CERAMIC industry of Bangladesh is a booming sector and the growth potential of both domestic and foreign market indicates it may become one of the big foreign currency earners for the country. Now it’s time to measure and analyze the performance of this industry. But such kind of analysis has not been done on this ceramic sector before. So, in this gap of analysis we have tried to evaluate and interpret the performance of the selected four ceramic companies for the period of 2011-12 to 2012-2013.
Performance evaluation of a company is usually related to how well a company can use it assets, share holder equity and liability, revenue and expenses. Financial ratio analysis is one of the best tools of performance evaluation of any company. In order to determine the financial position of the ceramic company’s and to make a judgment of how well the ceramic company’s efficiency, its operation and management and how well the company has been able to utilize its assets and earn profit. We used ratio analysis for easy measurement of liquidity position, asset management condition, profitability and market value and debt coverage situation of the ceramic company’s for performance evaluation. It analyzes the use of a company’s assets and control of its expenses.
It determines the greater the coverage of liquid assets to short-term liabilities and it also compute ability to pay ceramic companies short-term and tong-term payments obligation from the cash generate. It determines share market condition of ceramic companies.
Financial distress is a condition when a company cannot meet, or has difficulty to pay off, its financial obligation to its creditors. The chance of financial distress increases when a firm has high fixed costs, liquid assets, or revenues that are sensitive to economic downturns. Sometimes financial distress can lead to