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Case Study Of Mayne Pharma

Decent Essays

Question 1 (a)Mayne Pharma is a Public Company founded on 1845 and it was named FH Faulding & Co then. (b)There is a common understanding why is Mayne Pharma a public company. The company is limited by shares. Those shares are publicly traded in Australian Stock Exchange. The company have a set of board of directors, each of them have umpteen experiences in their industries and their special responsibilities towards the company. (c)The net assets in their 2013 statements of financial position is the same dollar value as the total equity. (d)Both are equivalent as the amounts stated represent the company’s net worth (e)Mayne Pharma used consolidated statements so that to ensure others know the statements of the group includes the parent …show more content…

(1 mark) i.Net profit is net of other accrued expenses which make it further a small amount (Eisen, 2000). ii.CFO includes earnings before interest and tax are deducted from the income amount iii.CFO does not include non-cash expenses such as depreciation (f)Now refer to Note 24 (Notes to the Consolidated Statement of Cash Flows) and identify the 3 largest contributors to this difference. (1 mark) i.Cash and cash equivalents excludes restricted cash ii.Cash at the bank attracts floating interests iii.Net foreign exchanges (g)Observe that Mayne Pharma has reported negative ‘Net cash flows from investing activities’ for 2013. Explain whether, in your opinion, these negative net cash flows represent a potential problem for Mayne Pharma. (1 mark) The negative cash flows from investing activities might not present a potential problem for Mayne Pharma because it may be sprouting from heavy investment expenditures which to business are not necessarily a bad thing (Kieso et al

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