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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

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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

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