Background and Aim of the Study

1.

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 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.

Data Collection and Analysis

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.

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.

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.

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.

• 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?

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 equity is the popular measure of income and the calculated profit margin X asset turnover X from the financial leverage.

Variables

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 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).

Performance of Mining and Manufacturing Industry

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).

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).

3.

Introduction

This chapter contains the sources of data collection and the data analysis methods

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, 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.

Financial Ratios and Performance 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.

4.

graphical analysis for Income and profitability relationship

The total income of an industry is considered as the income received from the sales and other services. The deductions and other expenses are what is used as part of the total income. The revenue and profitability of a country is the measure of the economic growth of an industry in a given nation (Kryger, 2014). The expenses must always be deducted to arrive at the net profit of the given company. From the thorough analysis, the performance of the mining industries has been determined by the trend of the income and the profitability. The difference in the income and profitability sometimes widen (Prepare for Australia, 2017). From a couple of years, the trend has been in a decline mode due to the following reasons. The change in inflation, global warming, and other environmental changes (Deloitte, 2016). From the journals and other resources, this trend has been observed for the successive four years from 2006 onwards. The research has also shown that there was an increase in the income. This was due to the number of approaches proposed to the industries. Due to the inflation, the company sometimes run at a lost. The company was therefore forced to increase its production cost to cater for the loss incurred (Richardson & Denniss, 2011).

However, the manufacturing industries have experienced a decline in both the income and profitability.  The Australian manufacturing sector has been under a decline for the past few years because of the reduction in contribution to the GDP (Stanford, 2016). This is due to a decrease in output from the total production. The graph below shows the declining trend regarding the manufacturing of the GDP products. The trend has been observed in a declining mode over the years in Australia (Deloitte, 2016).

Export and Financial Income Growth

Figure 1: Manufacturing industry’s share of GDP (Clark et al., 2000)

Profitability was then obtained from the gross operating profit margin before the deduction was done. Some certain percentage of total income is generated from the sale of goods and services within the industry.

There has been a reduction in the gross profit margin from 9.55 in 2001 to 7.8 in 2014 from the manufacturing sector (Clark et al., 2000). However, other business sectors have the increase in the profit margin. As the graph shows, the industries put together, there is an increase in the gross profit margin increased from 10.9 to 12.7% during the same time (Kryger, 2014).

The graph below shows the percentage growth against the given mining and the manufacturing industries within Australia.

The trend of performance among the mining and manufacturing industries

Mining industry

The graph below shows the performance of the mining industries regarding pricing.

The graph also shows the industry transitions into production. At the beginning of 2015, the economy was faced with a boom in investment which later reduced in the year 2016 as shown above (Thornton, 2015). The year 2016 dominated the service sector which gave the highest share of the output. However, in the mining sector, the number of exports were increasing mode. At the same time, there was a tremendous fall in the Australian dollar. The performance of the industries has a contribution to the Australian economic GPD and the global market. The decrease in the total income of the country results in unemployment. This later causes the inflation within the nation.

5.

This chapter tries to compare the findings with the literature review .

The main aim of the research was to explore the relationship between the total income and the profitability after the tax. From the findings of the study, it is proved that both the sectors experience the ties regarding economic development. For example, if there is an increase in total income, this creates a positive growth in the profitability (Mikesell & Whitney, 2017). Income is defined as the total sales received from both the industrial and domestic goods. The increase in the amount of export also increases the profitability of industries. The graphs above show the relationship and the trend of the economic growth that has taken place for the given years. The reduction in the total income and the exports make a country to undergo the inflation (Dwyer, Pham, Jago, Bailey & Marshall, 2016). It also affects the Australian dollar and international market performance.

Challenges and Strategies for Mining and Manufacturing Industry

Mining and manufacturing industries have been considered as the critical sectors of employment in Australian government. Any elite decline in the performance causes the unfavorable balance of payment (O’faircheallaigh, 2017). The poor performance of the industrial and manufacturing sectors forces the Australian government to pay its workers out of the intended budget.

These findings consist of the previous researchers.

Firstly it is important to appreciate some of the limitations of this study. The study has some constraints which hinder it from achieving the full objective of the study. The source of data was not enough to cater for the current changes that have taken place within the industries. Online website was the source of secondary data. This could not provide information for the physical changes happening within the industry. Secondly, the research did not have any sample size for the study; the study was purely based on literature and online sources. Due to this reason, the in-depth and exploratory interview was lacking. Lastly, the study area covered a wider area. The study was based on the mining and manufacturing industries within Australia; this was a wider area of research.

The recommendations for this study is addressed to investors ,professionals and the stakeholders in various industries .From the study it is evident that there is a direct link between the income to the profitability of the industries.For this reason ,the investors should put in more effort in the mining and manufacturing industries so that much income may be realised.Much income means more profit and hence economic growth for the country.This also creates self employment to the citizens .The companies should always ensure that the raw materials used are the ones which can help them maximize sales and profit.

Conclusions

The total income and profitability of Australian nation depend on each other. They correlate ,for example an increase in income implies an increase in profit . The performance of both mining and manufacturing industries are both affected by the change in the country’s economic growth. Finally, the profitability after the tax depends directly on the total income when all the deductions and expenses have been subtracted.

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