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Enrico

on Jul 14, 2020

Global

Question about

Profit Margin Calculation

Hello,

I don't understand why the previous year is taken into account in the calculation of the profits after the elimination of the product category. Shouldn't I consider:

- the new revenues: 501.5 M

- calculate the new % in terms of product segmentation?

Thanks

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Ian

Coach

on Jul 17, 2020

Top US BCG / MBB Coach - 5,000 sessions |Tech, Platinion, Big 4 | 9/9 personal interviews passed | 95% candidate success

Hi Enrico,

Fair question.

However, the only reason you know new revenues is 501.5M is because you used the previous year numbers.

What i mean is, the previous year's revenue was 590. When you take out products under 5 euro (which make up 15% of revenues), you get 501.5M (590 times .85).

So, by considering 501.5M you are, in of itself, using the previous year numbers