Relationship Between Income and Profitability: Mining & Manufacturing

This professional project investigates the relationship between total income and profitability in the mining and manufacturing industries in Australia, examining data from 2006 to the present. The research explores the performance of these sectors, considering both mining and manufacturing as key contributors to the Australian economy. It addresses questions about the impact of mining on manufacturing profitability and analyzes trends in income and operating profits before taxation. The project utilizes secondary data from the Australian Bureau of Statistics to identify the factors behind economic changes, employing statistical methods like regression and correlation to determine the interrelation between total income (independent variable) and profit before tax (dependent variable). The literature review covers financial ratios, industry performance, and the impact of exports, inflation, and global challenges, including environmental concerns. The study also explores strategies for cost reduction and methods for improving industry performance and economic growth, offering recommendations based on the findings.

Running head: INCOME AND PROFITABILITY IN MINING AND MANUFACTURING
INDUSTRY 1
SUBJECT: Professional Project
TOPIC: Relationship between the total Income and Profitability in Mining and Manufacturing
Industry
CODE:
STUDENT NAME:
STUDENT NUMBER:
ASSESSMENT:
CAMPUS:

INCOME AND PROFITABILITY IN MINING AND MANUFACTURING INDUSTRY 2
Table of Contents
CHAPTER ONE.............................................................................................................................3
INTRODUCTION......................................................................................................................3
1.1 Introduction..........................................................................................................................3
1.2 Background of the study......................................................................................................5
1.3 Aim of the research..............................................................................................................5
1.4 Objectives..............................................................................................................................5
1.4.1 Research questions..........................................................................................................6
CHAPTER TWO.............................................................................................................................6
LITERATURE REVIEW..........................................................................................................6
ODOLOGY.................................................................................................................................9
3.0 Introduction..........................................................................................................................9
3.1 Data collection....................................................................................................................10
3.2 Data Analysis......................................................................................................................10
CHAPTER FOUR.........................................................................................................................11
FINDINGS................................................................................................................................11
4.1 Income and profitability relationship..............................................................................11
4.2 The performance of the industries regarding income and profitability has been
characterized by a lot of industries........................................................................................13
4.2.1 Mining industry...............................................................................................................13
CHAPTER FIVE..........................................................................................................................14
DISCUSSION AND CONCLUSION.....................................................................................14
Limitations of the study...........................................................................................................15
Conclusions...............................................................................................................................15
References.....................................................................................................................................16
APPENDIXES..............................................................................................................................18
Appendix one: a diagram showing starting cost base breakdown.....................................19

INCOME AND PROFITABILITY IN MINING AND MANUFACTURING INDUSTRY 3
Appendix three: a diagram showing The trend of performance among the mining and
manufacturing industries........................................................................................................19
Appendix four: The graph below shows the performance of the mining industries regarding
pricing........................................................................................................................................20

INCOME AND PROFITABILITY IN MINING AND MANUFACTURING INDUSTRY 4
CHAPTER ONE
INTRODUCTION
1.1 Introduction
The main aim of this research was to explore the relationship between the total income
and profitability in the mining and manufacturing industry. The research also looked into the
trend of both the income and profitability within the recent years. That is from 2006 and the
successive years. The study mainly looks at the performance of the industries with respect to
mining and manufacturing industry. Mining and manufacturing being an economic activity, it is
one of the contributors to the economy of the Australia. The research ask a number of questions
concerning the total income and profitability within the economics of the country. One of the
questions asked was whether the mining affects the economic and profitability from one
manufacturing industry to another. It was observed that the sectors; that is both the mining and
the manufacturing have recorded a tremendous changes within the economic growth of the
Australia. The research is trying to look into details the reasons behind all these.
The secondary data from the statistical government sources tried to look at the causes of
the following changes. The study from the secondary sources will start from the year 2006 and
will entails the reasons behind the tremendous changes observed within the two sectors of the
economic growth. All the total income and the operating profits will be analyzed before the
taxation is done. As mentioned above mining and manufacturing become key pillars in the
economic development and the stability of the Australian government. There are different
minerals being mined Australia. A number of these has opened up the market system in Australia
and this has contributed a lot to the economic growth Australia. The data will be collected from

INCOME AND PROFITABILITY IN MINING AND MANUFACTURING INDUSTRY 5
the Australia Bureau of Statistics website which contain the information for both the industries
since 2006 up to the current year.
The research has both the independent and dependent variables as part of the elements in
the research. The total income is used as the independent variable for the study while income
profit before tax is the dependent variable of the research. For this case the profit before tax is
the result of the total income of production for this study. The interrelation between the total
income and the profit before tax will be determined by the use of the procedural statistical
procedure. Proper analysis will be done with the help of the available resources for the
qualitative study. The regression and the correlation are among the methods that will be used to
study the relationship between the independent and dependent variables of the study. This study
being very significant for the growth of the Australian government interns of economic study,
the proper background of the study is very essential and its conceptual framework. Through the
study of the conceptual framework and the background study, the research would explore more
of the related information and other useful information which would be essential.
The study of the literature and the existing sources of information will be of use to the
research to close and analyses the gap of the study. Mining and manufacturing are considered
again as an economic pillar to its citizen. The sectors employ some people either through direct
or indirect employment. The research will analyze the trend of the economic growth from the
individual industries. The study will analyze the companies that have had the upward and the
ones that have had the downward growth. The study will be based on the two sectors that are the
mining and the manufacturing sectors. The study was beneficial with some recommendations
from the findings. The performance of different industries from 2006 is a clear indication that
both the mining and manufacturing sectors are used for the economic growth.

INCOME AND PROFITABILITY IN MINING AND MANUFACTURING INDUSTRY 6
1.2 Background of the study.
Mining and manufacturing are the key players in the economic development of a given
nation such as Australia. The researcher is a student who takes accounting as a course of study in
the University. The main aim of his explore the relationship between the income and the
profitability from both the mining and manufacturing industries within the Australia.The
research was based on the individual industries and their performance regarding the income and
profitability. With the deeper regression and correlation analysis, the trend and performance of
the individual industries was investigated. Through the study, the Australian government was
able to gauge itself on the side of its economic growth from the sector of mining and
manufacturing. The study was also motivated by the fact that mining and manufacturing become
the key players in the sector of the employment demand. This has created the real living among
the individuals.
1.3 Aim of the research
The main aim of the research was to find the relationship between the total income and
the profitability of the industries from both the mining and manufacturing sectors. The detailed
analysis of the findings was able to help the researcher achieved the aim of the research. The
research was also looking at which industry regarding profitability has been going up or doing
for the last years five recent years. This was to be done regarding the economic and profit growth
of the industries.

INCOME AND PROFITABILITY IN MINING AND MANUFACTURING INDUSTRY 7
1.4 Objectives
The objective of the result was to find the find the link between the independent and
dependent variable in the economic development of the Australian government.
1.4.1 Research questions
 How does the total income from the mining and manufacturing industries
relate to the profitability before the tax?
 What is the trend of the performance of the mining and manufacturing
industries since 2006 within Australia?
 What is the total amount of the income compared to the profit within the
given mining and manufacturing industries?
CHAPTER TWO
LITERATURE REVIEW
The economic growth is significant for the income and profitability of a given nation.
The performance of every nation is determined by the income of a given nation. The strategic
plan of a given country like Australia is always determined and projected by the profitability of
the given industry. The income and the profitability of a given industry are always used to
determine the performance of the industry. The financial ratios are regarded as the useful tools in
determining the performance of the performance of an industry (O’Callaghan & Graetz, 2017).
This performance determines whether there is a drop or improvement in and industry. In any
busy business like mining and manufacturing industries, the financial ratios include the
following: return on sales, return on assets and the return on equity (Walliman, 2011). Return on

INCOME AND PROFITABILITY IN MINING AND MANUFACTURING INDUSTRY 8
equity is the popular measure of income and the calculated profit margin X asset turnover X
from the financial leverage.
As per this formula, an increase in the financial advantage can result in an increase in the
income of the organization for a given year. However, at the same time, it can also increase the
fixed costs of the company and thus, add volatility to the earning (Chen & Mintz, 2010). The
calculation is very crucial for the performance of an industry. The profit margin helps a company
to measure its strength and the usage of the investment capital. A company with greater net profit
margin is taken to be stable regarding the sustainability (Hosseinzadeh, Smyth, Valadkhani &
Moradi, 2018). These tools can also be used to compare the performance of the given industries
(Yong, 2015). This can range from one company to the other. The Australian country can use
this tool in determining her performance in the sector of mining and manufacturing. In a given
industry net profit does not indicate the actual cash flows because it involves certain non-cash
expenses such as depreciation, amortization, and accrued liabilities (Richardson & Denniss,
2011).
In Australia, the mining and manufacturing industries have entered into another phase
regarding the export. This has opened up the economic growth for the nation. This economic
activity has put the Australian government in a production phase (Fleming & Measham, 2015).
The country has been benefited through exportation in the past years. An increase in export and
financial income has been realized from the mining and manufacturing processes.
However, the sector is in a declining mode. Again their profits can fall short unless the
organizations reorganized their cost structures according to their projected capabilities (Han Onn,
& Woodley, 2014). Between 2006 and 2015, the rise is seen in both the volumes and prices with
19% and 10% annual growth respectively (Chen & Mintz, 2010). The industry has been

INCOME AND PROFITABILITY IN MINING AND MANUFACTURING INDUSTRY 9
benefiting from the rising in output but not by the profit growth, as it was only marginal because
of falling prices. Coal prices were dropped by 45% while iron ore prices fell by 40% in the year
2015 (Reserve Bank of Australia, 2009).
The industries are much affected by the rate of the inflation. The proper care should
always be taken to ensure that both the income and profitability are not affected by the currently
ongoing issues (Cottarelli, 2012). The system had also contributed much to the emission of the
green gases. Carbon dioxide and other green gases are an example of the gases that are emitted
by these industries. Thorough caution should always be looked into to meet the international
standards (Donovan & Hartley, 2016). Despite the income generated by the industries, the
country also faces the challenges related to the mining and manufacturing processes (Connolly &
Orsmond, 2011). By considering this situation, mining and. Manufacturing industries need
proper care and on strategies and learn and to deal with the situation by increasing production
costs and falling output prices of the companies (Connolly & Orsmond, 2011). Companies which
uses the conventional approach sometimes may make the investments profitable and new
sustainable approaches which are required to be explored (Connolly & Orsmond, 2011).

INCOME AND PROFITABILITY IN MINING AND MANUFACTURING INDUSTRY
10
To strengthen the mining department, the industries should device better methods to
achieve its objectives (Prepare for Australia, 2017). The analysis and the correlation should
always be done to understand the trend in the performance. Mining is considered as one of the
core contributors to the economic growth and the employment opportunities. The Australian
government must always be able to boost the department (Kryger, 2014). Cost-effective methods
of mining should be used to reduce the production cost. The globalization is one of the strategies
that can strengthen the department (Stefan, Sonja & Kieren, 2011).). This will open up the
market and also increases the value of the export.
There are proposed ways and opportunities that can be used in reducing costs of the
mining sector (Prepare for Australia, 2017). These include the following rationalization of
project portfolio, consolidation of overhead structures, rationalization of product grades,
optimization of shift structures, improvement of maintenance processes, exit from specific
minerals that may not be profitable enough, use of different mining methods such as
underground exploration, employment of remote mine operators among others (Hollander, et al.,
2018).

INCOME AND PROFITABILITY IN MINING AND MANUFACTURING INDUSTRY
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The manufacturing sector of Australia has also lost its strengths as the output production
has been in the lowering mode. There is the existence of a wide gap between the pricing and the
pressure that experience on the profit margins. This calls for a reduction in operating costs and
other expenses on the investments which help to preserve the margin profit (Scutt, 2018).
CHAPTER THREE
RESEARCH DESIGN AND METHODOLOGY
3.0 Introduction
This chapter contains the sources of data collection and the data analysis methods
3.1 Data collection
The aim of the research was to study the relationship between the income and
profitability from both the mining and manufacturing industries within Australia.Therefore the
research is more of descriptive and mostly uses the quantitative technique approach.The data was
collected from the secondary sources. Examples of these sources include : the Australian
Bureau of statistic website which contained the information from the year 2006 onwards . The
information obtained involved both the income and profitability of both the two industries of
study. The data collected from the manufacturing industries included the goods and services
offered; and also the performance regarding the goods sold, raw materials compared to the
expenses which included the labor and purchase of the raw materials. The information also
contained both the industrial and consumer products. The mining industry data included the data
for industry groups like coal mining, oil and gas extraction, iron core mining, gold ore mining,

INCOME AND PROFITABILITY IN MINING AND MANUFACTURING INDUSTRY
12
copper ore mining, mineral sand mining, silver ore mining, other metal ore mining, and
exploration of support services (Thornton, 2015). The data was beneficial for the study in the
whole research.The information obtained from the sources contained the descriptive data
expressed in graphical forms.
3.2 Data Analysis
The quantitative research which requires the data on income and profits ,needs to be
analysed by quantitative methods such as statistical methods.Through correlation and regression,
the income from the sales and the profit margin was compared and detailed solution given. The
analyzed data were obtained from 2006 onwards through the correlation; comparison was made
to show the pattern between the income and the profit margin after tax for both the mining and
manufacturing industries within Australia (Greener, 2008). This analysis was done every year
from each of the given sectors. A proper conclusion was drawn based on the analysis data
obtained from the website.
The practical operation of the industry is fundamental. The net profit margin of an
organization is the profit a company receives after deducting all the expenses and tax from the
income (Greener, 2008). This is one of the tools that a company can use to gauge its strength
regarding economic development. Through the correlation and regression, this tool is well
analyzed within a given company.