Get Active in Our Amazing Community of Over 457,000 Peers!

Schedule mock interviews on the Meeting Board, join the latest community discussions in our Consulting Q&A and find like-minded Case Partners to connect and practice with!

Doesn't total profitability increase after removing the 3 items?

McKinsey Case: Digital & Vegan Restaurant Franchise
New answer on Feb 22, 2021
2 Answers
1.5 k Views
Anonymous A asked on Feb 20, 2021

I'm confused regarding the new profitability after removing the 3 prep items, even though the new profit margin is 1323 USD, if you go back and calculate the new total revenue and new total profit, it actually increases for the restaurant.

Example: old revenue total: 4940 and old profit total: 3540 (profitability: 71%)

New revenue total (removing 3 prep items): 4130 and new profit total: 3378 (profitability is 81%)

The case concludes that removing these items will not help profitability... which is not the case

Overview of answers

Upvotes
  • Upvotes
  • Date ascending
  • Date descending
Best answer
Ian
Expert
Content Creator
replied on Feb 20, 2021
#1 BCG coach | MBB | Tier 2 | Digital, Tech, Platinion | 100% personal success rate (8/8) | 95% candidate success rate
Was this answer helpful?
Clara
Expert
Content Creator
replied on Feb 22, 2021
McKinsey | Awarded professor at Master in Management @ IE | MBA at MIT |+180 students coached | Integrated FIT Guide aut

Hello!

Daniel, the author is in PrepL, hit him up and consider also doing a coaching session for in-depth analysis of the case.

Cheers,

Clara

Was this answer helpful?
Ian gave the best answer

Ian

Content Creator
#1 BCG coach | MBB | Tier 2 | Digital, Tech, Platinion | 100% personal success rate (8/8) | 95% candidate success rate
1,105
Meetings
79,306
Q&A Upvotes
241
Awards
5.0
151 Reviews
How likely are you to recommend us to a friend or fellow student?
0 = Not likely
10 = Very likely
You are a true consultant! Thank you for consulting us on how to make PrepLounge even better!
^