4. Financial Analysis
4.1 Time Series Analysis
4.1.1 Profitability Analysis
Mayne Pharma reported sale revenue of $141.4M in 2015 underlying EBITDA of $36.4m and reported NPAT of $7.8m. The performance of 2015 seems unsatisfactory as the net profit margin is only 7.83% compared to 2014 where the net profit margin is 21.49% .These results were down due to the underperformance of products sold via third party US distributors in the first half of 2015 but the company realized the problem and has subsequently taken full control of these products by bringing distribution in-house during the second half. However, there is a positive trend of increasing gross profit margin staring from 2011 from 50.85% which reaches 83.05% in 2015. The reported NPAT for the second half was down $0.2m to $3.8m as it was impacted by the one-off costs that have been excluded from the underlying result. The profitability overall performance good and we can expect the net profit margin returns to a higher level.
4.1.2 Activity Analysis
The long term Asset Turnover ratio is experiencing a steady decline from 1.39 to 0.37 till 2015. The LTA turnover ratio …show more content…
Hence, its interest payment will be lower and its credit and solvency risk will also be lower. Though it has suggested a downward trend on interest coverage from 2014, which shows the margin of safety for the company to pay its current interest payment, its interest coverage is still within a relatively high level. What is noticeable is that MYX shares a high debt to equity ratio, so it may expose to higher solvency risk to repay its liabilities using its equity. Since the ratio has decreased after 2013, MYX has reduced its possible solvency. Accordingly, MYX had repaid all loans in 2012 that debt to equity ratio and interest coverage were invalid during this
4.1 Time Series Analysis
4.1.1 Profitability Analysis
Mayne Pharma reported sale revenue of $141.4M in 2015 underlying EBITDA of $36.4m and reported NPAT of $7.8m. The performance of 2015 seems unsatisfactory as the net profit margin is only 7.83% compared to 2014 where the net profit margin is 21.49% .These results were down due to the underperformance of products sold via third party US distributors in the first half of 2015 but the company realized the problem and has subsequently taken full control of these products by bringing distribution in-house during the second half. However, there is a positive trend of increasing gross profit margin staring from 2011 from 50.85% which reaches 83.05% in 2015. The reported NPAT for the second half was down $0.2m to $3.8m as it was impacted by the one-off costs that have been excluded from the underlying result. The profitability overall performance good and we can expect the net profit margin returns to a higher level.
4.1.2 Activity Analysis
The long term Asset Turnover ratio is experiencing a steady decline from 1.39 to 0.37 till 2015. The LTA turnover ratio …show more content…
Hence, its interest payment will be lower and its credit and solvency risk will also be lower. Though it has suggested a downward trend on interest coverage from 2014, which shows the margin of safety for the company to pay its current interest payment, its interest coverage is still within a relatively high level. What is noticeable is that MYX shares a high debt to equity ratio, so it may expose to higher solvency risk to repay its liabilities using its equity. Since the ratio has decreased after 2013, MYX has reduced its possible solvency. Accordingly, MYX had repaid all loans in 2012 that debt to equity ratio and interest coverage were invalid during this