The year 2017 had been a great year for Blue Sea Enterprises Limited. The net profit of

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The year 2017 had been a great year for Blue Sea Enterprises Limited. The net profit of the company has increased by almost 70% compared to the previous year. The management has declared an increased dividend on its equity shares. The comparative financials of the company for the years 2016 and 2017 are given as follows: 

Particulars Sales Other operating income Total Cost of goods sold Employee cost Selling and Administrative


You are required to:

1. Calculate cash operating margin, operating margin, pre­tax margin and net margin for the years 2016 and 2017.

2. Has the performance of the company really improved? Analyse the financial performance using the above ratios and expense ratios.

3. Calculate the dividend pay­out ratio for the two years. Is the higher divided justified for the year 2017?

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