Difference and similarities between RAK and Monno ceramics about Income, Tax, Assets etc.

1. INDEPENDENT UNIVERSITY, BANGLADESH (IUB)
Report on “RAK and Monno ceramic Income Review 2014 and 2015”
Subject: Accounting Management (ACN305)
Spring,2017, Section :01
Submitted to:
Naheem Mahtab
Senior Lecturer, School of Business
Independent University, Bangladesh
Date of Submission: 28/03/2017
Submitted by:
Junait Husain Rahul
ID(1310911)

2. RAK Ceramics (Bangladesh) Limited
The presentation of the Equity and Liability Section (2014 & 2015):
The equity and liability contains a great deal of useful information about an organization.
These sections are the part of balance sheet of a company. Here, RAK Ceramics
industries prepare their balance sheet by followings the IFRS-7 obligation. Their balance
sheet of the company has been prepared by flow the international accounting standards
(IAS-1) adopted by the institute of (ICAB). IFRS identifies certain minimum items that
should be presented on the balance sheet. Below there are discloser of equity and liability
in 2014 to 2015: -
 Equity: - In equity section company need to show all the things related with
equity. They show the common share authorized, issued, subscribed and
outstanding amount in equity section. They also need to show if, the company has
any preferred share, retained earnings, treasury stock and if there any diluted
shares. In, RAK Ceramics (2014 & 2015), they show the share capital, share
premium and retained earnings in their equity section. They disclose all the things
in note number 16 for 2014 and 16 for 2015. There are no diluted shares. There is
an increase of share capital and decrease of retained earnings in 2014 & 2015.
 Liabilities: -In Liability Section Company show all the long term and short term
Liability that, Company has to pay in future. The company also needs to show
provisions and contingent liabilities in disclosure if there is any possibility (ias-
37). But if the possibility is remote then they do not need to disclose anything. In,
RAK Ceramics Company liability section there is no contingent liability. In long
term liability part, they have borrowings and deferred tax liability in in 2014 &
2015. There is decrease of borrowing and deferred tax liability in in 2014 & 2015t.
In short term liability parts there are increase of all the items in 2014 and 2015.
But in 2012 there was decrease of borrowings and trade and others payables. All

3. the details are given in note number (19, 20, 21, 22, 23, 24 for 2014 and (18, 19,
20, 21, 22, 23 for 2015).
Monno Ceramic Industries Limited
The presentation of the Equity and LiabilitySection(2014 & 2015):
The equity and liability contains a great deal of useful information about an organization.
These sections are the part of balance sheet of a company. Here, Monno ceramic
industries prepare their balance sheet by followings the IFRS-7 obligation. Their balance
sheet of the company has been prepared by flow the international accounting standards
(IAS-1) adopted by the institute of (ICAB). IFRS identifies certain minimum items that
should be presented on the balance sheet. Below there are discloser of equity and liability
in 2014 to 2015: -
 Equity: - In equity section company need to show all the things related with
equity. They show the common share authorized, issued, subscribed and
outstanding amount in equity section. They also need to show if, the company has
any preferred share, retained earnings, treasury stock and if there any diluted
shares. In Monno ceramic in 2014 there is an increase of authorized, issued and
paid-up share capital. There is also an increase of revenue reserve & surplus both
2014 & 2015. There are no diluted shares and treasury stock. The all details are
given note. (Annual report analysis Same equity value in two year)
 Liabilities: - In Liability Section Company show all the long term and short term
Liability that, Company has to pay in future. The company also needs to show
provisions and contingent liabilities in disclosure if there is any possibility (ias-
37). But if the possibility is remote then they do not need to disclose anything. In
Monno Company liability section there is no contingent liability. In long term
liability part, they have long term Borrowing and deferred liability in 2014 &
2015. There is decrease of long term borrowing but deferred liability remains
same in 2015. In short term liability part there are increase of short term liability,

4. unclaimed dividend, provision for income tax, liabilities for other finance in 2014
& 2015. (Annual report analysis Same Liabilities value in two year)
No. Ratio Name RAK Ceramics Monno
Ceramics
Comment
1. Debt to Assets ratio
= Total Liabilities / Total Assets
4,714,766,925 /
10,753,365,565
= 0.44
790,616,493 /
3,068,425,352
= 0.26
2. Long term debt to Assets ratio
= Long Term Debt / Total Assets
497,742,616 /
10,753,365,565
= 0.05
16,744,000 /
3,068,425,352
=0.005
3. Debt to Equity Ratio
= Total Liabilities /Shareholder
Equity
4,714,766,925 /
6,038,598,640
= 0.78
790,616,493 /
2,277,808,859
= 0.35
4. Financial Leverage Ratio
= Total Assets / Shareholder
Equity
10,753,365,565 /
6,038,598,640
= 1.78
3,068,425,352 /
2,277,808,859
= 1.35

5. Solvency Analysis
2014
2015
Profitability Analysis
2014
No. Ratio Name RAK Ceramics Monno
Ceramics
Comment
1. Return on total capital =
(Net income - Dividends) /
(Debt + Equity)
(488,074,917-
25,068,749) /
(3,616,498,046+
5,860,479,695)
= 0.0488
(2,544,389-
10,421,553) /
(790,616,493 +
2,277,808,859)
= 0.0026
No. Ratio Name RAK Ceramics Monno
Ceramics
Comment
1. Debt to Assets ratio
= Total Liabilities / Total Assets
=3,616,498,046 /
9,736,849,086
= 0.37
790,616,493 /
3,068,425,352
= 0.26
2. Long term debt to Assets ratio
= Long Term Debt / Total Assets
500,000,000 /
9,736,849,086
= 0.05
16,744,000 /
3,068,425,352
=0.005
3. Debt to Equity Ratio
= Total Liabilities /Shareholder
Equity
3,616,498,046 /
5,860,479,695
= 0.62
790,616,493 /
2,277,808,859
= 0.35
4. Financial Leverage Ratio
= Total Assets / Shareholder
Equity
9,736,849,086 /
5,860,479,695
= 1.66
3,068,425,352 /
2,277,808,859
= 1.35

6. 2. Return on equity = Net
Income / Shareholder's Equity
488,074,917 /
5,860,479,695
= 0.083
2,544,389 /
2,277,808,859
= 0.0011
2015
Ratio Analysis
No. Ratio Name RAK Ceramics Monno
Ceramics
Comment
1. Return on total capital =
(Net income - Dividends) /
(Debt + Equity)
(1,094,339,767 -
30,538,272) /
(4,714,766,925 +
6,038,598,640)
= 0.0989
(2,544,389-
10,421,553) /
(790,616,493 +
2,277,808,859)
= 0.0026
2. Return on equity = Net
Income / Shareholder's Equity
1,094,339,767 /
6,038,598,640
= 0.18
2,544,389 /
2,277,808,859
= 0.0011
No. Ratio Name RAK Ceramics Monno
Ceramics
Comment
1. Basic Earnings Per Share =
(Net income – Preferred
dividends) / Weighted average
(488,074,917 –
0) / 336,850,611
= 1.45
(2,544,389-0) /
239,280,20
= 0.11

7. 2014
2015
number of common shares
outstanding
2. Diluted Earnings per share=
(net income- Preferred
dividends + interest) /
(weighted average number of
common shares outstanding+
potential diluted common
shares)
(488,074,917-
0+44,080,102) /
(336,850,611+0)
=1.59
(2,544,389-
0+10,421,553) /
(23,928,020+0)
=1.24
3. Book Value Per Share=
(Stockholders Equity -
Preferred Stock) / Number of
shares outstanding
(5,860,479,695-
0) / 336,850,611
=17.40
=95.19
(From Annual
Report)
4. Price to earnings ratio=
Market Value per Share
/ Earnings per Share
57.70 / 1.45
= 39.80
40/.11
=363.64
5. Dividends per share (DPS)=
Dividends / Number of shares
25,068,749 /
336,850,611
=0.07
10,421,533 /
23,928,020
=0.44
6. Dividend payout ratio =
Dividends / Net Income
25,068,749 /
488,074,917
= 0.05
10,421,553/
2,544,398
=4.1
No. Ratio Name RAK Ceramics Monno
Ceramics
Comment
1. Basic Earnings Per Share =
(Net income – Preferred
(1,094,339,767–
0) / 336,850,611
= 3.25
(2,544,389-0) /
239,280,20
= 0.11

8. Comments on Stock Options, Right shares & Bonus
Monno Ceramic Industries Limited.
They did not give right share to shareholders 2014 & 2015 and they did not mention
clearly about any stock option. They didn’t give bonus share.
dividends) / Weighted average
number of common shares
outstanding
2. Diluted Earnings per share=
(net income- Preferred
dividends + interest) /
(weighted average number of
common shares outstanding+
potential diluted common
shares)
(1,094,339,767-
0+18,935,684) /
(336,850,611+0)
=0.33
(2,544,389-
0+10,421,553) /
(23,928,020+0)
=1.24
3. Book Value Per Share=
(Stockholders Equity -
Preferred Stock) / Number of
shares outstanding
6,038,598,640-0 /
336,850,611
=17.93
=95.19
(From Annual
Report)
4. Price to earnings ratio=
Market Value per Share
/ Earnings per Share
66.90 / 3.25
= 20.58
40/.11
=363.64
5. Dividends per share (DPS)=
Dividends / Number of shares
30,538,272 /
336,850,611
=0.09
10,421,533 /
23,928,020
=0.44
6. Dividend payout ratio =
Dividends / Net Income
30,538,272 /
1,094,339,767
= 0.0279
10,421,553/
2,544,398
=4.1

9. RAK Ceramics (Bangladesh) Limited
They did not give right share to shareholders 2014 & 2015 and they did not mention
clearly about any stock option. They didn’t give bonus share.
Final Comments on Analysis
After completing the Equity and liability section of all companies, we can see that in all
companies there are no diluted shares. On the other hand, in 2014& 2015 RAK & Monno
didn’t give any right shares and bonus shares. RAK & Monno did not mention clearly
about any stock option and they have no contingent liability in their liability section. Few
ratio is better than other. But Most of the time RAK is better. Monno ceramics two-year
financial report are same. So their ratio is same in two years.