INTRODUCTION TO FINANCE

1. Md. Hasibul Islam
Id: 180314
Business Administration
Discipline,
Khulna University.
Md. Yasin Mollah
Id: 1780335
Business Administration
Discipline,
Khulna University.
Report on Financial Ratio Analysis
of Fu-Wang Ceramics Industries Ltd.

2. Introduction
 Fu-Wang Ceramics Industries Ltd. is is a pioneer ceramics company in Bangladesh
 It is now a public limited company
 Produces quality tiles in European standard
 It has created a revolution in ceramic industry in Bangladesh
 The company is only produces tiles and markets them
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3. Executive Summary
Fu-wang Ceramics Industries Ltd. is a pioneer ceramics company in Bangladesh.
They operating their business from almost 24 years. Here, in this report, we have
analysis it’s financial statements of 2016 and 2017. After analyzing it’s data, we got
that, most of it’s financial determinants shows inefficiency. And some of them
shows positive such as in quick ratio, average collection period, debt to total asset
ratio.
And between 2016 and 2017 the company done better in 2016 than in 2017.
3

4. Objective of the Study
The broad objective of the study is to evaluate the performance of Fu-Wang Ceramics
Industries Ltd against some financial standards.
 To understand the firm’s profitability position
 To see firm’s ability to repay it’s loans
 To see its return on investment, return on equity
 To see its liquidity
 To see its efficiency in using resources
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5. Methods of the study
5
In this study, we have ‘Ratio Analysis’ as method of study. We have analized different ratios
of the firm (such as Current Ratio, Quick Ratio, Inventory Turnover Ratio, Inventory
Turnover Ratio, Total Asset Turnover Ratio, Receivable Turnover Ratio
, Average Collection Period, Profit Margin Ratio, Return on Asset
, Return on Equity, Debt to Total Asset Ratio
and )to understand its financial position.

6. Data Analysis
Analysis of Liquidity Group:
Current Ratio:
 Both of the year Current Ratio satisfies its industry average
 Current Ratio of 2016> Current Ratio of 2017
6
0
0.5
1
1.5
2
2.5
3
3.5
Year Current
Ratio
Industry
Average
2016 3.22 2:1
2017 2.17 2:1

7. Quick Ratio
7
Quick Ratio details:
 Quick Ratio in 2016> Industry Average
 Quick Ratio in 2017< Industry Average
Year Quick Ratio Industry
Average
2016 1.01 1:1
2017 0.67 1:1
0
0.2
0.4
0.6
0.8
1
1.2

8. Efficiency Ratio
Inventory Turnover Ratio
 Inventory Turnover of both of the year dose not satisfies industry average
 Inventory Turnover Ratio in 2016>Inventory Turnover Ratio in 2017
8
0
1
2
3
4
5
6
7
8
Year Inventory
Turnover
Ratio
Industry
Average
2016 1.72 7 Times
2017 0.73 7 Times

9. Fixed Asset Turnover Ratio
9
 Fixed Asset Turnover Ratio of both of the year does not satisfies
Industry average
 Fixed Asset Turnover Ratio of 2016> Fixed Asset Turnover Ratio of 2017
0
1
2
3
4
5
6
Year Fixed Asset
Turnover Ratio
Industry
Average
2016 0.98 times 5.4 times
2017 .049 times 5.4 times

10. Total Asset Turnover Ratio
10
 Both of the year Total Asset Turnover Ratio does not satisfies
Industry average
 Total Asset Turnover Ratio of 2016> Total Asset Turnover Ratio of 2017
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
Year Total Asset
Turnover
Ratio
Industry
Average
2016 0.53 times 1.5 times
2017 0.24 times 1.5 times

11. Receivable Turnover Ratio
11
 Both of the year Receivable Turnover Ratio does not satisfies
Industry average
 Receivable Turnover Ratio of 2016> Receivable Turnover Ratio of 2017
0
2
4
6
8
10
12
Year Receivable
Turnover
Ratio
Industry
Average
2016 9.52 times 10 Times
2017 3.79 times 10 Times

12. Average Collection Period
12
 Both of the year Average Collection Period satisfies industry average
 Average Collection Period 2016< Average Collection Period 2017
0
10
20
30
40
50
60
7 0
80
90
100
Year Average
Collection
Period
Industry
Average
2016 37.80 days 36 days
2017 95.11 days 36 days

13. Profitability Ratio
Profit Margin Ratio
 Both of the year Profit Margin Ratio Satisfies it’s industry average
 Profit Margin Ratio in 2016> Profit Margin Ratio in 2017
13
0
2
4
6
8
10
12
14
16
18
Year Profitability
Ratio
Industry
Average
2016 15.80% 6.7%
2017 15.37% 6.7%

14. Return on Asset
14
 Both of the year Return on Asset does not satisfies it’s industry
average
 Return on Asset in 2016> Return on Asset in 2017
0
2
4
6
8
10
12
Year Return on
Asset
Industry
Average
2016 8.41% 10%
2017 3.82% 10%

15. Return on Equity
15
 Both of the year Return on Equity does not satisfies its industry
Average
 Return on Equity in 2016> Return on Equity in 2017
0
2
4
6
8
10
12
14
16
Year Return on
Equity
Industry
Average
2016 10.31% 15%
2017 5.36% 15%

16. Investment Ratio
Debt to Total Asset Ratio
 Both of the year Investment Ratio dose not satisfies it’s industry
Average
 Investment Ratio in 2016< Investment Ratio in 2017
16
0
5
10
15
20
25
30
35
Year Investment
Ratio
Industry
Average
2016 18.51% 33%
2017 28.82% 33%

17. Earnings per Share
 Earnings per Share in 2016 is 1.17
 Earning per share in 2017 is 0.64
 Earnings per Share in 2016> Earnings per Share in 2017
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18. Conclusion
In this study of Fu-Wang Ceramics Industries Ltd we have analyzed different ratios of this
company. After the study, we have found that, for most of the cases, its ratios can not be able
to satisfy their industry average and have showed inefficiency in their area.
And between 2016 and 2017 the company done better in 2016 than in 2017 without in at
quick ratio, average collection period, debt to total asset ratio.
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