Hi there,If you know the percentage of revenues of each division, you should be able to get it by multiplying the gross margin of each division times the percentage of contribution of revenues of that particular division out of the total.Example:Division AGross profit: 10Revenues: 20Margin: 50%Division BGross profit: 15Revenues: 20Margin: 75%Division CGross profit: 20Revenues: 50Margin: 40%Total revenues are 90.You can get the overall margin as:50%*(20/90)+75%*(20/90)+40%*(50/90) =50%Indeed you can check we get the same result as calculating the overall company gross margin:OverallGross profit: 45Revenues: 90Margin: 50%Hope this helps,Francesco

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Anonymous A

on Aug 13, 2021

Global

Gross margin

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Top answer

Francesco

Coach

on Aug 13, 2021

#1 Coach for Sessions (4.500+) | 1.500+ 5-Star Reviews | Proven Success: ➡ interviewoffers.com | Ex BCG | 10Y+ Coaching

Hi there,

If you know the percentage of revenues of each division, you should be able to get it by multiplying the gross margin of each division times the percentage of contribution of revenues of that particular division out of the total.

Example:

Division A
- Gross profit: 10
- Revenues: 20
- Margin: 50%
Division B
- Gross profit: 15
- Revenues: 20
- Margin: 75%
Division C
- Gross profit: 20
- Revenues: 50
- Margin: 40%

Total revenues are 90.

You can get the overall margin as:

50%*(20/90)+75%*(20/90)+40%*(50/90) =50%

Indeed you can check we get the same result as calculating the overall company gross margin:

Overall
- Gross profit: 45
- Revenues: 90
- Margin: 50%

Hope this helps,

Francesco

2 comments

Anonymous A

on Aug 13, 2021

Thanks, are there any good resources to practice math questions like these?

Francesco

Coach

on Aug 14, 2021

#1 Coach for Sessions (4.500+) | 1.500+ 5-Star Reviews | Proven Success: ➡ interviewoffers.com | Ex BCG | 10Y+ Coaching

Hi there, there is a math tool here on PrepLounge that you can try. Besides that, you can go through some good casebooks (eg Insead) and do the math part of the different cases – that should be pretty close to the possible questions in the math part. Hope this helps!