The document summarizes Coogee's financial performance and competitive advantages prior to a joint venture in 1986. Coogee had strong revenue and profit growth, high return on equity, and a near monopoly in some product lines. However, it relied heavily on CSBP for supplies and had cash flow issues. Coogee's success was due to lower costs from its location near ports and suppliers, an integrated business model with production, storage and transport, and a reputation for reliably supplying niche chemical products. However, most of its advantages were easy for competitors to copy.

13. Student'Number:'167665'
Question)1)
!
Scope'of'analysis:'before'the'joint'venture.'Year'1986.'
Summary!
Coogee'is'a'successful'company.'Coogee'financial'performance'is'very'strong'in'terms'of'ROE'
(Exhibit'Financials:'Coogee'+36.82%'compared'to'industry'at'+10.3%)'and'growth'(Exhibit'Growth:'
revenue'and'profit'grows'steadily'at'an'average'rate'of'45%'and'36%'respectively'in'the'past'10'
years,'in'comparison'with'industry'growth'at'S0.9%'S'Exhibit'3.3).'With'regards'to'
revenue/employee,'they'are'performing'very'strongly'as'well'(Exhibit'3.1:'Coogee'
Revenue/Employee'is'$300k'in'comparison'with'WA'$108.32k'and'Australia'$103.33k).'Coogee'
profitability'however'is'weak'in'comparison'with'the'whole'industry.'(Exhibit'3.1:'Coogee’s'
Profit/Employee'is'only'$9k'in'comparison'with'WA'$24.72k'and'Australia'$32.51k).'Coogee'has'a'
very'strong'market'share'(almost'near'monopoly'across'their'product'lines).'The'other'concerns'are'
their'dependability'with'CSBP'and'also'their'lack'of'cash'flow.'
ROE!
Coogee'ROE'without'gearing'is'19.43%'in'1986.'With'59%'gearing,'the'ROE'is'higher'at'36.82%.'This'
is'higher'than'industry'average'of'10.3%.'The'10'year'profit'growth'average'is'36%.''
Revenue!
In'1986,'Coogee’s'revenue'was'$15m.'In'comparison'with'medium'and'small'company’s'revenue,'
Coogee’s'revenue'is'smaller'than'the'average.'(Exhibit'3.2:'Average'medium'and'small'turnover'
$22.3m'vs.'Coogee'$15m).'However,'in'comparison'with'other'industrial'chemical'in'WA,'Coogee’s'
revenue'is'about'five'times'than'the'average.'(Exhibit'3.2:'other'industrial'chemical'turnover'$3.33m'
vs.'Coogee'$15m).'Coogee'revenue'grows'steadily'at'an'average'rate'of'45%'in'the'past'10'years.'
(Exhibit'Growth:'from'$920k'in'1976'to'$15m'in'1986).'This'is'higher'than'the'industry'growth'rate'
of'only'S0.9%.'(Exhibit'3.3:'average'industry'growth'from'1979'to'1984'is'S0.9%).'Revenue/employee'
is'very'strong'comparing'with'WA'and'Australia.'(Exhibit'3.1:'Coogee'Revenue/Employee'is'$300k'in'
comparison'with'WA'$108.32k'and'Australia'$103.33k).'
Market!Share!
Coogee'market'share'is'very'high'in'almost'all'of'their'product'lines,'in'fact'in'some'product'line'they'
have'near'monopoly.'(Exhibit'Market'Share:'Copper'Sulphate'+70%,'Ferrous'Sulphate'100%,'Sodium'
Silicate'100%'in'WA,'Aluminium'Sulphate'–'sole'distributor'to'WA'Water'Authority,'Molasses'
import/export'100%.)''
Other!financial!drivers!
Coogee'also'does'not'have'any'gearing'at'this'stage.'They'also'have'cash'difficulty'reflected'by'the'
seasonality'of'the'agriculture'industry.'They'have'to'dip'into'overdraft'account'between'October'
and'January.'This'can'be'a'problem'in'the'future'if'they'are'taking'debt'as'insufficient'cash'flow'can'

14. Student'Number:'167665'
cause'a'default'on'their'debt.'With'59%'gearing,'they'will'have'an'interest'efficiency'of'0.7'and'
leverage'of'2.44.''
'
Question)2)
'
Across'the'product'lines,'Coogee'derived'most'of'the'profit'from'Copper'Sulphate'and'the'Tank'
terminal'&'Transport'operations.'(Exhibit'3.6:'Copper'Sulphate'+55%'and'Tank'terminal'and'
transport'operation'+30%).'Even'though'Copper'Sulphate'is'deriving'most'of'their'profit,'however,'
they'are'heavily'reliant'on'CSBP'for'their'supply'of'Sulphuric'Acid'(CSBP'is'the'only'producer'in'
Australia).'A'diversification'is'needed'for'Coogee'to'reduce'the'risk.'
'
'
'
Product $ Profit (1988)
Copper sulphate 246,575.34$
Ferrous sulphate -$
Monohydrate -$
Heptahydrate 18,493.15$
Sodium silicate 36,986.30$
Aluminium sulphate -$
12,328.77$
Chlor-alkali -$
Chlorine -$
Caustic soda 49,315.07$
Sodium cyanide 117,123.29$
Tank terminal and -$
transport operations 135,616.44$
616,438.36$

15. Student'Number:'167665'
'
'
Analysing'the'Profit'Margin/tonne,'the'copper'sulphate'derived'most'of'the'profit.'
'
'
Analysing'further'into'each'of'the'customer'for'Copper'Sulphate,'they'are'selling'highest'to'the'
mining'companies'in'the'eastern'state.'The'price'in'eastern'state'is'cheaper'could'be'because'of'the'
competition'with'Sydney'producer.'They'are'selling'lowest'to'CSBP.'It'could'be'that'they'have'an'
agreement'with'CSBP'as'they'are'also'the'provider'of'chemicals.''
Analysing'the'trend'of'the'demand'of'Copper'Sulphate,'the'trend'seemed'to'be'going'up.'(Exhibit'
3.8).'
'
Product $ Profit Margin (tonne)
Copper sulphate 30.82$
Ferrous sulphate
Monohydrate
Heptahydrate 26.42$
Sodium silicate 10.57$
Aluminium sulphate
30.82$
Chlor-alkali
Chlorine
Caustic soda 2.74$
Sodium cyanide 5.86$
Tank terminal and
transport operations
Buyers Volume (tonnes) Turnover ($000) Profit (%) Profit Unit Price (tonne)
CSBP 2,400 2,000 10% 348,972.60$ 833.33$
Mining companies 0% -$
WA 600 1,000 17% 587,243.15$ 1,666.67$
Eastern states 4,000 5,000 64% 2,248,287.67$ 1,250.00$
Timber treatment companies 500 500 4% 156,035.96$ 1,000.00$
Stockfeed companies 500 500 4% 156,035.96$ 1,000.00$

16. Student'Number:'167665'
'
Question)3)
'
Coogee’s'success'is'derived'from'the'following'value'propositions:'(See'the'cognitive'map'in'the'
exhibit'for'more'details'of'the'linkage)'
1. Lower!cost!and!price!
Coogee'exploits'the'advantages'and'disadvantages'of'the'industry.'They'are'strategically'
located'to'the'port'and'CSBP.'They'also'have'an'end'to'end'solution:'transport'and'storage'
of'chemicals'which'means'more'control'of'their'businesses'and'able'to'generate'lower'costs.'
In'addition,'they'only'produced'simple'chemicals.'That'means'that'they'can'use'second'hand'
equipment'to'lower'the'cost.'They'are'also'able'to'utilize'their'machineries'more'by'
rearranging'some'of'the'processes'to'achieve'the'same'effect.'
2. Proximity!of!location!
'S''''
'100''
'200''
'300''
'400''
'500''
'600''
'700''
'800''
1979' 1980' 1981' 1982' 1983' 1984' 1985'
FerBliser!turnover!(Per!1,000!tonnes)!
Year!
Other!arBficial!ferBlisers!
WA'
Aust.'
Poly.'(WA)'
Poly.'(Aust.)'

17. Student'Number:'167665'
'
The'green'line'square'is'CSBP'and'the'red'square'is'Coogee.'Image'source:'Google'Map.'
As'the'map'displayed,'Coogee'is'both'located'near'CSBP'and'also'the'port.'This'makes'the'
transportation'of'low'weight'to'ratio'chemicals'cheaper.'
They'also'established'many'tanks'at'the'customer’s'site.'It'is'unknown'whether'they'are'the'
first'mover'in'the'customer’s'site,'however,'this'might'deflect'potential'entrants.'
Both'the'overseas'and'interstate'competitors'have'to'pay'the'large'transport'cost.'Also'
overseas'competitors'need'to'pay'tariffs.''
'
3. End!to!end!solution!
Besides'the'chemical'factory,'they'also'have'other'facilities'such'as'storage'and'
transportation.'They'also'built'tanks'to'store'chemicals'at'their'customers’'site.'This'lowers'
the'cost'of'the'chemicals.'This'means'they'have'an'economic'of'scope'in'
production/delivery/storage'of'chemicals'which'lowers'the'cost'and'price'further.'Their'
expertise'with'handling/storing/transport'of'chemical'is'reflected'in'their'profit'(Exhibit'3.6'
In'1986'tank'terminal'and'transport'operation'contributes'30%'of'the'profit).'
4. Strong!brand!as!a!reputable!supplier!of!chemicals!
They'also'established'strong'brand'as'a'reputable'supplier.'This'is'critically'important'as'the'
mining'sector'requires'a'reliable'supply'of'chemicals.'They'also'developed'an'expertise'in'
handling'chemicals.'Because'of'this'expertise,'they'are'also'trusted'for'the'joint'venture'
projects'which'allow'them'to'increase'in'size'and'achieving'an'economic'of'scale'in'
producing'chemical.''

18. Student'Number:'167665'
'
5. Producing!niche!product!
They'also'have'a'strategy'on'selling'niche'product.'This'is'a'very'good'move'as'what'Tsun'Zu'
says:'only'attack'the'opponent'when'you'are'ten'times'its'size.'As'they'are'much'smaller,'
they'are'only'selling'niche'product'and'other'products'that'are'just'a'minor'feedstock'for'the'
large'manufacturer.'In'this'case,'they'have'little'and'sometimes'no'competition.'They'also'
enriched'the'relationship'with'other'companies'and'it'developed'the'experience'curve'in'
producing'and'handling'chemicals.'
'
'
Are!Coogee’s!competitive!advantages!hard!to!copy?!
1. Lower!cost!and!price.! !
This'is'easy'to'copy.''
2. Proximity!of!location.! !
This'is'easy'to'copy.'Other'companies'can'just'buy'land'close'to'the'supplier.'There'are'
plenty'of'lands'besides'the'chemical'companies/mining'companies'as'they'are'located'in'
suburban'location.'As'a'matter'of'fact,'process'chemical:'(Another'small'company'that'
Coogee'competed'against'for'the'WA'Water'Authority'tender)'used'Coogee'strategy.'Their'
location'is'very'near'with'Alcoa:'
'

19. Student'Number:'167665'
'
'
Yellow'is'Alcoa.'Purple'is'Process'Chemical.'Green'is'CSBP.'Red'is'Coogee'
'
3. End!to!end!solution !

20. Student'Number:'167665'
a. Learning!curve!in!handling!chemical.! !
This'is'difficult'to'copy'as'there'is'experience'curve'and'licenses'for'handling'
chemical.'
b. Location!of!the!storage!facility.! !
This'is'difficult'to'copy'as'Coogee'already'have'the'storage'facility'and'pipe'
connection'to'the'only'allSpurpose'terminal'able'to'store'flammable'and'hazardous'
bulk'liquid'in'WA.'
4. Strong!brand!as!a!reputable!supplier!of!chemicals.! !
a. This'is'moderate'level'to'copy.'It'will'take'time'to'establish'reputation'and'credibility'
with'suppliers'and'buyers.'It'will'also'take'effort'to'do'experiments'with'suppliers'to'
find'out'which'one'is'reliable.'
5. Producing!niche!product.! !
a. This'is'easy'to'copy.'It'just'need'a'market'research'on'determining'which'product''
!
In'summary:'except'for'their'branding'and'providing'an'end'to'end'solution,'their'competitive'
advantages'are'easy'to'copy.'
How!does!the!environment!influence!their!ability!to!capture!value?!
The'industry’s'ROE'is'lower'than'the'average'ASX'listed'company.'In'1986,'the'ROE'of'ASX'listed'
company'is'12%'(Dow,'2003)'compared'with'the'industry’s'ROE'of'10.3%.'
The'segments'are'classified'as'the'following:'
Chemical'companies' ' Price'sensitive.'Their'location'also'plays'a'factor.'The'buyers'
can'also'backward'integrate.'
'
'
Mining'companies.' ' Reliability'is'a'huge'factor'as'idle'time'is'expensive.'The'
mining'companies'are'unlikely'to'get'from'overseas'if'the'
supply'is'irregular.'
'
Therefore'low'bargaining'power'for'the'mining'company.'
Agriculture'companies.' ' Price'sensitive'buyer.''
'
'
Exports' ' The'export'are'affected'by'the'following'factors:'
S Tariffs.' '
S Exchange'rate.' '
S Freight'costs.' '
S Product'dumping. '
'
Freight'costs'can'be'large'depending'on'where'is'the'
destination.'There'is'also'tariff'in'the'destination'country.'
The'exchange'rate'of'Australian'dollar'is'low'at'the'moment.''
'

21. Student'Number:'167665'
There'are'a'lot'of'potential'buyers'overseas,'but'with'the'
weak'Australian'dollar,'this'is'a'good'market.'
'
Water'Authority' ' Price'sensitive'buyer.'
'
Overall'if'Coogee'focused'on'selling'to'the'mining'companies'and'exports,'they'are'in'better'
segments.'This'is'proven'by'the'fact'that'the'fact'that'Coogee'derived'most'of'the'profit'in'selling'
Copper'Sulphate'in'Eastern'state.'(Exhibit'3.10:'Profit'from'mining'companies'in'Eastern'State'
derived'64%'of'Copper'Sulphate'revenue).'
On'certain'product'(Example:'Aluminium'Sulphate)'Firm’s'action'to'drop'price'can'results'in'very'
thin'margin.'However,'in'general,'there'are'long'contract'to'protect'the'dominance'of'the'market.'
There'are'also'very'few'players.'Also'a'firm'can'retaliate'by'choosing'another'niche'product.'
'
'
Question)4)
'
Positive!aspects!of!joint!venture! Negative!aspects!of!joint!venture!
1. Diversification'of'their'product'line'and'
less'reliant'on'the'copper'sulphate'
product.'
2. Able'to'scale'without'borrowing'too'
much'money'from'the'bank.'
3. Long'term'contract'protection.'
4. The'risk'of'financials'is'shared'between'a'
few'parties.'
5. Lands'are'shared'between'the'customer'
and'the'joint'venture.'
6. There'could'be'a'clause'in'the'joint'
venture'for'nonScompete'agreement,'
this'can'be'helpful'as'there'will'be'lesser'
price'war.'
7. It’s'also'building'stronger'relationship'
with'the'other'chemical'industries.'
8. They'can'also'deepened'their'learning'
curve'in'chemical'
producing/transport/storage.'
1. There'is'a'risk'of'inability'to'pay'up'the'
debt'in'the'loan.'
2. The'joint'venture'business'model'is'
different'from'existing'model.'They'are'
taking'on'debt'and'having'larger'cost'
structure'and'newer'machineries.'
3. There'could'be'restricting'elements'in'
their'joint'venture'such'as'nonS
competitive'agreement'and'limitation'on'
selling'equity.'
4. The'long'term'contract'with'the'joint'
venture'also'served'as'a'double'edged'
sword.'It'could'lock'them'up'in'a'number'
of'years.'
5. They'may'not'have'a'voice'in'the'joint'
venture'as'they'have'very'little'
controlling'interest'with'20%'share.'
6. They'might'be'given'a'lower'number'of'
profit'figure'compared'to'other'bigger'
players'as'they'are'a'small'players'and'
lacking'negotiation'powers.'
'
Do!they!build!on!Coogee’s!past!bases!of!success?!
The'joint'venture'partially'builds'on'past'bases'of'success.''

22. Student'Number:'167665'
The'following'are'the'things'that'are'built'on'Coogee'past'success:'
1. Niche!strategy!
The'joint'venture'is'producing'only'the'things'that'have'a'lot'of'demands'and'very'little'
supply'locally.''
2. Proximity!to!the!customer!
The'location'of'the'ChlorSAlkali'plant'is'located'at'SCM'site.'
3. Strong!Brand!
They'have'established'a'strong'brand'as'a'reliable'supplier'of'chemical'to'the'mining'
companies'which'is'important'as'idle'time'for'the'mining'companies'are'expensive.'
4. Complimentary!Services!
They'also'offered'other'services'besides'producing'chemical.'This'includes'the'storage'
facility'and'transport.'
5. Experience!curve!in!handling!toxic!chemical!
The'basis'of'their'winning'the'ChlorSAlkali'tender'is'because'of'their'expertise'with'handling'
the'toxic'chemical.'
'
'
'
The'following'are'the'things'that'are'not'built'on'Coogee'past'success:'
1. Cost!factor!
In'the'existing'strategy,'Coogee'can'lower'the'cost'of'production'using'second'hand'
machineries'and'old'process'technologies.'The'joint'venture'is'using'new'machineries.'They'
also'are'using'newer'processes'in'the'production'of'chemicals.'
2. Large!quantity!
Previously'they'are'only'producing'small'amount'of'quantity'that'the'big'players'in'the'
industry'ignored.'Currently'they'are'producing'large'quantity'of'chemicals'and'they'are'
directly'competing'with'the'large'players.'Although'the'joint'venture'is'with'the'other'big'
players'in'Australia'and'there'could'be'a'nonScompete'agreement'signed;'however,'Coogee'
is'now'exposed'with'other'large'overseas'chemical'producers'that'have'the'economics'of'
scale'in'producing'chemicals'cheaper.'
3. Debt!structure!
In'the'existing'strategy,'the'company'has'no'debt.'In'this'Joint'Venture,'they'are'taking'on'
debt.'The'debt'that'they'are'taking'will'be'a'risk'to'the'company.'It'is'mentioned'that'they'
have'cash'problem'during'October'to'January'months'because'of'the'seasonality'of'the'
industry.'It'is'possible'if'there'is'a'drop'in'demand'of'their'product,'then'they'might'default'
in'their'loan.'
Should!they!proceed!with!the!Joint!Venture?!Why?!
In'summary'they'should'proceed'with'the'joint'venture.''Even'though'the'financials'are'not'good,'
however,'the'default'risk'is'low'as'they'are'much'protected'in'the'industry.'The'biggest'risks'are'the'
decline'in'gold'price'and'increased'in'Australian'dollar.'Sensitivity'analysis'is'done'and'it'is'not'
causing'problem.'Besides,'they'can'take'steps'to'lower'the'risks.'Below'are'my'analyses'for'the'joint'
venture.'

23. Student'Number:'167665'
'
Coogee'financials'after'the'joint'venture'
There'is'a'significant'increased'ROE'from'19.43%'before'the'joint'venture'to'94.63%.'The'ROA'
however'is'only'9.57%'and'the'asset'turnover'is'only'2.31'compared'to'12.7'before'the'joint'
venture.'Interest'efficiency'is'0.28'and'their'leverage'is'very'high'at'9.89.'In'conclusion,'the'financials'
are'not'good,'they'are'too'heavily'geared.'
'

24. Student'Number:'167665'
'
1986 1988
Value of Equity 1,181,000.00$ 1,181,000.00$
Value of Debt -$ 10,500,000.00$
Industry ROE 10.3%
Average Gearing 59%
1986
Tax Rate 49%
Interest Rate 15%
Gearing 0%
Income Statement Information
Revenue 15,000,000.00$ 27,000,000.00$
COGS -$ -$
Interest expense -$ 1,575,000.00$
Income taxes 220,500.00$ 302,054.79$
Income before taxes 450,000.00$ 616,438.36$
Net income 229,500.00$ 314,383.56$
Liability Information
Total Liabilities -$ 10,500,000.00$
Equity Information
Total shareholder equity 1,181,000.00$ 1,181,000.00$
Asset Information
Total assets 1,181,000.00$ 11,681,000.00$
Financial Analysis
NOPAT 229,500.00$ 1,117,633.56$
ROE 19.43% 94.63%
DuPont Decomposition
ROA 19.43% 9.57%
Asset Turnover 12.70 2.31
Interest efficiency 1 0.28
Leverage 1 9.89

25. Student'Number:'167665'
Assumption'is'that'the'interest'expense'is'already'paid.'
S How'is'the'value'created?'
o Niche!product!selection!!
The'products'that'they'select'(Sodium'Cyanide'and'Caustic'Soda)'are'niche'products.'
There'are'not'a'lot'made'in'Australia.'
Sodium'Cyanide'
! Market'demand:'40,000'tonnes.'
! Joint'venture'supply:'20,000'tonnes.'
Caustic'Soda'
! Market'demand:'500,000'tonnes.'
! Current'supply:'5,000'tonnes.'
! Joint'venture'supply:'18,000'tonnes.'
o Economic!of!scale!in!production!
They'have'a'newer'machineries'and'better'processes.'They'also'create'the'chemicals'
in'large'quantities.'
o Better!relationship!with!other!chemical!companies!
They'have'built'the'storage'facility'at'the'customer'location.'They'also'will'have'a'
better'relationship'with'other'chemical'companies.'
o Deepened!the!experience!curve!in!creating/handling/storage!of!chemicals!
The'joint'venture'will'allow'them'to'handle'more'complex'projects'and'deepened'
their'experience'curve'in'creating,'handling'and'storage'of'chemicals.'
S Is'it'hard'to'copy?'
o Niche!product!selection!!
! This'is'not'hard'to'copy.'They'just'have'to'do'a'market'research.!
o Economic!of!scale!in!production!
! This'is'hard'to'copy'as'it'requires'huge'amount'of'money'and'existing'big'
players'are'already'there.'
o Better!relationship!with!other!chemical!companies!
! This'is'not'hard'to'copy'as'existing'chemical'companies'are'already'interS
connected.'
o Deepened!the!experience!curve!in!creating/handling/storage!of!chemicals!
! This'is'hard'to'copy'as'the'experience'curve'needed'to'handle'and'store'the'
chemicals'complicated.'
'
S How'does'the'environment'influence'their'ability'to'capture'value?'
o Since'most'of'these'chemical'companies'are'interconnected'and'there'could'be'a'
nonScompetitive'agreement,'the'risk'of'the'price'war'is'unlikely.'
o The'biggest'risk'with'the'joint'venture'is'inability'to'pay'up'debt'if'there'is'a'decline'
of'revenue'from'the'mining'cause'by'the'decline'of'the'price'of'gold'and/or'an'
increased'in'Australian'currency.'However,'at'this'stage,'the'trend'of'the'Australian’s'
currency'is'already'low'and'even'if'the'gold'price'goes'down,'at'most'it'will'go'back'
to'$271:'Which'is'a'50%'decreased'from'$538.'However'the'market'supply'

26. Student'Number:'167665'
production'for'sodium'cyanide'is'only'50%'of'current'peak'demand'and'similarly,'
the'total'supply'for'Caustic'Soda'is'only'46%'of'demand.'
'
How'to'lower'the'risk'for'the'joint'venture?'
S Have'a'clause'in'the'joint'venture'to'be'able'to'sell'the'joint'venture'in'case'if'they'cannot'
pay'up'the'debt.'
S Have'a'clause'in'the'joint'venture'for'availability'of'other'parties'to'help'out'their'debt'in'
case'of'low'demand'of'their'product'in'exchange'of'equity.'
S Have'another'person'to'finance'it'using'equity'instead'of'debt.'Currently'the'equity'is'hold'
90%'by'Gordon'Martin.'He'still'can'distribute'some'of'the'equity'to'other'person'to'lower'
the'risk.'
'
Other'alternative'besides'the'joint'venture:'
1. Expanding'their'tank'and'transport'product'line.'There'is'a'huge'margin'to'sell'Urea'from'
WA'to'SA.'Margin'is'$39.95/tonne.'See'exhibit'3.9.''
2. Doing'exports.'
)
' )

27. Student'Number:'167665'
Exhibit)Financials)
'
'
1986
Value of Equity 1,181,000.00$
Value of Debt -$
Industry ROE 10.3%
Average Gearing 59%
1986
Tax Rate 49%
Interest Rate 15%

28. Student'Number:'167665'
'
Gearing 0% 59%
Income Statement Information
Revenue 15,000,000.00$ 15,000,000.00$
COGS -$ -$
Interest expense -$ 104,518.50$
Income taxes 220,500.00$ 220,500.00$
Income before taxes 450,000.00$ 450,000.00$
Net income 229,500.00$ 124,981.50$
Liability Information
Total Liabilities -$ 696,790.00$
Equity Information
Total shareholder equity 1,181,000.00$ 484,210.00$
Asset Information
Total assets 1,181,000.00$ 1,181,000.00$
Financial Analysis
NOPAT 229,500.00$ 178,285.94$
ROE 19.43% 36.82%
DuPont Decomposition
ROA 19.43% 15.10%
Asset Turnover 12.70 12.70
Interest efficiency 1 0.70
Leverage 1 2.44

29. Student'Number:'167665'
Exhibit)Growth)
'
1971 1976 1977
Revenue
9 bags of chemicals -$
Sodium Silicate 920,769.23$ 920,769.23$
Copper Sulphate 2,700,000.00$
Failed Aerosol
Ferrous Sulphates
Aluminium Sulphate
Chlor-Alkali
Sodium Cyanide
Tank and Transport
Total Revenue -$ 920,769.23$ 3,620,769.23$
Revenue Growth 293%
Average Revenue Growth (1976-1986) Before JV 45%
Average Revenue Growth (1976-1988) After JV 44%
Profit
9 bags of chemicals -$
Sodium Silicate 36,986.30$ 36,986.30$
Copper Sulphate 73,972.60$
Failed Aerosol
Ferrous Sulphates
Aluminium Sulphate
Chlor-Alkali
Sodium Cyanide
Tank and Transport
Total Profit -$ 36,986.30$ 110,958.90$
Proft Growth 200%
Average Profit Growth (1976-1986) Before JV 36%
Average Profit Growth (1976-1988) After JV 33%

30. Student'Number:'167665'
'
'
1978 1979 1980
Revenue
9 bags of chemicals
Sodium Silicate 920,769.23$ 920,769.23$ 920,769.23$
Copper Sulphate 3,400,000.00$ 4,100,000.00$ 4,800,000.00$
Failed Aerosol 4,000.00$
Ferrous Sulphates
Aluminium Sulphate
Chlor-Alkali
Sodium Cyanide
Tank and Transport 527,451.28$ 1,054,902.56$ 1,582,353.85$
Total Revenue 4,852,220.51$ 6,075,671.79$ 7,303,123.08$
Revenue Growth 34% 25% 20%
Average Revenue Growth (1976-1986) Before JV
Average Revenue Growth (1976-1988) After JV
Profit
9 bags of chemicals
Sodium Silicate 36,986.30$ 36,986.30$ 36,986.30$
Copper Sulphate 93,150.68$ 112,328.77$ 131,506.85$
Failed Aerosol 36,000.00-$
Ferrous Sulphates
Aluminium Sulphate
Chlor-Alkali
Sodium Cyanide
Tank and Transport 15,068.49$ 30,136.99$ 45,205.48$
Total Profit 109,205.48$ 179,452.05$ 213,698.63$
Proft Growth -2% 64% 19%

31. Student'Number:'167665'
'
'
1981 1982 1983
Revenue
9 bags of chemicals
Sodium Silicate 920,769.23$ 920,769.23$ 920,769.23$
Copper Sulphate 5,500,000.00$ 6,200,000.00$ 6,900,000.00$
Failed Aerosol
Ferrous Sulphates 302,884.62$ 302,884.62$
Aluminium Sulphate 29,284.62$ 29,284.62$
Chlor-Alkali
Sodium Cyanide
Tank and Transport 2,109,805.13$ 2,637,256.41$ 3,164,707.69$
Total Revenue 8,530,574.36$ 10,090,194.87$ 11,317,646.15$
Revenue Growth 17% 18% 12%
Average Revenue Growth (1976-1986) Before JV
Average Revenue Growth (1976-1988) After JV
Profit
9 bags of chemicals
Sodium Silicate 36,986.30$ 36,986.30$ 36,986.30$
Copper Sulphate 150,684.93$ 169,863.01$ 189,041.10$
Failed Aerosol
Ferrous Sulphates 18,493.15$ 18,493.15$
Aluminium Sulphate 12,328.77$ 12,328.77$
Chlor-Alkali
Sodium Cyanide
Tank and Transport 60,273.97$ 75,342.47$ 90,410.96$
Total Profit 247,945.21$ 313,013.70$ 347,260.27$
Proft Growth 16% 26% 11%

32. Student'Number:'167665'
'
'
1984 1985 1986
Revenue
9 bags of chemicals
Sodium Silicate 920,769.23$ 920,769.23$ 920,769.23$
Copper Sulphate 7,600,000.00$ 8,300,000.00$ 9,000,000.00$
Failed Aerosol
Ferrous Sulphates 302,884.62$ 302,884.62$ 302,884.62$
Aluminium Sulphate 29,284.62$ 29,284.62$ 29,284.62$
Chlor-Alkali
Sodium Cyanide
Tank and Transport 3,692,158.97$ 4,219,610.26$ 4,747,061.54$
Total Revenue 12,545,097.44$ 13,772,548.72$ 15,000,000.00$
Revenue Growth 11% 10% 9%
Average Revenue Growth (1976-1986) Before JV
Average Revenue Growth (1976-1988) After JV
Profit
9 bags of chemicals
Sodium Silicate 36,986.30$ 36,986.30$ 36,986.30$
Copper Sulphate 208,219.18$ 227,397.26$ 246,575.34$
Failed Aerosol
Ferrous Sulphates 18,493.15$ 18,493.15$ 18,493.15$
Aluminium Sulphate 12,328.77$ 12,328.77$ 12,328.77$
Chlor-Alkali
Sodium Cyanide
Tank and Transport 105,479.45$ 120,547.95$ 135,616.44$
Total Profit 381,506.85$ 415,753.42$ 450,000.00$
Proft Growth 10% 9% 8%

33. Student'Number:'167665'
'
'
'
1977 1988
Revenue
9 bags of chemicals
Sodium Silicate 920,769.23$ 920,769.23$
Copper Sulphate 9,000,000.00$ 9,000,000.00$
Failed Aerosol
Ferrous Sulphates 302,884.62$ 302,884.62$
Aluminium Sulphate 29,284.62$ 29,284.62$
Chlor-Alkali 3,000,000.00$
Sodium Cyanide 9,000,000.00$
Tank and Transport 4,747,061.54$ 4,747,061.54$
Total Revenue 15,000,000.00$ 27,000,000.00$
Revenue Growth 0% 80%
Average Revenue Growth (1976-1986) Before JV
Average Revenue Growth (1976-1988) After JV
Profit
9 bags of chemicals
Sodium Silicate 36,986.30$ 36,986.30$
Copper Sulphate 246,575.34$ 246,575.34$
Failed Aerosol
Ferrous Sulphates 18,493.15$ 18,493.15$
Aluminium Sulphate 12,328.77$ 12,328.77$
Chlor-Alkali 49,315.07$
Sodium Cyanide 117,123.29$
Tank and Transport 135,616.44$ 135,616.44$
Total Profit 450,000.00$ 616,438.36$
Proft Growth 0% 37%
1988,''
$616,438.36''
'$(100,000.00)'
'$S''''
'$100,000.00''
'$200,000.00''
'$300,000.00''
'$400,000.00''
'$500,000.00''
'$600,000.00''
'$700,000.00''
1970' 1975' 1980' 1985' 1990'
Profit!
Year!
Profit!
Series1'
Linear'(Series1)'

34. Student'Number:'167665'
'
'
' '
'$(5,000,000.00)'
'$S''''
'$5,000,000.00''
'$10,000,000.00''
'$15,000,000.00''
'$20,000,000.00''
'$25,000,000.00''
'$30,000,000.00''
1970' 1975' 1980' 1985' 1990'
Revenue!
Year!
Revenue!
Series1'
Linear'(Series1)'