Net Income
Average Total Asset
Page No- 14
2015
2014
4541554406
10753365565
=0.422
3964568745
9476977741
=0.418
*Indicates ability of a company to earn profit from its asset. The ratio rate of ROA is
good.
ROE =
Net Income
Average Total Equity
2015
4541554406
6038598640
=0.752
2014
3964568745
5919429484
=0.669
*indicates the return to the owner on the amount invested in the business. The ROA
rate of two years is good for the company.
P/E
2015
639.91
48.65
=13.153
2014
684.43
43.33
=15.796
Page No- 15
2015
639.91
45.98
=13.917
P/S
2014
684.43
39.69
=17.244
2015
639.91
688.56
=0.929
P/S
2014
684.43
727.76
=0.940
2015
639.91
124.06
=5.158
2014
694.43
130.66
=5.314
Page No- 16
2015
2014
14837714000
1513733000
=9.802
13165473000
1660913000
=7.92
Receivable Turnover
Revenue
Average Receivables
2015
12267996000
939573000
=13.056
2014
10881046000
832711000
=7.92
* Receivable turnover ratio of two years is almost average and well. The receivable
turnover ratio of 2015 has been improved before the year of 2014.
Page No- 17
Payables Turnover
Purchases
2015
2014
5811465000
1779661000
=3.265
5942325000
1461545000
=4.065
Revenue
Average Working Capital
2015
2014
12267996000
390590000
=31.40
10881046000
171604000
=63.40
* Indicates the number of times the working capital is turned over. The rate of the
ration of 2014 is well.
Fixed Asset Turnover
Revenue
Average Net Fixed Asset
2015
2014
12267996000
1843340000
=6.655
10881046000
1578664000
=6.892
* the ratio establishes between fixed asset and sales. The ideal rate for the ratio is 5.
So fixed asset turnover ratio rate ability is well.
Total Asset Turnover
Revenue
Average Total Asset
Page No- 18
2015
2014
12267996000
6683525000
=1.83
10881046000
5632593000
=1.93
* indicates the ability of a company to use its asset. So the ratio rate of the 2 years is
not so high.
Current Ratio
Current Asset
Current Liabilities
2015
2014
3951586000
3541219000
=1.852:1
=1.912:1
2132948000
1851418000
* Ideal ratio is 2:1. So the current ratio of 2014 is greater than the year of 2015.
Quick Ratio
2015
2014
330156000
2132948000
=0.155:1
293875000
1851418000
=0.159:1
* Ideal ratio is 1:1. So the quick ratio rate of two years is not so well.
Cash Ratio
Page No- 19
2015
2014
800000000
2132948000
=0.375:1
400000000
1851418000
=0.216:1
* Ideal ratio is 1:1. So the quick ratio rate of two years is not so well.
Debt-to-Assets Ratio
Total Debt
Total Assets
2015
2014
1747146000
2132948000
=0.819
1426465000
1851418000
=0.770
* indicates how many assets of a company are financed by debt. So, the ratio rate of
2015 is good.
Debt-to-Capital Ratio
Total Debt
Total Debt+Total Shareholdrs' Equity
2015
2014
1747146000
1979035000
=0.882
1426465000
1658354000
=0.860
* Ideal Ratio: Higher the ratio, higher the risk of default. So the ratio of 2015 & 2014
is same and well for the company.
Debt-to-Equity Ratio
Total Debt
Total Shareholdrs' Equity
Page No- 20
2015
2014
1747146000
1859035000
=0.939
1426465000
1758354000
=0.8112
* indicates the extent to which a company relies on external debt. The ratio rate of 2
years is same.
Financial Leverage Ratio
Total Asset
Total Equity
2015
2014
6339060000
4038513000
=1.570
5346874000
3354605000
=1.594
Gross Profit
Revenue
2015
2014
5255332000
12267996000
=0.428
4295302000
10881046000
=0.395
* A profitability ratio. The ratio rate of 2 years is not so high. So it reflects fewer
efficiency in converting raw materials to income.
Operating Profit Margin
Operating Income
Revenue
Page No- 21
2015
2014
1996401000
12267996000
=0.162
1520953000
10881046000
=0.140
* Measures profitability without concern for taxes and interest. The ratio rate of two
years is average.
Net Profit Margin
Net Income
Revenue
2015
2014
1425955000
12267996000
=0.116
1097609000
10881046000
=0.100
* Measures the percentage of each sales. The ratio rate of two years is average.
Operating ROA =
Operating Income
Average Total Asset
2015
1996401000
6339060000
=0.314
2014
4295302000
5346874000
=0.284
* indicate the levels of operating profits relative to the firms total asset. The ration
rate of two years is almost same.
Page No- 22
ROA =
Net Income
Average Total Asset
2015
2014
1425955000
1097609000
=0.224
=0.205
6339060000
5346874000
* Indicates ability of a company to earn profit from its asset. The ratio rate of ROA is
good.
ROE =
Net Income
Average Total Equity
2015
1425955000
4038513000
=0.353
2014
1097609000
3354605000
=0.327
* indicates the return to the owner on the amount invested in the business. The ROA
rate of two years is good for the company.
P/E
2015
1903.60
61.49
=30.958
2014
1425
47.33
=30.107
Page No- 23
2015
1903.60
91.98
=20.670
P/S
2014
1425
49.69
=28.678
2015
1903.60
1934.558
=0.983
P/S
2014
1425
1472.33
=0.968
2015
1903.60
174.16
=10.930
2014
1425
144.66
=9.850
Page No- 24
Recommendation
The next step is to find out how to turn them into batter Financial Position. In our
opinion we are recommending these:-
RAK Ceramics:
(1) Inventory turnover & receivable turnover ability should be improved further.
(2) Fixed asset turnover should be developed.
(3) Should try to increase current asset & cash.
(4) Should try to increase revenue as much as possible further.
Berger Paints:
(1) Total asset turnover & receivable turnover ability should be improved further.
(2) Fixed asset turnover should be developed.
(3) Should try to increase current asset, cash & cash investments receivables.
(4) Should try to increase revenue & operating income as much as possible further.
Page No- 25
Conclusion
We have already solved the report on the financial analysis regarding analysis and total
description in the two company. As we are in ongoing process to be a business graduate
we will have to face some difficulties regarding this report in our professional life. So
we must have to know the knowledge of management in business to regard running a
business and also many aspects of business. This report will help us to meet up the
problems that we may face in future.
Page No- 26
References
(1) http://rakcerambd.com/
(2) http://rakcerambd.com/investor-annual-reports.php
(3) http://www.bergerbd.com/
(4)http://www.bergerbd.com/corporate_info/reports/Annual
_and_Quarterly_Reports
(5) https://www.wikipedia.org/
(6)http://www.investopedia.com/university/peratio/peratio1
.asp
Page No- 27