1. Profit Analysis of International Defence Industry Event 5 Deakin University CRICOS Provider Code: 00113B

2. 5.1 Canadian military spending (1980-81 to 2012-13) 2

3. 5.2 Australian military spending

4. 5.3 Definitions Return on sales (ROS): percentage of profit extracted from the revenue gathered from sales Return on shareholder equity (ROE): how well the company is using its invested capital and assets 4

5. 5.4 Calculating the ratios Return on sales (ROS): Earnings before interest and tax Total sales Return on equity (ROE): Net profit before tax Ordinary shareholders’ equity 5

6. 5.5 Pre-Tax Accounting Profit Sample Canadian Listed Defence Companies (as Percentage of Equity, Assets and Sales) 6

7. 5.6 Defence Materiel Contractors Average Return on Sales (pre-tax) 2006-09 7

8. 5.7 Defence Materiel Contractors Average Return on Equity (pre-tax) 2006-09 8

9. Defence Compared to Other Sectors Event 5

10. 5.8 Pre-Tax Accounting Profit Percentage Return on Sales for Comparative Groups 2006-09 10

11. 5.9 Pre-tax Return on Sales Canadian Enterprises Jun Q 2010 11 Companies Headline this

12. 5.10 Pre-tax Return on Equity Canadian Enterprises Jun Q 2010 12 Investors want this

13. 5.11 Key messages The defence industry is one of the better industries in which to invest Yearly profit and the return on investment capital are good Profit is goodness provided capability is delivered on time 13