Where does these numbers come from?

Question

Hello,

Can someone perhaps help me understand where this information comes from in the case? And also what generally is going on in this step? It is under III. Quantitative analyses

Sales planning

Changes compared to the previous year's sales (EUR 660 million) result from a termination of sales of cat lavatories (EUR 70 million) and the termination of sales of articles
Consequently, sales planning amounts to EUR 501.5 million (EUR 660 million ./. EUR 70 million ./. EUR 88.5 million).

Thank you in advance

Answer 1

Great questions!

The client, whom we'll call CatCo (because presumably they sell cat lavatories) had 660 million euros of sales last year, which includes, among other items, a cat lavatories contract worth 70 million euros and an articles contract worth 88.5 million euros.

This year, CatCo's cat lavatories contract and articles contract were terminated. As a result, CatCo lost 158.5 million euros of revenue (70 million + 88.5 million = 158.5 million). This means that CatCo's revenue fell from 660 million last year to 501.5 million this year (660 million - 158.5 million = 501.5 million)

Hope this helps!

Answer 2

That's a very common question, and a good catch that you're digging into it. The EUR 88.5 million isn't explicitly stated as a separate line item but is implicitly derived to make the final sales planning figure reconcile. You start with EUR 660 million, subtract the EUR 70 million for cat lavatories, and then whatever is left to reach EUR 501.5 million must be the "termination of sales of articles." So, 660 - 70 - X = 501.5, which means X = 88.5 million. It's a test of your ability to reconcile figures.

Generally, in the "Quantitative analyses" section, the interviewer is looking to see if you can accurately interpret numbers, perform basic calculations (often quickly in your head or on scratch paper), and ensure all the figures logically tie together. It's a key part of assessing your attention to detail and your ability to find these implied numbers that are critical for understanding the overall financial picture. Don't be afraid to work backwards to solve for a missing component.

Hope that clarifies things for your next case!

Answer 3

Hi Nora :)

Those numbers usually come from information given earlier in the case. The previous year’s total sales are EUR 660m, and the case mentions that two product categories will no longer be sold: cat lavatories with EUR 70m in sales and another group of articles with EUR 88.5m. In this step they are simply adjusting last year’s revenue by removing the sales that will disappear next year. So the calculation is just 660 minus 70 minus 88.5, which leads to the new planned sales of EUR 501.5m.

Hope this clarifies it! Feel free to reach out if anything is still unclear.

Best,
Alessa :)