We use cookies to give you the best experience possible. By continuing we’ll assume you’re on board with our cookie policy

Kelor Chemical

The whole doc is available only for registered users

A limited time offer! Get a custom sample essay written according to your requirements urgent 3h delivery guaranteed

Order Now

From the Exhibit 4, U.S. Frasch Sulphur Industry Prices and Profitability, 1940-1967, we can get the information about the variations in the return on invested capital earned by the industry over the several decades. In sulphur industry, the return on invested capital was around 15% from 1940 to 1945. From 1946, rate of return began to increase dramatically, starting from 16.2 %( 1945), and reached 33.8% in 1950. This high rate of return kept for couples of years (1951-1955), ranging from 29% to 31%. Starting from 1956, rate of return on invested capital in sulphur industry dropped sharply, all the way back to the profitability level of early 40’s 15% rate of return in only 2 years. This fall did not stop until the rate of return dropped to as low as 7.5% in 1963 where the very bottom was. From 1964, the profitability started to rise again. The rate of return went back to the original 15% level in 1966.

From Exhibit 6, U.S. Sulphur Supply, Demand, and Inventory Statistics, 1953-1967, we can get the data of annual total supplies and total demand. We take Production and Imports together as the total annual supplies of U.S. Also, we take Exports and Domestic Consumption together as the total annual demands of U.S. Based on the data we have, we can see that the total annual demands increased every year. This increase was from both sides of the demands, Exports and Domestic, especially the latter in later years of this period. From economics theory we know that increasing demands lead to increasing price. Increasing price leads to increasing supplies. In order to meet with the increasing demand, manufacturers needed to raise their supplies. As a result, this increase in manufacture required more capital investment.

The background note also addresses the profitability level of sulphur industry. Before late 1950s, the sulphur industry was highly profitable. During late 1950s to early 1960s, the price eroded by new production from Canada and France, causing the rate of return fall below 10%. After 1963, sulphur industry’s profitability began a return to its formal level due to the rapid growth of demands. Demands affect the product price. Meanwhile, the supplies influence the price in the other way. If the supplies exceeded the demands, product price would drop. That’s the reason that when foreign supplies came into the market, sulphur price eroded and profitability also fell in the down period. From the total demands, we can tell that the total demands grew rapidly and exceeded the supplies. This caused the rate of return raised again in the mid-60.

higher the capacity (thousand tons of sulphur/year), lower the total unit production cost.

Related Topics

We can write a custom essay

According to Your Specific Requirements

Order an essay
Materials Daily
100,000+ Subjects
2000+ Topics
Free Plagiarism
All Materials
are Cataloged Well

Sorry, but copying text is forbidden on this website. If you need this or any other sample, we can send it to you via email.

By clicking "SEND", you agree to our terms of service and privacy policy. We'll occasionally send you account related and promo emails.
Sorry, but only registered users have full access

How about getting this access

Your Answer Is Very Helpful For Us
Thank You A Lot!


Emma Taylor


Hi there!
Would you like to get such a paper?
How about getting a customized one?

Can't find What you were Looking for?

Get access to our huge, continuously updated knowledge base

The next update will be in:
14 : 59 : 59