Get Active in Our Amazing Community of Over 448,000 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!

Profit Margin Calculation

Roland Berger Case: Onlinestar
New answer on Jul 17, 2020
1 Answer
1.5 k Views
Enrico asked on Jul 14, 2020

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

Overview of answers

Upvotes
  • Upvotes
  • Date ascending
  • Date descending
Ian
Expert
Content Creator
replied on Jul 17, 2020
#1 BCG coach | MBB | Tier 2 | Digital, Tech, Platinion | 100% personal success rate (8/8) | 95% candidate success rate

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

Was this answer helpful?
How likely are you to recommend us to a friend or fellow student?
0
1
2
3
4
5
6
7
8
9
10
0 = Not likely
10 = Very likely