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Quick Ratio: RAK Ceramics Ltd.

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Current Ratio: 2012 2013 2014 2015 2016 2017 2.00 1.97 2.00 1.97 2.00 1.97 Figure: Graphical analysis of current ratio Current ratio shows us how much current asset one firm has against its one dollar worth of current liabilities. It shows us how efficiently and quickly one firm can convert its assets into cash paying the short term liabilities. From the table, we can see that at the year of 2017 RAK Ceramics Ltd. has a current ratio of 1.97. Current ratio shows us how much current assets the firm has against its current liabilities. However, too much current ratio means there’s is idle assets available and the use of assets is inefficient. There is a ongoing trend in the current ratio of RAK Ceramics …show more content…

In quick ratio, inventory is cut-off from the current ratio and then it’s calculated that how much current asset a firm has against its one dollar worth of current liability. In this ratio, inventory is cut-off because inventory needs to be sold to convert in cash and the process of selling the whole inventory might be time consuming and quite uncertain. From the table, we can see that at the year of 2017 RAK Ceramics Ltd. has a quick ratio of 1.108. In case of Rak Ceramics Ltd., leaving their inventory, their quick ratio is still above 1. Which means, they have enough current assets to pay off its current liabilities. Cash Ratio 2012 2013 2014 2015 2016 2017 0.40 0.49 0.42 0.26 0.19 0.29 Figure: Graphical analysis of Cash ratio The cash ratio shows how well a company can pay off its current liabilities with only cash and cash equivalents. This ratio shows cash and equivalents as a percentage of current …show more content…

The Asset Turnover ratio is an indicator of the efficiency with which a company is deploying its assets. From the table we see that RAK CERAMICS has a ratio of 0.60. This means that RAK CERAMICS generates less revenues per dollar of their total assets. RAK Ceramics should take measures to improve their sales in order to increase this ratio as it is continuously falling down over the years. Profitability Ratios Net Profit Margin 2012 2013 2014 2015 2016 2017 0.10 0.11 0.10 0.22 0.16 0.14 Figure: Graphical analysis of Net profit margin Net Profit margin is a measure of how much out of every taka of sales a company actually keeps in earnings. From the table we see that RAK CERAMICS has a ratio of 14%. But the sudden decrease also shows that RAK Ceramics being started with a healthy margin, is declining year by year and might be having hard times controlling over its

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