I have just been through this case in a meeting as an interviewer, but both me and my interviewee came up with different numbers for the changes in profitability. Is this a mistake of the numbers in the case, the formula (changes in profitability = changes in sales * profit margin) or our understanding of profit margin and calculation of profitability?
E.g, for seatbelts, if the profit margin is 50 %, and the change in sales is - $90 Mio, shouldn't the change in profitability be $-90 Mio*0,5 = -$45 Mio of this, and not -$23 Mio?
Thank you for your help :)
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