RAK Ceramics

RAK Ceramics Company is named after its founder Ras Al Khaimah in

1991.
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.
The core business of RAK Ceramics (Bangladesh) Limited is to manufacture
and sale of ceramics and fully vitrified tiles, bathroom sets and all types of
sanitary ware.The Company has over 2000 models active in the ceramic and
porcelain tile business and regularly add several new designs to the product
portfolio.
RAK Ceramics (Bangladesh) Limited is the market leader with around 25%
market share in tiles sector and around 65% market share in sanitary ware
sector based on production capacity. The current market for the Company
includes

construction

developers,

government

institutions

and

local

consumers. The Company has a strong market reputation in Bangladesh with

a wide network of 98 dealers nationwide and receives strong support from
RAK Ceramics PSC, UAE in terms of technological know-how, management
and marketing support.

The ownership of RAK Ceramics (Bangladesh) Limited comprises with 75.89%

held by the sponsors (71.67% by RAK Ceramics PSC, UAE and 4.22% by local
investor Mr. S.A.K. Ekramuzzaman) and remaining 24.11% is holding by
generalpublic including institutional investors as on December 31, 2015.

Financial Statement (2015)

Financial Statement (2014)

Financial Statement (2013)

6

Financial Statement (2012)

10

Quick Ratio
Current AssetsInventory
Current Liabilities

2015= 67416613012239844230
4218330929

= 1.07 times

2014= 71231301561835354727
3538079861

= 1.49 times

2013=

58273345881858379882
2643929982

= 1.50 times

2012= 49139843281777888718
2456242485

= 1.28 times

2011= 476844326416580625698
2077509374

=1.50 times

Comment:Quick ratio measures Companys ability to meet its short-term

obligations using its most liquid assets. A higher quick ratio indicates greater
short-term financial health. 1% quick ratio is accepted.
The ratios indicate that RAK Ceramics had enough liquidity in 2011 that is
1.50. It decreased in 2012, again kept increasing till 2014. But it significantly
lessened in 2015 that was 1.07.
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Settlement period of receivables

Trade Receviables
x 365
Sales Revenue

2015= 638387373

5059300403 x 365

= 46.06days

2014= 580719781

5047345373 x 365

= 41.99days

2013= 720608027

4687262509 x 365

= 56.11days

2012=

621510397
4908171279 x 365

= 46.22days

2011=

526123351
4580008209 x 365

= 41.93days
Comment:

It shows, on average how long it takes to collect cash from credit

customers. The ratio shows, in 2011 RAK took 41.93 days on average to collect due
receivable, 46.22 days 2012, but it increased at 56.11 days in 2013 which indicates

12

lack of proper credit control. It came to an acceptable level in 2014 but rises again
in 2015. It is a bad sign.

Settlement period of payable

Trade Payables
x 365
Purchase
640626199

2015= 1779555491 x 365

= 131.4 days

2014= 355096186

1466848016 x 365

= 88.36 days

2013= 27661728

700041647 x 365
= 14.42days

2012= 159789966

1485997165 x 365

= 39.25 days

2011= 306963146

1310179114 x 365

= 85.52 days

Comment:The ratio represents the credit period taken by the company

from its suppliers. A long period represents a source of free finance.

13

The ratio shows, in 2011 RAK got 85.50 days on average to clear its debts. It
lessened in 2012 and 2013 to only 14.42 days. But the condition changed in
2014. Company got the maximum period to pay its due 131.4 days in 2015.
It is a good sign.

Return on capital employed

(ROCE)
Operating Profit
x 100
Share capital + Reserves+ Noncurrent liabilities

1455987536
3368506110 +1473647979+496435996 x 100

2015:

=27.27%
1057321166
3368506110 +1473647979+78418185 x 100

2014:

= 21.49%

2013:

3062278290+1473647979+56957686
1041025563
x 100

= 22.67%
910508985
2783889350+1473647979+139729663 x 100

2012:

= 20.71%
994864945
2530808500+1473647979+167573712 x 100
= 23.85%

14

2011:

Comment: The ratio is used to show how efficiently its investments are
used to create a profit. A good ROCE is one that is greater than the rate at
which the company borrows.
Here, we can see in 2011 ROCE of RAK was 23.58%, decreased to 21.49% in
from 2012 to 2014. But it cheered up in 2015 by 27.27%. The progress rate
of the company is not pleasurable.

Earnings per Share (EPS)

Earnings available

ordinary shareholders
Number of ordinary sharesissue

1094339767
3368506110

2015:

= 0.32tk

500210985
2783889350

2014: 488074917
3368506110

= 0.14tk
500210985
2783889350

2013:

=
= 0.28tk
2012:
= 0.18tk

15

641737193
2011: 2530808500

= 0.25tk
Comment: EPS measures how much profit earned on behalf of each
outstanding shares issued for the accounting period. The ratio is showing
that in 2011 RAK had 0.25 tk earning on per outstanding shares that
decreased by 0.18 tk in 2012, raised in 2013 by 0.28 tk, again collapses
dramatically in 2014 by only 0.14tk, but finally progressed in 2015 by 0.32.

Shinepukur Ceramics
Shinepukur Ceramics Ltd. (SCL) is the leading Bone China & Porcelain
tableware manufacturer and exporter of Bangladesh. Shinepukur Ceramics
has been a successful brand, thanks to its state-of-the-art manufacturing
facilities, about 2,700 highly skilled & motivated people and cutting-edge
technology.
From its inception, SCL has been able to gain substantial headway against its
competitors and acquire commendable market share from its competitors
both in Porcelain and in Bone China. Therefore SCLs position in the world
tableware industry is very high, with its world-class product quality, which
helped to attract and retain leading century-old branded companies as its
bluechip customers from USA, Canada, UK, Germany, France, Italy, Japan,
Sweden, Norway, Denmark, Finland, Spain, Poland, Mexico, Brazil, Chile, UAE,
Australia, New Zealand, Turkey, India, Egypt, Russia and still growing.
In domestic market also, Shinepukur Ceramics Ltd. is very well known for its
premium quality tableware products. In Bangladesh, SCL is the leader in
Ceramics Market and ranks as number 1 in terms of sales revenue and
market share. It has more than 250 dealers to sell and distribute SCL product
in Bangladesh Market. In the hospitality sector, all the international hotels in
Bangladesh use SCL products.

16

Financial Statement (2015)

17

18

Financial Statement (2014)

19

20

Financial Statement (2013)

21

22

Financial Statement (2012)

23

Financial Statement (2011)

24

25

26

Quick Ratio
Current AssetsInventory
Current Liabilities

2015:

1060146634488
1584117
= 0.27 times

2014:
1044626671352
1890252
=
0.20 times

2013:

1710385576912642408
1756989717
= 0.45 times

2012:

1796412804845059407408
1772067117
= 0.54 times

2011:

1617231951891674750
1648906953

= 0.44 times

1. Comment: Quick ratio measures Companys ability to meet its shortterm obligations using its most liquid assets. A higher quick ratio
indicates greater short-term financial health. 1% quick ratio is
accepted.

27

The ratios indicate that Shine Pukur Ceramics had low liquidity in 2011 that is
o.45 and 2012 its liquidity is as nearly same that is 0.54 and up to 2015 its
liquidity is o.27 as we know that quick ratio 1% is acceptable so we cant
accept it.

Settlement period of receivables

Trade Receviables
x 365
Sales Revenue

2015:

179691
1119480 x 365
= 58.59 days

2014:

2013:

157873
1263135 x 365
= 45.62 days

674987355
1704567234 x 365
= 144.54 days

2012:

853413145
1942350752 x 365
= 160.37 days

2011:

587933889
1901444562 x 365
= 112.86 days

28

Comment It shows, on average how long it takes to collect cash from credit
customers. Increasing account receivable collection period is usually a bad
sign. The ratio shows, in 2011 Shine pukur took 112.86 days on average to
collect due receivable, 160.37 days 2012, but it decrease at 144.54 days in
2013 which indicates lack of proper credit control. It came to an acceptable
level in 2014 but rises again in 2015. It is a bad sign.

Settlement period of payable

Trade Payables
x 365
Purchase
549161698

2014= 368572105 x 365

= 543.84 days
2013: 469825285

706010383 x 365

= 242.89 days

2012: 445028986

652490552 x 365

= 248.95 days

2011: 291823065

694085694 x 365
= 153.46 days

Comment: The ratio represents the credit period taken by the company
from its suppliers. A long period represents a source of free finance.
The ratio shows, in 2011 Shine pukur got 153.46 days on average to clear its
debts. It increase in 2012 that is 248.95 days and 2013 is 242.89 days. 2014
it more increase it is a bad sign.
29

Return on capital employed

(ROCE)
Operating Profit
x 100
Share capital + Reserves+ Noncurrent liabilities

190614
1469661+2966690+807295 x 100

2015:

= 3.64%

258365
1469661+2966690+534600 x 100

2014:

= 5.20%
370026306
1469660550+2966690015+629397933 x 100

2013:

= 7.30%
568165442
1277965700+2907734989+ 803483989 x 100
= 11.39%
2011:

532318752
1111274530+ 2953318420+ 1005382500 x 100

30

2012:

= 10.50%

Comment; The ratio is used to show how efficiently its investments are
used to create a profit. A good ROCE is one that is greater than the rate at
which the company borrows.
Here, we can see in 2011 ROCE of Shine pukur was 10.50%, increased
to11.39% in from 2012 but decrease 7.30% and up to 2015 it is decreaseble.
The progress rate of the company is pleasurable.

Earnings per Share (EPS)

Earnings available

ordinary shareholders
Number of ordinary sharesissue

2015:

5284
1469661

= 0.00 tk.
2014: 47356

1469661

= 0.03 tk.
11801568
1469660550

2013:

= -.01 tk.
2012: 90285057

1277965700

= 0.07 tk.
31

2011: 168768102

1005382500

= 0.17 tk.
Comment: EPS measure show much profit earned on behalf of each
outstanding share issued for the accounting period.
The ratio is showing that in 2011 RAK had 0.17 tk earning on per outstanding
shares that decreased by 0.07 tk in 2012, decrease in 2013 by .01 tk, again
collapses dramatically in 2014 by only 0.03 tk, and 2015 it is more
decreaseble that is 0.00 tk.

Comparison of Financial Ratios

Quick Ratio:
Name of the
Organization

2015

2014

2013

2012

2011

Remarks

RAK Ceramics

1.07

1.49

1.50

1.28

1.50

Shine Pukur
Ceramics

0.27

0.20

0.45

0.54

0.44

Good
sign
Bad sign

Settlement period of receivables:

Name of the
Organization
RAK Ceramics
Shine Pukur
Ceramics

2015

2014

2013

2012

2011

Remarks

46.06
58.59

41.99
45.62

56.11
144.54

46.22
160.37

41.93
112.86

Good Sign
Bad Sign

Settlement period of payables

32

Name of the
Organization
RAK Ceramics
Shine Pukur
Ceramics

2015

2014

2013

2012

2011

131.
4

88.36

14.423

88.36

131.4

543.8
4

242.89

248.95

153.46

Remark
s
Good
sign
Better

Return on Capital Employed

Name of the
Organization
RAK Ceramics
Shine Pukur
Ceramics

2015

2014

2013

2012

2011

27.27%

21.49
%
5.20%

22.67%

20.71%

23.85%

7.30%

11.39%

10.50%

3.64%

Remark
s
Good
sign
Bad
Sign

Earnings Pers Share (EPS)

Name of the
Organization
RAK Ceramics
Shine Pukur
Ceramics

2015

2014

2013

2012

2011

Remarks

0.32
0.00

0.14
0.03

0.28
-0.01

0.18
0.07

0.25

Good sign
Bad Sign

Opinion in Which Company we will invest:

From the comparison we can see that the RAK ceramics have a good liquidity
on their hand in the last year 2015 that is 1.07 where Shinepukur had 0.27
liquidity in last year so we can measure that RAK staying in a good position
then Shinepukur. Shinepukur also take more days rather than RAK ceramics
we see that at the last year it took 112.86 days to collect cash where RAK
took 46.06 days it is a bad sign for Shinepukur ceramics. In terms of ROCE &
EPS RAK was a better position than Shinepukur because we can see that
Shinepukur ROCE was 3.64% in last year it means its profit is very low in
terms of long term capital invested where RAK had 27.27% ROCE its profit is
better. In terms of EPS the Shinepukur profit was 0.00tk on behalf of each
outstanding share in the last year where RAK was 0.32tk profit. So observing
33

the overall situation we can say that if we invest in RAK we will get more
profit on behalf on each outstanding share their liquidity is also high so its
risk is low than Shinepukur & its ROCE is also situated in a better position so
we decide that we will invest our money in RAK Ceramics.
Conclusion
The two companies are very famous & renowned in the ceramic industry by serving their good
products and services but in the financial term RAK is a good position rather than Shinepukur so
we choose it for our investment.

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