Why is purchase price not included in total revenue?

Hi Ben!

I see you received clarifying answers already. 

Sharing with you a few other cases that are highly rated and which are based on recent interviews (plus, they contain interviewer notes):
 

• https://www.preplounge.com/en/management-consulting-cases/interviewer-led-mckinsey-style/intermediate/element-mobile-expands-into-refurbished-phones-mbb-2nd-round-302
• https://www.preplounge.com/en/management-consulting-cases/candidate-led-usual-style/advanced/mbb-first-round-soy-technologies-303
• https://www.preplounge.com/en/management-consulting-cases/interviewer-led-mckinsey-style/intermediate/mbb-second-round-codewave-employee-turnover-challenge-304

Best,
Cristian

Hi,

I took a quick look at the case. Indeed it is quite confusing and probably that's why its not a high rated case. If 8% is the overall net margin for our client, than that margin has to include total variable costs as well (which t case doesn't in this in the first average margin calculation).

In general, market charts like Exhibit 1 (the variwide graph) will not include purchase price:

1. The charts are normally meant to express revenue / sales for which you do not need purchase price 
2. In reality, purchase price would be confidential as well so hard to get this

All the best!

Hi there,

Benjamin is exactly right! I've aim for cases that are 4-star and above as it's a good indicator of the quality of the case!

Thank you for your question. We have reviewed and adjusted the case. We hope it is more clear now, and let us know if you have further feedback. Your PrepLounge team