Empirical Study on Liquidity Management of Fu-Wang Ceramic Industry Limited
Origin of the Report
As a part of our study curriculum in BBA course, we have been assigned to conduct a study on “Working Capital Management (F-402), by Ms. Sheikh Tanzila Deepty. The required study suggests the analysis of liquidity management of a company in Bangladesh. We have been assigned Fu-Wang Ceramic Industry Limited for the Study. Purpose of Report
* To achieve deep knowledge about liquidity management practices in Bangladesh & to bridge the gaps between real life & theoretical knowledge. * To fulfill the partial requirement of our course.
* To gain report writing and communication skill.
* To perform different ratio analysis for better understanding of liquidity management practices. * To understand the linkages between profitability and liquidity.
Scope of the Report
The proposed report will cover the liquidity position of Fu-Wang Ceramic Industry Limited. It will also cover the liquidity management practices by this company and will also test the relationship between Liquidity and profitability of the company. Source of Data
The major sources of data for preparing the report are the annual reports, prospectus of these companies. Help was also taken from DSE and SEC websites. Methodology
After getting the assigned task at first we have accomplished a work plan involving the contents of our report, design and distribution of the duty and responsibility of each member of group. By taking the opinion of each member of our group we came to a decision to prepare the report based on company’s financial data. We have gone to DSE Library to collect relevant data.
There are some limitations that we have faced during the preparation of the report. The main limitation of the report is the unavailability of relevant data for further analysis. We have not also performed all of the modern liquidity indices due to the lack of the information.
Fu-Wang Ceramic Industry Limited
Fu-Wang Ceramic Industry Limited is one of the largest ceramic companies in our country. It was incorporated on 31st may 1995 as a private limited company & by a resolution passed on 28th February 1997 it was converted into a public limited company. It is a manufacturer of ceramic products. It has started its commercial operation on 11th October 1996 & has successfully completed thirteen months of commercial operation on 31st October 1997. The company was listed in the Dhaka Stock Exchange in 1998. It is mainly engaged in manufacturing and marketing of ceramics tiles. But recently it has started to produce bathroom sets and other sanitary wares. Fu-Wang Ceramic Industry Ltd, a concern of Fu-Wang Group, has created direct employment facilities for about 3,000 people, 60 percent of them are women. There are some 40 ceramic companies in the country; most of them are located in the Gazipur and Mymensingh industrial belt. At present, the total investment of country's ceramic industry is Tk. 20 billion and of them Tk. 10 billion is foreign investment. Out of 40, six companies (including Fu-Wang Ceramic) are listed on the country's stock exchanges. They are Monno Ceramic, Bengal Fine Ceramic, Standard Ceramic, Shinepukur Ceramic and recently listed RAK Ceramics. Recent Market Strategy
Fu-Wang Ceramic Industry Ltd hopes that the company's profitability will enhance this year (2009) with the liquidation of substantial amount of lease and term loan obligations in the year and adjustment of product pricing effected from August 1,2008 as well.The company raised per sqft of tiles to Tk 3.00 from Tk 2.00.According to the latest annual report of the listed company, it has a long-term loan worth Tk 22.00 million and short term loans worth Tk 319.12 million with some commercial banks. "Due to stiff price competition, we were unable to adjust our product pricing in the year ended June 30,2008 though we have experienced...
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