Bangladesh University of

Professionals

Term Paper
of
Introduction to Business
Code: ALD1104

Topic:
Impacts of macroeconomic factors
and financial analysis of

Submitted To: Submitted By:

Sharmin Sultana Sumi Team 02 -
Lecturer Section B
Department of Business Department of Business
Administration Administration
in Finance & Banking in Finance & Banking
Faculty of Business Studies Faculty of
Bangladesh University Business Studies
of Professional Bangladesh University
of Professional

Date of Submission: 3rd November, 2022

 Team Information
Team - 02

Batch &
Name ID Remark
Section

MD MONIRUL
2222151036
ISLAM BHUIYAN

REZWANA
2222151044
FAREHA

MD AL Department of
SHAHORIAR 2222151064 Business
HOSSAIN Administration
in Finance &
Banking

AHNAF
2222151074 Batch 2022
SHAHRIAR
Section B

AZMAINE
2222151088
TARIQUE RINE

SUNNY
MOHAMMAD 2222151114
ADON
 Letter of Transmittal

The 3rd of November 2022

Sharmin Sultana Sumi

Lecturer

Department of Business Administration in Finance & Banking

Faculty of Business Studies

Bangladesh University of Professionals

Mirpur Cantonment, Dhaka - 1216

Subject: An application for accepting the Term paper on the assigned topic.

Respected Ma’am,

This is our great pleasure for the Department of Business Administration in Finance &
Banking, Batch 2022 to have the opportunity to submit the report on the Impact of Micro and
Macroeconomics, Different Analysis, and overall situation of the firm. As a part of our term
paper, we chose Shinepukur Ceramics Limited.

This report is based on published reports, websites, and other related findings from various
sources. Through our best sincerity, we have tried to uptake all the related issues in the report
within several limitations. We fervently pray and ardently hope that all these findings will be
able to meet your requirements.

Therefore, we would like to place this report to your kind judgement and valuable suggestions.

Sincerely,

Team 02

Section B

Department of Business Administration in Finance & Banking

Faculty of Business Studies

Bangladesh University of Professionals

 Executive Summary

Ceramic sector is one of the most prominent sectors for Bangladesh because through
this sector Bangladesh earns foreign currency and the “Made in Bangladesh” tag
becomes well-known through-out the countries. In this Ceramic sector Shinepukur
Ceramic is also a very known name for the tableware portion. For this study we will
see the Macroeconomic factors that effects this company and how this company deals
with them. Next, we’ll use some well-known analysis like Porter’s Five forces Analysis
where we’ll analysis the operating environment of competition this company faces.
Next up we have PESTLE analysis to see the external factors that effect this business.

Furthermore, we will see the business model and the management structure the
company has continuing to the Marketing mix this ceramic company has. For more
detailed analysis we will see the Financial and Accounting related status of the firm
through some numbers and important Ratio analysis. Financial structure contains the
Debt-to-Equity mix, source of the financing, Investment Pattern and Dividend History.
After that for the accounting portion we’ll see which accounting methods that this
company followed and some important ratio analysis.

Because a business is a part of the society, it has some responsibility to the society that
one must fulfill. Thus, we will also see their Practice of ethics, social and environmental
consciousness while doing the business.

Ceramic sector has a lot of potentials left for it to showcase in Bangladesh’s scenario.
But people from our age have little interest in this sector. So, we chose this sector to
work on and choose one of the greatest survivors in this industry. It is one the subsidiary
of Bangladesh’s biggest private sector conglomerate, BEXIMCO Limited so they have
a great backing none the less. Through this study we tried our best to show everyone
how this company puts himself up for the betterment of our economy and its influence
on the Ceramic sector of Bangladesh.
TABLE OF CONTENTS

Chapter 1: Introduction .............................................................................................................. 1

Chatper 1.1: Origin of the study ............................................................................................. 1
Chapter 1.2: Scope of the study .............................................................................................. 1
Chapter 1.3: Objective of the study ........................................................................................ 2
Chapter 1.4: Methodology of the study .................................................................................. 2
Chapter 1.5: Limitations of the study ..................................................................................... 2
Chapter 2: Findings .................................................................................................................... 3
Chapter 2.1: Impact of Macroeconomic Factors .................................................................... 3
Chapter 2.2: Sector Analysis .................................................................................................. 5
Porter’s Five Forces ........................................................................................................... 5
PESTLE Analysis ............................................................................................................. 8
Chapter 2.3: Business Model & Value addition ................................................................... 11
Value Addition: ................................................................................................................ 12
Chapter 2.4: SWOT Analysis ............................................................................................... 13
Strengths: ......................................................................................................................... 13
Weakness: ........................................................................................................................ 13
Opportunities: .................................................................................................................. 14
Threats: ............................................................................................................................ 14
Chapter 2.5: Management Structure ..................................................................................... 15
Chapter 2.6: Marketing Mix ................................................................................................. 16
Distribution Strategy: ....................................................................................................... 16
Chapter 2.7: Financing ......................................................................................................... 18
Chapter 2.8: Accounting Methods ........................................................................................ 20
Chapter 2.9: Important Ratio Analysis ................................................................................. 21
Chapter 2.10: Ethics & Social and Environment Consciousness while doing Business ...... 26
Chapter 3: Conclusion.............................................................................................................. 27
Chapter 4: Reference................................................................................................................ 28
CHAPTER 1: INTRODUCTION
CHATPER 1.1: ORIGIN OF THE STUDY

As a student of Bachelor of Business Administration (BBA) in Finance and Banking, we are

bound to do one of the major courses called Introduction to Business in the first semester of
our BBA degree. We are completing this course under our respected faculty, Sharmin Sultana
Sumi, Lecturer of the Department of the Business Administration in Finance & Banking,
Faculty of Business Studies, BUP. As a part of this course, our respected faculty instructed us
to analyze different factors and some ratio analysis of a manufacturing company. In this study,
we will be seeing different impact of economic factors, sector analysis, the business model and
the financial condition of Shinepukur Ceramics limited.

According to her instructions, we tried our best to perform this task.

CHAPTER 1.2: SCOPE OF THE STUDY

Our study focused on analyzing multiple factors on our selected firm. Throughout this study 5
members of team 2 worked together for 16 days to analyze and prepare this report. The location
for this study was Shinepukur Ceramics Limited. In our study we focused on multiple factors
and how they affect our assigned firm as an individual business organization on a national
scale. For this study we did analysis on both national and global impacts of macroeconomics
factors, sector analysis, business model, management structure, marketing mix, financing of
the firm and ratio analysis to overall measure the health of the company. Macroeconomics is a
branch of economics concerned with the behavior and performance of the economy as a whole.
In this sector we focused on multiple factors like inflation, economic growth rate, price level,
etc. We focused on showing its positive/negative impact. In the business model we focused on
the economic valuation and SWOT analysis showing us the threat for the firms and its strengths
and weaknesses. We also used PORTER's Five Forces Model and PESTLE analysis.
Furthermore, we talked about the marketing strategy, the financing of the firm. Lastly, we did
ratio analysis on the firm’s financial statement for the last 2 years to give an insight view on
the profitability, solvency, liquidity to understand the firm's standing as an individual. In this
part we used some important basic ratios to measure their financial health and calculate their
risk and strengths.

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CHAPTER 1.3: OBJECTIVE OF THE STUDY
➢ To see the impact of Macroeconomic factors on the firm

➢ To analyze the result of Porter’s 5 forces and PESTLE analysis of the firm

➢ To see the business model that the firm follow

➢ To overview about the management structure of the firm

➢ To have an idea about the financial condition of the firm

➢ To have a broad idea about the ceramic sector of Bangladesh

CHAPTER 1.4: METHODOLOGY OF THE STUDY

In this study, we conducted financial statement analysis to determine this company’s financial
health and measure its growth potential in the Ceramics Industry. Among several methods of
doing this study, we conducted few ratios analysis. The population sampled for the study was
limited to Shinepukur Ceramics Limited. We were instructed to choose a specific
manufacturing company that is enlisted in the Dhaka Stock Exchange.

Secondary Sources of the Information:

➢ Annual report of the Company provided from the company’s official website.

➢ Various reports of the company were collected from the company’s website and

Wikipedia.

➢ Different books on Accounting, Finance and Banking & Introduction to Business

CHAPTER 1.5: LIMITATIONS OF THE STUDY

The study has been conducted subject to certain limitations. Time constraints are one of the
major limitations. Various factors are involved such as time/cost/information etc. So, we have
to face certain problems while working on this study, especially the lack of experience. The
lack of available previous research materials is due to insufficient knowledge of this research
field. We have tried our best to overcome these limitations in this study.

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CHAPTER 2: FINDINGS
CHAPTER 2.1: IMPACT OF MACROECONOMIC FACTORS

Economies are often cyclic at the macroeconomic level. As positive influences promote
prosperity, increased demand may trigger higher prices, which may, in turn, suppress the
economy, as households restrict their spending. As supply begins to outweigh demand, prices
may again dip, leading to further prosperity, until the next shift in economic supply and
demand. Macroeconomic factors include inflation, fiscal policy, employment levels, national
income, and international trade etc. Macroeconomic factors are important and hard to ignore,
impacting economies and the state of our personal finances. Governments try to manage these
factors and maintain stability. However, the economy still moves through boom-and-bust
cycles, and it generally pays to keep on top of this and be aware of what is going on to best
protect and enhance your finances. This part was sourced from Investopedia. Here we’ve
shown how different macroeconomic factors impact Shinepukur Ceramics Limited.

I. INFLATION:
Higher Inflation is generally negative for the stock market because it causes higher market
interest rates, increase uncertainty about future prices & costs, and it harms firms that cannot
pass their cost increases on to consumers. Although these adverse effects are true for most
industries, some industries benefit from inflation. Shinepukur ceramics Ltd. which has high
operating leverage may benefit because, many of its costs are fixed in National terms whereas,
revenues increase with inflation. Because we are currently facing a higher than regular level of
inflation in our country they are being affected because of the high cost of raw material and
other needed goods.

II. INTEREST RATE:

As Shinepukur ceramics Ltd. is an existing company in our economy, there has a negative
impact on interest rates if it rises. Higher interest causes higher operating expenses which may
reduce our profit margin. Also, if the company has investments in floating rate Bonds or
deposits, the company can also benefit or also be damaged from it.

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III. INTERNATIONAL ECONOMY:
As we are producing export quality finished products, if we can create free trade zones in
different countries it will broaden the market internationally and overall economic conditions
will be developed. Because of the COVID-19 pandemic people stopped buying things like
ceramic made tableware throughout the word which affected the global sell of the company.
This resulted in a lower export income then the previous years.

IV. DEMOGRAPHICS:
The study of demography includes much more than population growth and age distributions.
Demographics also include the geographical distribution of people, the changing ethnic mix in
society and changes in society and changes in income distribution. In our country mostly
family-oriented people tend to buy more ceramic tableware and young people tend to stick with
melamine or other kind of tableware.

V. TECHNOLOGY:
Trends in technology can affect numerous industry factors including the product or service
and how it is produced and delivered. As new technologies are innovated, we can increase
our productivity and reduce our delivery time and increase our profit margin. This company
got its Bone China production machine from Japan. These kind of investment pays off in the
long run of a firm.

VI. POLITICS AND REGULATIONS:

Because political change reflects social values, today’s social trend may be tomorrow's laws,
regulations or tax. The industry and assess political changes relevant to the industry. Regulatory
changes have affected numerous industries also. Regulations and laws affect international
commerce, international tax, laws, tariff, quotas, embargoes and other trade barriers in different
industries and global commerce in various ways. Our country is considered a politically
imbalanced nation. Because of this issue the company faces many non-disclosable problems.

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CHAPTER 2.2: SECTOR ANALYSIS

PORTER’S FIVE FORCES

Porter's Five Forces is a model that identifies and analyzes five competitive forces that shape
every industry and aids in determining an industry's weaknesses and strengths. Five Forces
analysis is frequently used to determine corporate strategy by identifying the structure of an
industry. Porter's model can be applied to any sector of the economy to better understand
industry competition and increase a company's long-term profitability. Named after Michael
E. Porter, a Harvard Business School professor.

Porter's 5 forces are:

➢ Competition in the industry

➢ Potential of new entrants into the industry
➢ Power of suppliers
➢ Power of Buyers
➢ Threat of substitute products

COMPETITION IN THE INDUSTRY

In ceramics industry, there are mainly three leading company in Bangladesh. They are Monno
ceramics, RAK ceramics and lastly Shinepukur ceramics. RAK ceramics doesn’t produce
tableware. So, the rivalry remains between Shinepukur Ceramics and Monno ceramics.

But if we see the market, the brand value of Shinepukur ceramics is more than Monno ceramics.
Because it is a sister company of Beximco Group of Industries. We all know Beximco Group
have a relatively higher brand value in market. Salman F Rahman is the leading character of
this group. So, consumers buy ceramics product from Shinepukur ceramics more. But
consumers don’t buy from Monno ceramics, this is not at all. Consumers also buy from Monno
ceramics. But because of this huge brand value Shinepukur Ceramics is ahead of Monno
Ceramics in this regard. We can tell that Shinepukur Ceramics ltd is at stable position in this
portion. So, if we summarize, according to Porter’s Five Forces Model Shinepukur ceramics’
position is stable in current market. Because four forces out of five are positive for Shinepukur
ceramics.

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POTENTIAL OF NEW ENTRANCE

In ceramics industry, the threat of new entrance is also relatively low. Because existing
ceramics company’s position is relatively high. They own a position in market. They have
enough cash flow in market. They are listed in DSE or CSE. And finally, a new ceramics
industry needs a huge amount of investment which is quite tough for any person.

Shinepukur ceramics is established in 1997. It has already passed 25years. This company
already makes their market and brand value. It has a good amount of number of shares. Their
EPS is also stable. Moreover, it is a sister company of Beximco Group. They have enough
brand and market value. So, we can easily tell that threat of new entrance for Shinepukur
Ceramics Ltd is low. Company has a stable position in market.

POWER OF SUPPLIERS

The power of suppliers in this sector is low. Because there are 183 ceramics raw materials
suppliers and exporters in Bangladesh. Moreover, the raw materials (white clay) mainly come
from Mymensingh, Netrokona, and Sylhet district. Further, China, India, New-Zealand, and
Germany is the main source of white clay. So, there are a lot of options in ceramics industry’s
hand. So, when company have more options, the power of that company is relatively high.
Because company can move to another options. If company think the quality, quantity, price,
and other necessary things is not well of any suppliers then company will move. This is good
for a company when company have more power than suppliers.

So, we can tell that Shinepukur Ceramics ltd is a good position in this portion.

POWER OF BUYERS

In ceramics industry portion, there have power of buyers. As Shinepukur ceramics produces
tableware, the buyers have a lot of options. Because this table wares are also produced by
melamine, steel, and plastic company. If the price, quality, and other necessary portion is not
satisfying, consumer can move to those products. Consumers have that options.

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Moreover, in Bangladesh, trend is a big issue. When ceramics tableware is trendy products,
consumers buy these products at large portion. But after this trend the rate of sales can be
decreased. As, these ceramics products is quite expensive, so when the economy of Bangladesh
is undergrowing like at this moment, then consumers may buy products at short range. This is
not well for a company where the power of buyer is higher.

So, we can tell that Shinepukur Ceramics ltd is quite lag in this portion.

THREAT OF SUBSTITUTE PRODUCT

The threat of substitute is relatively low at ceramics industry, Bangladesh. Because there is not
a huge amount of ceramics company who produce ceramics tableware. The well-known
ceramics company are RAK ceramics, Monno ceramics, Artisan ceramics etc. Some another
ceramics company who produces ceramics tableware are FARR ceramics, Paragon ceramics,
People ceramics, Protik ceramics etc. But in this regard consumer have some trust issue about
this company’s product. Mainly consumers want a quality product. Because consumers don’t
buy ceramics products daily. So, it is natural that they want quality product. Shinepukur
ceramics and Monno ceramics give that assurance of quality. Consumers like this two company
most. Moreover, as the amount of substitute is quite low, the threat of substitute is also low.
Consumers have limited options if they want to buy ceramics tableware. It is well for any
company.

So, the threat of substitute is low. There is no risk of new entry. And finally, in company rivalry
portion, Shinepukur ceramics is ahead of Monno ceramics. Only the buyer power of consumers
is high. For this reason, we can easily tell that Shinepukur ceramics’ market position is
currently stable according to Porter’s five forces model.

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PESTLE ANALYSIS

PESTEL analysis is a strategic framework commonly used to evaluate the business

environment in which a firm operates. Traditionally, the framework was referred to as a PEST
analysis, which was an acronym for Political, Economic, Social, and Technological but in
more recent history, the framework was extended to include Environmental and Legal factors
as well. These are the external factors that affect the firm in various ways. Now we are going
to perform external analysis of Shinepukur Ceramics Ltd. through PESTEL analysis.

P - POLITICAL FACTOR

The first P in the PESTLE analysis stands for Political factor. The factors that affect the
environment are –

➢ Stability of Government
➢ Potential Changes to legislation
➢ Global Influence

The government and political stability are normal for the last 10 years, but the political stability
is not there. Because one of the most prominent faces of the firm Salman F Rahman actively
support the current ruling party and if a change in government happens the outcome for the
Shinepukur could be bad. The possibility of a change in legislation that could affect the
business of Shinepukur is relatively low. Global influence is also in a positive side.

E – ECONOMIC ENVIRONMENT

Second letter E stands for Economic factor’s external factors that affect the business of
Shinepukur Ceramics Limited. These are –

➢ Economic Growth
➢ Employment rates
➢ Monetary Policy
➢ Consumer confidence

As the current situation the inflation rate in relatively high and the production cost has increased
in every corner of the economy this environment is going to affect the business negatively.
Because of the bad economic condition people’s purchase power has also fall quite much. So,
buying a premium product like Ceramic tableware in this bad economic condition is quite low.

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S – SOCIAL FACTORS

Third letter of the PESTLE analysis is S which stands for social factors. These are -

➢ Income distribution
➢ Demographic influence
➢ Lifestyle factors

The social environment is quite biased to Shinepukur until now. Father figure run most of the
families in Bangladesh. To them Shinepukur is a well-known name, and they are quite biased
to this brand. But the lifestyle is changing rapidly. New generation’s liking to the ceramic table
is not clear yet.

T – TECHNOLOGICAL FACTORS

Fourth letter T stands for Technology which in these times are very much important. The
factors are –

➢ International influences
➢ Changes in information technology
➢ Take up rate

Shinepukur Ceramics limited is quite updated with the ceramic’s technology. Recently they
bought the latest technology for the production of Bone China tableware. The international
influence of this technological change is also important.

L – LEGAL FACTORS

The fifth letter in the PESTLE analysis is L which stands for Legal factors. Legal factors are
those that emerge from changes to the regulatory environment, which may affect the broader
economy, certain industries, or even individual businesses within a specific sector. These
include –

➢ Industry regulations
➢ Licenses and Permits required to operate
➢ Employment and consumer protection laws
➢ Protection of intellectual property law

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E – ENVIRONMENTAL FACTORS

Environmental factors emerged as a sensible addition to the original PEST framework as the
business community began to recognize that changes to our physical environment can present
material risks and opportunities for organizations. Examples of environmental considerations
are:

➢ Carbon Footprint
➢ Climate change impacts, including physical and transition risks
➢ Increased incidences of natural calamities
➢ Low supply of natural supplies (i.e., Water, Natural Gas)

*Combined, the above six factors can have a profound impact on risks and opportunities for
firms. It’s imperative that the analyst community recognize these and attempt to quantify them
in their financial models and risk assessment tools.

Some examples include:

• Financial analysts may adjust model assumptions such as revenue growth rates and
gross margins based on inflation expectations.
• A business that has done a poor job managing its carbon footprint may be subject to
future fines or carbon tax levies, so analysts may wish to project a cash reserve
accordingly.
• A changing macroeconomic environment may require analysts at credit rating agencies
to build in a higher interest rate buffer for sensitivity analysis when calculating a firm’s
debt service coverage ratio.
• Massive levels of automation in a particular industry are expected to reduce labor costs
by X% – which would materially change free cash flow estimates in a financial model.*

*Sourced from https://corporatefinanceinstitute.com/

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CHAPTER 2.3: BUSINESS MODEL & VALUE ADDITION
Shinepukur Ceramics is a member of the Largest Private Sector Conglomerate, BEXIMCO, in
Bangladesh. At present, it is involved with about 20,000 people in the permanent payroll,
handling a diversified range of merchandise to and from Bangladesh. Shinepukur Ceramics ltd.
was incorporated as a private limited company on January 26, 1997, with a view to establishing
world Class bone China and Porcelain Tableware Industrial Units. As part of a meticulously
planned expansion program of the Group, BEXIMCO has setup this state-of-the-art Ceramic
Tableware Plant, SHINEPUKUR CERAMICS LTD. (SCL) on the outskirts of Dhaka in 1999.
SCL is a 100% export-oriented unit, equipped with the latest and modern Machinery’s and
Kiln’s from TAKASAGO MINO, and SKK Japan and comprises of two independent units
producing high quality Porcelain and Bone China Tableware. The Porcelain unit has a capacity
of 30,000 pieces, whilst the capacity of the Bone China unit being 10,000 pieces a day. The
Bone China unit has in fact been set up on the basis of the latest technology from NIKKO
Japan, coupled with extensive training facilities to our Production team, both locally and
internationally. The Company is also an ISO 9001/2000 certified Company. Since
commencement of the commercial production at the end of 1999, Shinepukur has successfully
developed a substantial export market for the top-of-the-line Bone China and Porcelain
Tableware and the customer portfolio now includes world renowned Tableware companies in
the UK, USA, Spain, Italy, Australia, New Zealand, Norway Sweden, Russia, UAE, Denmark,
Germany, Turkey, and India. Exports from Shinepukur Ceramics comprise about 60% of the
National Tableware Export turnover of Bangladesh. As recognition of this contribution, SCL
was awarded the National Export Trophy (Gold) in December 2003 for the Financial Year
2000-2001. The Industrial units were established at the BEXIMCO Industrial Park, Gazipur
about 35km from Dhaka. The land and covered area of the industrial units are about 20 acres
and 350000sft respectively. They feel proud of their technical collaboration with NIKKO
Company, the master of Bone China maker in Japan and a Company of great international
reputation. As a result of this association, they have been able to break the technological barrier
and have become the pioneer in the field of Bone China manufacturing in Bangladesh. In the
past years, the Company has successfully maintained its market share in the top-end global
market of Bone China Tableware with strategic alliance with leading brand manufactures in
Europe and USA.

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VALUE ADDITION:
For expanding the business and holding the market, Shinepukur is creating new strategies. For
example, if we talk about the economic valuation, we will find that for FY 2020-’21, FY
2019-’20 and 2018-’19, the company added net value Taka 838.641 million (Taka 784.023
million in FY 2019-’20) to the national economy of our country.

In case of environmental initiative, the company distributed 1000 free saplings to their factory
employees and to the people of the surrounding areas. Also, factory open space is covered by
gardening and plantation. SCL is an eco-friendly company. No effluent or residual is being
discharge to open environment by & through SCL operational activities. At the end, the values
are either enhanced or may remain as it is. The state of six capitals as on 30th June 2021 were
as described below:

a) Financial Capital: at the beginning of the year shareholders fund was 4275.198 million taka
which was enhanced to4,502.261 million takas at the end of the year.

b) Manufacturing Capital: the value of the physical asset (gross) at the beginning of the year
was 7509.186 million taka which was enhanced to 7,511.009 million taka at the end of the year.

c) Intellectual Capital: There was no change in the key personnel of the company responsible
for operations and planning. Also, there is no change in the team responsible for critical works
including development of shapes and designs. As a result, the intellectual capitals remained
same during the year.

d) Human Capital: The strength of human capital increased to 2,964 at the end of the FY2020-
‘21 from 2,871 of previous year. SCL has reputation and brand value to retain the existing work
force and recruit new hands both at lateral and entry levels.

e) Social & Relation Capital: Though the CSR activities and welfare measures for the
employees social & relation capital of the company has been maintained during the year.

f) Natural Capital: The Company operated in such a manner that natural capital remained
unimpaired. For example, our factory did not produce any smog or dump wastages polluting
the surroundings and the open air. Also, use of underground water was rationalized by ensuring
use of water for multiple purpose (Example: rechanneling the used water for hand washing /
bathing for gardening purpose) and minimized by storing and using the rainwater.

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CHAPTER 2.4: SWOT ANALYSIS
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. It is mainly a strategic
planning and management system that helps to analyze the current situation of a company and
to devise a successful strategy for the future. It is also known as situational assessment or
situational analysis.

STRENGTHS:

As we all know, Shinepukur is one of the oldest and most successful ceramic industries of
Bangladesh. Now, let’s figure out some of the strong zones of this renowned company: A huge
number of people are directly or indirectly involved in this sector. Every year, the number of
employees is increasing. Thus, this field is playing a vital role in reducing unemployment.
Moreover, highly skilled laborers are available there. This whole scenario can be termed as
Labor intensive. Again, the products of Shinepukur are comparatively cheaper, available, and
long-lasting than any other ceramics. From the Saudi Royal family’s dining table to Royal
Parties that Putin arranges, Shinepukur has exported ceramics to various counties to uphold
Bangladesh’s name. This has created huge potential to access the global market approved by
GSP (Generalized System of Preference). This company has successfully upheld its brand
value. Being a ceramic industry, this firm is showing untapped potentiality in sanitary ware,
red-clay products and tiles.

WEAKNESS:

Apart from being one of the most successful companies, this firm has some weaknesses too.
Let’s describe some of the weaknesses of this company where they need to improve: A huge
amount of gas is required for burning the raw materials and making products. Due to inflation,
the price of gas is rising alarmingly. So, depending only on gas for making goods can reduce
their production and supply as well. As we all know, this company gets maximum profit by
exporting their goods. About 40% of their total earnings come from exporting products. Again,
their export is only confined to tableware. So, due to COVID-19 pandemic, their export income
got dropped and this reduced their net income. To survive in the long run, Shinepukur should
start producing top-end products coming out from capital intensiveness. Moreover, improving
the quality of raw materials, breaking out the technological barrier, innovation of unique
products and so on can play a significant role in becoming more successful.

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OPPORTUNITIES:

Shinepukur is more familiar to us for its household items like plates, mugs, trays, jugs and so
on. More or less, in each and every Bangladeshi family, one can find the goods of Shinepukur.
But still, this firm has to improve in some fields. Such as:

Shinepukur should expand their business by working in the tableware sector like tiles. They
are world widely famous for their ceramics. They have successfully launched their products in
each field except the tiles sector. This can be a great opportunity for them. They should shift to
qualitative products coming out from the domestic market. At present, they are successfully
surviving in the domestic market fulfilling the demands of the local consumers. It’s high time
for them to be more focused in drawing the attention of global markets. So, they need to be
more concerned regarding improving the quality of their products. There is a huge opportunity
for this firm for interposed-disposal income. They must work to develop new markets and be
recognized globally. This will help them in purchasing more foreign customers. There awaits
a large opportunity for Shinepukur in gaining domestic and international markets.

THREATS:

Till now, Shinepukur is lasting in the market with huge fame. But this firm is going to face
some threats as the competition is increasing higher and higher in both domestic and global
markets. Let’s see some of the threats that are waiting for it:

Firstly, imbalance in the rate of demand and supply. If we talk about the COVID pandemic
situation, that time their demand was lower compared to their supply. So, they must be more
cautious regarding the supply of products in comparison to the demand of the consumers.
Secondly, competition from other developing countries. The number of ceramics industries is
increasing largely around the whole globe. For example: mono ceramics industries, which are
creating obstacles in the growth of Shinepukur. Thirdly, balancing between price and quantity
of the products. We all know that the products of Shinepukur are cheaper in price in the
domestic markets. On one hand, this is beneficial for the mass people but on the other hand,
the company should be more cautious regarding the quality and quantity of their products.
Fourthly, lower purchasing for Bangladeshi customers. People of all classes can easily afford
the goods of Shinepukur. With the reduction of selling price, net income can be lessened.
Finally, geographical disadvantages. Bangladesh is an over-crowded place with sudden
seasonal changes. Thus, the geography is quite unsuitable for more production of products.

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CHAPTER 2.5: MANAGEMENT STRUCTURE

The management structure of the Shinepukur ceramics is well-managed. It is a publicly listed

company. Shinepukur Ceramics Limited (SCL) is a member of BEXIMCO Group which is the
Largest Private Sector Business Conglomerate in Bangladesh. There are 5 director and 1
independent director in the company. The chairman of this company is MR. A. S. F. Rahman
and Vice Chairman of this company is Salman F Rahman. These two brothers are leading and
well-known businessman in Bangladesh right now.
ASF Rahman is the Chairman of the companies under the flagship of BEXIMCO Group. He is
the member of Board of Trustee of North South University. He was Vice Chairman of IFIC
Bank Limited, Director of Investment Corporation of Bangladesh (ICB) and IPDC Finance
Limited. And Salman F Rahman is advisor to the Prime Minister of Bangladesh and a member
of the National Parliament. He is also the Chairman of IFIC Bank Limited. He was President
of FBCCIC. Currently, he is holding the rank of a cabinet minister and serving as the Private
Industry and Investment Adviser to Honorable Prime Minister Sheikh Hasina. He is quite well-
known for his presence in the Bangladeshi Stock market. He is also known as one of the main
culprits of the 2011 stock market crash.

There is total 2964 employees in the company. The Company is operating through a well-
defined management structure headed by a Chief Executive Officer (CEO) under whom there
are Executive Director (ED) and Managers for various departments and according to hierarchy,
various senior & mid-level management staffs. The Chief Executive Officer, ED and Managers
meet at regular interval represented also by Administration, Finance, Marketing & Production
heads.

Through this effective and well-managed management structure Shinepukur Ceramics Limited
has earned many national and international recognition, for them Shinepukur is a famous name
among Ceramic tableware lovers.

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CHAPTER 2.6: MARKETING MIX
Marketing mix refers to a set of actions that company uses to promote its brand or product so
it can be recognizable in a competitive market. The marketing mix is usually shown with 4 key
element knows as the 4P’s of Marketing mix. These 4P’s are Product, Price, Place and
Promotion.

Shinepukur works with Porcelain and Bone China made tableware and this is their main
product focus. Ceramic tableware is not a necessity but a premium tableware. Their pricing
strategy is Premium quality product with high margin but with less sales. Next in Place they
usually sell their product through Distributors and showcase the products in a showroom. They
also provide tableware in the Business class Airplanes and 5 star hotels in Bangladesh and
abroad. Finally, to promote their product they showcase their beautiful showrooms, does not
get involved in traditional promotion.

DISTRIBUTION STRATEGY:
A distribution channel is a set of interdependent organizations involved in the process of
making a product or service available for use or consumption by consumers or business users.
Shinepukur Ceramics Limited plans to widen the distribution channel by creating and
spreading marketing intermediaries throughout the country to improve the domestic market.
Shinepukur Ceramics Limited has set up more display and sales centres in Dhaka city. At the
same time, it has also set up sales centres in every greater district to cope with
the prospective market. Shinepukur Ceramics Limited is committed to employing a smart dist
ribution as the channel becomes most successful when each member is assigned the jobs it can
do the best.

PRODUCT & PRICING STRATEGY:

➢ In domestic and overseas markets Shinepukur Ceramics markets unique products. Its
Bone China brand is very much demandable in overseas markets and now it is
producing some other unique brands, i.e., Real Bone China and Fine Bone China.
➢ Shinepukur Ceramics emphasizes quality and nice-looking designs for launching
new products. Monno Ceramics considers quality and brand image. FARR Ceramic
mainly emphasizes quality. The shape is considered by Artisan Ceramics for launching
any new product.

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 ➢ All the companies excluding Shinepukur maintain quality by setting their standard and
TQM approach. Shinepukur Ceramics maintains quality through a third-party QC team
for getting the best quality products.
➢ If the delivered product (s) in the overseas markets is (are) broken or cannot match the
standard quality companies replace by new and quality products.
➢ Companies in the tableware ceramics industry launch new products invented by their
own research & development (R&D) department.
➢ Export-oriented companies in the tableware ceramics industry of Bangladesh follow a
master branding strategy. Shinepukur Ceramics also follow an endorsed branding
strategy.
➢ For setting the promotion budget, Monno ceramics follows the affordable method,
Shinepukur Ceramics follows the percentage-of-sales method, and Artisan and FARR
Ceramics follow affordable and percentage-of-sales methods.
➢ For promoting products internationally export-oriented companies use different
promotion mixes.

Shinepukur Ceramics and Artisan Ceramics use a mixture of advertising, sales promotion,
and public relation. Monno Ceramics uses advertising and sales promotion. FARR Ceramics
uses sales promotion tools mainly.

➢ To float information about products companies generally use newspapers, direct mail,
the internet, and magazines.
➢ Companies use some sales promotion tools also to promote the products. Artisan
Ceramics uses samples, point-of-purchase promotions, and premium. Monno Ceramics
uses sample and point-of-purchase promotions. Shinepukur Ceramics uses point-of-
purchase promotions, price packs, and premium. FARR Ceramics uses samples, price
packs, and premium.
➢ For public relation purpose companies mainly follow press agency and product
publicity strategies

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CHAPTER 2.7: FINANCING
Financing the way of sourcing money for a firm. Way to source this money varies. Mainly this
financing can be divided into 2 main sectors. Equity & Debt.

EQUITY

When a company sell a portion of their ownership to source money their money it is called
Equity financing. The benefit of equity financing to a business is that the money received
doesn't have to be repaid. On return of this financing, the individuals or the institutional
investors receives Capital gain or Revenue earnings ( Cash dividend or Stock dividend ). The
main way of Equity finance is mainly to sell Shares in the stock market. Others can be from
the entrepreneur’s friends and family, angle investors, venture capitalist etc. It is the external
way of equity financing. Using the Retained Earnings is called Internal equity financing.
Using of external equity financing caused the dilution of ownership but using the internal
equity financing does not. The most famous form of Equity finance is to sell share or stock. A
portion of ownership is transferred to the entity who bought the share or stock.

Shinepukur Ceramics being a limited public company they also sourced a part of their
financing by selling shares or stock. According to the data of dsebd.org they have 146,966,055
outstanding securities of which 50% is owned by the Directors of the firm, 8.34% is owned by
Institutional Investors and 41.66% is owned by public. Their base value per share is 10 taka.
While preparing this paper on 1st November 1, 2022, their price per share in the stock market
is 43 taka.

Share ownership

41.66%
50%

0%
8.34% 0%
Directors Government Institutional Investors Foreign Investor Public

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Their Equity portion include Shareholders Capital 1.469 billion, Revaluation surplus of PPE
2.97 billion, Fair value loss on investments 79.25 million, Retained earnings 13.35 million
total 4.50 billion BDT.

DEBT
According to Investopedia, Debt is something usually money, borrowed by one party from
another. Debt is used to purchase something that they could not afford now, which is to be paid
back according to the debt arrangements, usually with interest. Corporation use different kind
of Debt financing like formal loan from scheduled banks or NBFIs or issuing Bond, which is
a form of long-term debt security.

Shinepukur Ceramic didn’t issue any bond to source their money rather they took long-term
loans from Bank Asia (39 million BDT) and Phoenix Finance & Investment ltd. (119.26 million
BDT). Short term loans from Sonali Bank and New Dacca Industries ltd. Also, there are other
Creditors, Accruals and other payables like Interest due, TAX payable, Insurance payable etc.
The debt situation of Shinepukur is shown below with a pie chart for better understanding.
Long Term Liability
18% Total Liabilities

Short Term Liability Long Term Liability

Short Term Liability

82%

Unclaimed Dividend
Short term Liability
Creditors, Accruals 1% Short Term Loans from Bank
& Other Payables
33% Short Term Loans
Current Maturity of Long Term
from Bank
loan
50%
Creditors, Accruals & Other
Current Maturity of Payables
Long Term loan
16% Unclaimed Dividend

Long Term Liability

Deferred Tax
21%

Long Term Loans

Long Term Loans
42% Gratuity Payable
Gratuity Payable Deferred Tax
37%

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CHAPTER 2.8: ACCOUNTING METHODS
According to Accounting is a process of recording, summarizing, and reporting the myriad of
transactions resulting from business operations over a period of time. These transactions are
summarized in the preparation of financial statements, including the balance sheet, income
statement and cash flow statement, that record the company's operating performance over a
specified period. To standardize the accounting methods the whole world has come up with
IFRS (International Financial Reporting Standard) so people from different part of the world
can compare along industries easily and everyone can understand it equally. There are many
methods to do these accounting methods because in different industry many different measures
are required. According to the Audited Notes of Financial statements, the principal activity of
this firm operates in a single industry segment.

MEASUREMENT BASES

The financial statements have been prepared on the Historical cost basis except lands, buildings
& PPE which were re-stated at current cost and investment in shares of listed companies are
carried at fair value based on the period end quoted price of DSE. The statements have been
prepared in compliance with the requirements of the Companies Act 1994, the Securities and
Exchange rules 1987 and other relevant local and international laws. On disposal of fixed
assets, the cost and accumulated depreciation are eliminated and gain or loss on such disposal
is reflected in the statement of profit or loss and other comprehensive income, which is
determined with reference to the net book value of the assets and net sales proceeds.
Depreciation is provided on all fixed assets except Land & Land Development at the following
rates on reducing balance basis over the periods appropriate to the estimated useful lives of the
different types of assets. Investment in Shares of listed companies are carried in the statement
of financial position at fair value based on DSE quoted price at the period end. Inventories are
carried at the lower of cost and net realizable value as prescribed by IAS 2: Inventories. Cost
is determined on weighted average cost basis. Advances are initially measured at cost.
Financial liabilities are recognized initially on the transaction date at which the company
becomes a party to the contractual provisions of the liability. Interest Income is recognized on
accrual basis. EPS has been calculated in compliance with the requirements of IAS 33:
Earnings Per Share by dividing the basic earnings by the weighted average number of
ordinary shares outstanding during the year.

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CHAPTER 2.9: IMPORTANT RATIO ANALYSIS
According to Investopedia, Ratio analysis is a quantitative method of gaining insight into a
company's liquidity, operational efficiency, and profitability by studying its financial
statements such as the balance sheet and income statement. By looking at these ratios an
investor can choose if the company is well enough to Invest, a creditor can choose if giving
them money as loan will be fruitful. Ratio analysis can be divided into many parts but today
we will discuss about 4 kinds of ratios.

➢ Liquidity Ratios
➢ Solvency Ratios
➢ Efficiency Ratios
➢ Profitability Ratios

LIQUIDITY RATIOS
Liquidity ratio is used to determine if a company has enough liquid money to pay off its
creditors and mitigate its short-term obligations. Two most important Liquidity ratios are

❖ Current Ratio
❖ Quick / Acid Test Ratio

CURRENT RATIO

The current ratio is a liquidity ratio that measures a company’s ability to pay short-term
obligations or those due within one year. It tells investors and analysts how a company can
maximize the current assets on its balance sheet to satisfy its current debt and other payables.
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡𝑠
The formula to calculate Current ratio is =
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠

Current Ratio of the Shinepukur Ceramics Limited was –

Year 2021 2020

Current Assets 1,267,871,977 1,236,014,149

Current Liabilities 1,676,065,067 1,634,741,998

Current Ratio 0.7564 : 1 0.7560 : 1

The industry average was 1.33:1. So, we can say that Shinepukur does not have enough
liquidity compared to other company in the same industry.

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QUICK OR ACID TEST RATIO
Quick ratio also shows us the liquid level of a company but the quick ratio is more conservative
than the current ratio because it excludes inventory and other current assets, which are
generally more difficult to turn into cash. The quick ratio considers only assets that can be
converted to cash in a short period of time. The current ratio, on the other hand, considers
inventory and prepaid expense assets. The last two years Quick Ratio were -

Year 2021 2020

Quick Ratio 0.13 : 1 0.10 : 1

The Ceramic industries average of the Quick ratio was 0.22 : 1, Shinepukur is also lacking in
the Quick liquidity.

SOLVENCY RATIOS
According to Investopedia, A solvency ratio is a key metric used to measure an enterprise’s
ability to meet its long-term debt obligations and is used often by prospective business lenders.
A solvency ratio indicates whether a company’s cash flow is sufficient to meet its long-term
liabilities and thus is a measure of its financial health. Solvency ratios and liquidity ratios both
measure a company's financial health, but solvency ratios have a longer-term outlook than
liquidity ratios. Two most famous Solvency ratios are –

➢ Debt-to-Asset Ratio
➢ Debt-to-Equity Ratio

DEBT-TO-ASSET RATIO
The debt-to-assets ratio measures a company's total debt to its total assets. It measures a
company's leverage and indicates how much of the company is funded by debt versus assets,
and therefore, its ability to pay off its debt with its available assets. Here is the total Debt to
asset ration of Shinepukur Ceramics –

Year 2021 2020

Total Assets 6,557,016,861 6,416,098,012

Total Debt 2,054,756,163 2,140,899,715

Debt-to-Asset Ratio 0.313:1 0.333:1

The industry average was 0.33:1. So, the Debt to Asset ratio is satisfactory.

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DEBT-TO-EQUITY RATIO

According to Investopedia, Debt-to-equity (D/E) ratio is used to evaluate a company’s financial

leverage and is calculated by dividing a company’s total liabilities by its shareholder equity.
D/E ratio is an important metric in corporate finance. It is a measure of the degree to which a
company is financing its operations with debt rather than its own resources. To calculate this
ratio, we use the formula – Total Liabilities / Total Shareholders’ Equity.

Year 2021 2020

Total Liabilities 2,054,756,163 2,140,899,715

Total Shareholders’ Equity 4,502,260,698 4,275,198,297

Debt-to-Equity Ratio 0.46 : 1 0.50 : 1

The Industry average was 0.48 : 1. Satisfactory Debt-to-Equity ratio.

EFFICIENCY RATIO
By using efficiency ratios, we usually calculate the performance and efficient usage of assets
and liabilities internally. Two most famous Efficiency ratios are –

❖ Asset Turnover Ratio

❖ Inventory Turnover Ratio

ASSET TURNOVER RATIO

Asset turnover measures how efficient a company is in generating Sales in contrast to their
Assets. The higher the asset turnover ratio, the more efficient a company is at generating sales
from its assets. Conversely, if a company has a low asset turnover ratio, it indicates it is not
efficiently using its assets to generate sales. The formula is – Total Sales / Average Inventories

Year 2021 2020

Asset Turnover 1.59 1.34

Higher Asset Turnover ratio is preferred. The growth is visible in these 2 years.

INVENTORY TURNOVER

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Inventory turnover shows how many times a company turned over its inventory relative to its
cost of goods sold (COGS) in a given period. The inventory turnover ratio can help businesses
make better decisions on pricing, manufacturing, marketing, and purchasing. It measures how
effectively a company uses its assets. The formula is = Cost of Goods Sold / Average Inventory.

Year 2021 2020

Inventory Turnover 1.331 1.129

Higher inventory turnover is better. Satisfactory Inventory Turnover for the last 2 years.

PROFITABILITY RATIO

Profitability ratios are a class of financial metrics that are used to assess a business's ability to
generate earnings relative to its revenue, operating costs, balance sheet assets, or shareholders'
equity over time, using data from a specific point in time. Four most famous Profitability ratios
are –

➢ Gross Profit Margin

➢ Net Profit Margin
➢ Return on Assets
➢ Return on Equity

GROSS PROFIT MARGIN

Gross profit margin is a metric analysts use to assess a company's financial health by
calculating the amount of money left over from product sales after subtracting the cost of goods
sold (COGS). Sometimes referred to as the gross margin ratio, gross profit margin is frequently
expressed as a percentage of sales. The formula of gross profit margin is Gross profit / Net
Sales.

Year 2021 2020

Gross Profit Margin 16.30% 19.85%

The industry average is 18.30%. So, the margin is satisfactory.

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NET PROFIT MARGIN
Net profit margin is calculated by dividing the net profits by net sales, or by dividing the net
income by revenue realized over a given time period. In the context of profit margin
calculations, net profit and net income are used interchangeably. Similarly, sales and revenue
are used interchangeably. Net profit is determined by subtracting all the associated expenses,
including costs towards raw material, labor, operations, rentals, interest payments, and taxes,
from the total revenue generated.

Year 2021 2020

Net Profit Margin 3.33% 0.66%

The industry average was 1.49%. Satisfactory margin in the last year.

RETURN ON ASSET
The term return on assets (ROA) refers to a financial ratio that indicates how profitable a
company is in relation to its total assets. Analysts, and investors use ROA to determine how
efficiently a company uses its assets to generate a profit. It's always best to compare the ROA
of companies within the same industry because they'll share the same asset base. ROA factors
in a company's debt while return on equity does not. Formula is ROA = Net Income/ Total
Assets

RETURN ON EQUITY
Return on equity (ROE) is a measure of financial performance calculated by dividing net
income by shareholders' equity. Because shareholders' equity is equal to a company’s assets
minus its debt, ROE is considered the return on net assets. ROE is considered a gauge of a
corporation's profitability and how efficient it is in generating profits. The higher the ROE,
the more efficient a company's management is at generating income and growth from
its equity financing. The formula is ROE = Net Income/ Avg. shareholders equity.

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CHAPTER 2.10: ETHICS & SOCIAL AND ENVIRONMENT
CONSCIOUSNESS WHILE DOING BUSINESS

Business ethics studies appropriate business policies and practices regarding potentially
controversial subjects, including corporate governance, insider trading, bribery, discrimination,
corporate social responsibility, fiduciary responsibilities, and much more. The law often guides
business ethics, but at other times business ethics provide a basic guideline that businesses can
follow to gain public approval. Shinepukur Ceramics has also their own ethics.

Ceramics Tableware is now-a-days a common household items at home and abroad which no
longer belongs to the high-income group only, it is even commonly used in the street corner
small hotels and restaurants. The demand of the ceramic’s tableware is increasing day by day
due to the change in the lifestyle of the people.

Shinepukur Ceramics Limited (SCL) is pioneer in bone China technology in Bangladesh. It

offers an exquisite range of the finest, world-class tableware in bone China, new bone China
and porcelain. Shinepukur culminates all its knowledge, skills, efforts, and traditions in
superbly crafted tableware demanded by discerning customers. Incorporated on January 26th,
1997, Shinepukur is set on 115,00 square meters of land at the Beximco Industrial Park at
Gazipur, about 35 kilometers north of Dhaka. The plant was commissioned on December 9,
1999.

Superior technology blended with Japanese elegance. Shinepukur is heralding high-tech

tableware manufacturing in the sub-continent. Shinepukur introduces bone China tableware in
collaboration with NIKKO, the master of bone China in Japan. Its association with NIKKO has
resulted in the company achieving the leading position in superior technology. NIKKO
technology, developed through research and tradition since the beginning of the 20th century,
has been integrated into the entire operational mainframe of Shinepukur.

Shinepukur tableware is designed to be an affordable luxury. From dinner plates to salt and
pepper pots, it offers a complete range of product groups in a variety of shapes, decoration, and
patterns. The unique and beautiful tableware from Shinepukur introduces a new trend in fine
dining. Customers are at liberty to choose from full range dinner set, place setting, starter set,
tea set, coffee set, soup set etc. serving and desired number of persons.

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CHAPTER 3: CONCLUSION

Shinepukur Ceramics Limited, being the country’s leader in Ceramic tableware

industry is in a pretty good position from the perspective of local market also in
international market. But as people tend to eat fast food more than the homecooked
food, the need for family-oriented ceramics tableware is going to decrease. In this
scenario they should undoubtedly expand their business in the Tiles and Toilet ware
sector. We have a huge population, and a booming economy people will try to build
houses thus buy more tiles and toilet ware. Expending to toilet ware and home ceramic
they will have to chance to reach more home in Bangladesh and a new form of income
strategy.

Analyzing the Financial statements, we saw a positive situation in the Solvency and
Profitability level. But in the Liquidity level it is not satisfactory. They need more Cash
or Cash equivalent so they don’t run into any debt obligation that they cannot mitigate.
The Efficiency ratio is in an average position.

If the government puts Ceramic sector into consideration, it can generate a lot of foreign
currency because there are a lot of demand for it. From the Saudi Royal family's dining
table to Royal Parties that Putin arranges, Shinepukur has exported ceramics to various
counties to uphold Bangladesh's name.

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CHAPTER 4: REFERENCE

❖ Shinepukur Ceramic’s Website

https://www.shinepukur.com/

❖ Shinepukur Ceramic’s Annual Report

2020 – 2021

❖ Investopedia

https://www.investopedia.com/

❖ Dhaka Stock Exchange

https://www.dsebd.org

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