commercial-calculations-table

commercial calculation table | 9 Exercises

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Application: Belle Douceur Pastries

States :

The pastry shop “Pâtisseries Belle Douceur” wants to analyze the profitability of its flagship product, a chocolate cake. The purchase price excluding tax of the cake is €12, and the sale price excluding tax is set at €20. The manager wants to calculate financial indicators and evaluate different hypotheses. The applicable VAT rate is 5,5%.

Work to do :

  1. Calculate the profit margin of the cake.
  2. Determine the markup rate of the cake.
  3. What would be the selling price including tax of the cake?
  4. If the monthly quantity sold is 150 units, what is the overall margin?
  5. Analyze the financial implications of increasing the purchase price to €14.

Proposed correction:

  1. Margin rate:
    The margin rate is calculated using the formula:
    Margin rate = ((PV excluding tax – PA excluding tax) ÷ PA excluding tax) x 100
    By replacing:
    ((€20 – €12) ÷ €12) x 100 = 66,67%
    The cake margin rate is 66,67%.

  2. Mark rate:
    The markup rate is calculated using the formula:
    Brand rate = ((PV excluding tax – PA excluding tax) ÷ PV excluding tax) x 100
    By replacing:
    ((€20 – €12) ÷ €20) x 100 = 40%
    The cake's markup rate is 40%.

  3. Selling price including VAT:

The sales price including tax is calculated as follows:
PV including VAT = PV excluding VAT x (1 + VAT)
PV including tax = €20 x (1 + 0,055) = €21,10
The selling price of the cake including tax is €21,10.

  1. Overall margin:
    The overall margin is calculated using the formula:
    Overall margin = Unit margin x Quantity sold
    Unit margin = PV HT – PA HT = €20 – €12 = €8
    Overall margin = €8 x 150 units = €1200
    The overall monthly margin for the product is €1.

  2. Analysis of the increase in the purchase price:
    If the purchase price increases to €14, we recalculate the margin rate:
    Margin rate = ((€20 – €14) ÷ €14) x 100 = 42,86%
    This reduction in the margin rate implies a reduction in profitability, requiring either cost optimization or an adjustment of the sales price.

Formulas Used:

Title Formulas
Margin rate ((PV HT – PA HT) ÷ PA HT) x 100
Brand taxes ((PV HT – PA HT) ÷ PV HT) x 100
PV including tax PV HT x (1 + VAT)
Overall margin Unit margin x Quantity sold
Unit margin PV HT – PA HT

Application: Dynamic Sports Equipment

States :

The company "Équipement Sportif Dynamique", specializing in the sale of sports shoes, wants to analyze the efficiency of its purchasing department. For a pair of shoes whose purchase price excluding tax is €60, it is sold at a price excluding tax of €100. The manager wants to estimate some essential indicators. The applicable VAT rate is 20%.

Work to do :

  1. Calculate the margin rate for the pair of shoes.
  2. Determine the markup rate of this product.
  3. What is the selling price including tax of a pair of shoes?
  4. If the company sells 200 pairs of shoes per month, what is the overall monthly margin?
  5. Discuss the impact of a 10% discount on the net selling price and its consequences on the markup rate.

Proposed correction:

  1. Margin rate:
    Margin rate = ((PV excluding tax – PA excluding tax) ÷ PA excluding tax) x 100
    By replacing:
    ((€100 – €60) ÷ €60) x 100 = 66,67%
    The margin rate of the pair of shoes is 66,67%.

  2. Mark rate:
    Brand rate = ((PV excluding tax – PA excluding tax) ÷ PV excluding tax) x 100
    By replacing:
    ((€100 – €60) ÷ €100) x 100 = 40%
    The markup rate of the pair of shoes is 40%.

  3. Selling price including VAT:

PV including VAT = PV excluding VAT x (1 + VAT)
PV including tax = €100 x (1 + 0,20) = €120
The selling price including tax for a pair of shoes is €120.

  1. Overall margin:
    Unit margin = PV HT – PA HT = €100 – €60 = €40
    Total margin = €40 x 200 = €8000
    The overall monthly margin is €8.

  2. Impact of the 10% discount:
    New PV excluding VAT = €100 x (1 – 0,10) = €90
    New markup rate = ((€90 – €60) ÷ €90) x 100 = 33,33%
    A 10% discount on the net selling price reduces the markup rate to 33,33%, thus affecting the profitability of the product.

Formulas Used:

Title Formulas
Margin rate ((PV HT – PA HT) ÷ PA HT) x 100
Brand taxes ((PV HT – PA HT) ÷ PV HT) x 100
PV including tax PV HT x (1 + VAT)
Unit margin PV HT – PA HT
Overall margin Unit margin x Quantity sold

Application: SavoirPlus Bookstore

States :

The bookstore "SavoirPlus" wants to calculate the profitability for a popular book that it sells. The purchase cost excluding tax of the book is €15, and the sale price excluding tax is €25. The manager wants to evaluate these indicators and think about possible adjustments. The applicable VAT rate is 5,5%.

Work to do :

  1. What is the margin rate for this book?
  2. Calculate the book's markup rate.
  3. What is the sales price including tax applied to the book?
  4. For a monthly sale of 100 books, what is the overall margin for this product?
  5. What would be the financial implications if the VAT rate increased to 10%?

Proposed correction:

  1. Margin rate:
    Margin rate = ((PV excluding tax – PA excluding tax) ÷ PA excluding tax) x 100
    By replacing:
    ((€25 – €15) ÷ €15) x 100 = 66,67%
    The margin rate for the book is 66,67%.

  2. Mark rate:
    Brand rate = ((PV excluding tax – PA excluding tax) ÷ PV excluding tax) x 100
    By replacing:
    ((€25 – €15) ÷ €25) x 100 = 40%
    The book's markup rate is 40%.

  3. Selling price including VAT:

PV including VAT = PV excluding VAT x (1 + VAT)
PV incl. VAT = €25 x (1 + 0,055) = €26,375 ? rounded to €26,38
The sales price of the book including tax is €26,38.

  1. Overall margin:
    Unit margin = PV HT – PA HT = €25 – €15 = €10
    Overall margin = €10 x 100 = €1
    The overall monthly margin is €1 for this book.

  2. Implications of a 10% VAT:
    With a VAT rate of 10%, the new PV including VAT would be:
    New PV including VAT = €25 x (1 + 0,10) = €27,50
    The increase in the sales price including tax could affect demand for the book.

Formulas Used:

Title Formulas
Margin rate ((PV HT – PA HT) ÷ PA HT) x 100
Brand taxes ((PV HT – PA HT) ÷ PV HT) x 100
PV including tax PV HT x (1 + VAT)
Unit margin PV HT – PA HT
Overall margin Unit margin x Quantity sold

Application: Naturalis Garden Center

States :

The garden center "Naturalis" wants to evaluate the sales performance for a set of flower pots. The purchase cost excluding VAT of a set of flower pots is €10, and it is sold at a price excluding VAT of €18. The manager wants to obtain several indicators to adjust his strategy. The applicable VAT rate is 5,5%.

Work to do :

  1. Calculate the margin rate for the set of flower pots.
  2. Determine the markup rate of this item.
  3. What would be the selling price including tax?
  4. If the garden center sells 300 sets per month, what is the overall margin?
  5. What action would you recommend if the storage cost increased by €2 per set?

Proposed correction:

  1. Margin rate:
    Margin rate = ((PV excluding tax – PA excluding tax) ÷ PA excluding tax) x 100
    By replacing:
    ((€18 – €10) ÷ €10) x 100 = 80%
    The markup is 80% for this set of flower pots.

  2. Mark rate:
    Brand rate = ((PV excluding tax – PA excluding tax) ÷ PV excluding tax) x 100
    By replacing:
    ((€18 – €10) ÷ €18) x 100 = 44,44%
    The markup rate is 44,44%.

  3. Selling price including VAT:

PV including VAT = PV excluding VAT x (1 + VAT)
PV including tax = €18 x (1 + 0,055) = €18,99
The sales price including VAT is €18,99.

  1. Overall margin:
    Unit margin = PV HT – PA HT = €18 – €10 = €8
    Total margin = €8 x 300 = €2400
    The overall monthly margin is €2.

  2. Recommendation in the face of increasing storage costs:
    Faced with a €2 increase in storage costs, it would be wise to re-evaluate the selling price or look for cost reductions elsewhere to preserve the margin.

Formulas Used:

Title Formulas
Margin rate ((PV HT – PA HT) ÷ PA HT) x 100
Brand taxes ((PV HT – PA HT) ÷ PV HT) x 100
PV including tax PV HT x (1 + VAT)
Unit margin PV HT – PA HT
Overall margin Unit margin x Quantity sold

Application: Tech-Innovation Workshop

States :

The “Tech-Innovation” workshop produces an innovative charging station at a production cost excluding VAT of €30 and sells it at €50 excluding VAT. The director wants to evaluate various financial aspects to adjust his business strategy. The applicable VAT rate is 20%.

Work to do :

  1. Calculate the margin rate for the charging station.
  2. What is the mark rate?
  3. Determine the selling price including tax.
  4. What is the overall margin if 500 stations are sold per month?
  5. Assess the implications of a 15% discount on the PV HT to stimulate sales.

Proposed correction:

  1. Margin rate:
    Margin rate = ((PV excluding tax – PA excluding tax) ÷ PA excluding tax) x 100
    By replacing:
    ((€50 – €30) ÷ €30) x 100 = 66,67%
    The margin rate for the charging station is 66,67%.

  2. Mark rate:
    Brand rate = ((PV excluding tax – PA excluding tax) ÷ PV excluding tax) x 100
    By replacing:
    ((€50 – €30) ÷ €50) x 100 = 40%
    The markup rate is 40%.

  3. Selling price including VAT:

PV including VAT = PV excluding VAT x (1 + VAT)
PV including tax = €50 x (1 + 0,20) = €60
The sales price including VAT is €60.

  1. Overall margin:
    Unit margin = PV HT – PA HT = €50 – €30 = €20
    Overall margin = €20 x 500 = €10
    The overall monthly margin is €10.

  2. Evaluation of a 15% discount:
    New PV excluding VAT = €50 x (1 – 0,15) = €42,50
    New markup rate = ((€42,50 – €30) ÷ €42,50) x 100 = 29,41%
    A 15% discount would reduce the markup rate to 29,41%, which may require further measures to maintain profitability.

Formulas Used:

Title Formulas
Margin rate ((PV HT – PA HT) ÷ PA HT) x 100
Brand taxes ((PV HT – PA HT) ÷ PV HT) x 100
PV including tax PV HT x (1 + VAT)
Unit margin PV HT – PA HT
Overall margin Unit margin x Quantity sold

Application: Elite Mode

States :

The fashion boutique "Elite" sells an expensive handbag. The purchase cost excluding VAT is €150, while the sale price excluding VAT is €250. The manager wants to carry out precise financial analyses to optimize her margins. The applicable VAT rate is 20%.

Work to do :

  1. Determine the handbag margin rate.
  2. Calculate the markup rate.
  3. What is the selling price including tax of the handbag?
  4. What is the overall margin if 50 bags are sold monthly?
  5. What do you recommend if the market becomes more competitive and forces a price drop?

Proposed correction:

  1. Margin rate:
    Margin rate = ((PV excluding tax – PA excluding tax) ÷ PA excluding tax) x 100
    By replacing:
    ((€250 – €150) ÷ €150) x 100 = 66,67%
    The handbag margin rate is 66,67%.

  2. Mark rate:
    Brand rate = ((PV excluding tax – PA excluding tax) ÷ PV excluding tax) x 100
    By replacing:
    ((€250 – €150) ÷ €250) x 100 = 40%
    The markup rate is 40%.

  3. Selling price including VAT:

PV including VAT = PV excluding VAT x (1 + VAT)
PV including tax = €250 x (1 + 0,20) = €300
The selling price of the handbag including tax is €300.

  1. Overall margin:
    Unit margin = PV HT – PA HT = €250 – €150 = €100
    Overall margin = €100 x 50 = €5
    The overall monthly margin is €5.

  2. Recommendation in a competitive market:
    In a more competitive market, it would be advisable to review marketing strategies, possibly adjust the price, or further enhance the product to maintain sales and profitability.

Formulas Used:

Title Formulas
Margin rate ((PV HT – PA HT) ÷ PA HT) x 100
Brand taxes ((PV HT – PA HT) ÷ PV HT) x 100
PV including tax PV HT x (1 + VAT)
Unit margin PV HT – PA HT
Overall margin Unit margin x Quantity sold

Application: Automobiles Lyon Selection

States :

The company "Automobiles Lyon Sélection" sells an electric car model. The purchase cost excluding VAT of a car is €20, and the sale price excluding VAT is set at €000. The company wants to calculate margins and anticipate the effects on future sales. The applicable VAT rate is 25%.

Work to do :

  1. Calculate the margin rate for this car model.
  2. Determine the markup rate of this car.
  3. What is the sales price including tax?
  4. What would be the overall margin if 40 cars are sold per month?
  5. Consider a scenario if the purchase price increases by 10%. What is the implication on the margin rate?

Proposed correction:

  1. Margin rate:
    Margin rate = ((PV excluding tax – PA excluding tax) ÷ PA excluding tax) x 100
    By replacing:
    ((€25 – €000) ÷ €20) x 000 = 20%
    The margin rate for the car is 25%.

  2. Mark rate:
    Brand rate = ((PV excluding tax – PA excluding tax) ÷ PV excluding tax) x 100
    By replacing:
    ((€25 – €000) ÷ €20) x 000 = 25%
    The markup rate is 20%.

  3. Selling price including VAT:

PV including VAT = PV excluding VAT x (1 + VAT)
PV including tax = €25 x (000 + 1) = €0,20
The selling price including tax is €30.

  1. Overall margin:
    Unit margin = PV HT – PA HT = €25 – €000 = €20
    Total margin = €5 x 000 = €40
    The overall monthly margin is €200.

  2. Implication of an increase in the purchase price:
    New PA HT = €20 x (000 + 1) = €0,10
    New margin rate = ((€25 – €000) ÷ €22) x 000 = 22%
    A 10% increase in the purchase cost significantly reduces the margin rate, requiring a readjustment of prices or costs.

Formulas Used:

Title Formulas
Margin rate ((PV HT – PA HT) ÷ PA HT) x 100
Brand taxes ((PV HT – PA HT) ÷ PV HT) x 100
PV including tax PV HT x (1 + VAT)
Unit margin PV HT – PA HT
Overall margin Unit margin x Quantity sold

Application: BioSanté Pharmacy

States :

The pharmacy "BioSanté" wants to analyze the performance related to an innovative paramedical product. The purchase cost excluding tax is €80, and it is sold for €120 excluding tax. The applicable VAT rate is 5,5%. The objective is to evaluate the performance of the product on the market.

Work to do :

  1. Calculate the margin rate for this product.
  2. What is the mark rate?
  3. Determine the selling price including tax.
  4. If 70 units are sold per month, what is the overall margin?
  5. What would happen if a new tax increased the cost of purchasing by 5%?

Proposed correction:

  1. Margin rate:
    Margin rate = ((PV excluding tax – PA excluding tax) ÷ PA excluding tax) x 100
    By replacing:
    ((€120 – €80) ÷ €80) x 100 = 50%
    The margin rate is 50% for this paramedical product.

  2. Mark rate:
    Brand rate = ((PV excluding tax – PA excluding tax) ÷ PV excluding tax) x 100
    By replacing:
    ((€120 – €80) ÷ €120) x 100 = 33,33%
    The markup rate is 33,33%.

  3. Selling price including VAT:

PV including VAT = PV excluding VAT x (1 + VAT)
PV including tax = €120 x (1 + 0,055) = €126,60
The sales price including VAT is €126,60.

  1. Overall margin:
    Unit margin = PV HT – PA HT = €120 – €80 = €40
    Overall margin = €40 x 70 = €2
    The overall monthly margin is €2.

  2. Consequences of a 5% tax:
    New purchase cost = €80 x (1 + 0,05) = €84
    New margin rate = ((€120 – €84) ÷ €84) x 100 = 42,86%
    A new tax would reduce the margin rate to 42,86%, which could affect profitability.

Formulas Used:

Title Formulas
Margin rate ((PV HT – PA HT) ÷ PA HT) x 100
Brand taxes ((PV HT – PA HT) ÷ PV HT) x 100
PV including tax PV HT x (1 + VAT)
Unit margin PV HT – PA HT
Overall margin Unit margin x Quantity sold

Application: Artisan'Ale Brewery

States :

The "Brasserie Artisan'Ale" wants to evaluate the performance of its new craft beer. The production cost excluding tax of a bottle is €2, and it is sold at €4 excluding tax. The brewery wants to calculate different indicators to adjust its marketing strategy. The applicable VAT rate is 20%.

Work to do :

  1. Calculate the margin rate for beer.
  2. Determine the brand rate of this beer.
  3. What will the sales price including tax be?
  4. For a monthly production of 1000 bottles, what is the overall margin?
  5. Analyze the impact of a marketing campaign that increases demand by 30%, but requires a 10% discount on the pre-tax price.

Proposed correction:

  1. Margin rate:
    Margin rate = ((PV excluding tax – PA excluding tax) ÷ PA excluding tax) x 100
    By replacing:
    ((€4 – €2) ÷ €2) x 100 = 100%
    The margin rate for beer is 100%.

  2. Mark rate:
    Brand rate = ((PV excluding tax – PA excluding tax) ÷ PV excluding tax) x 100
    By replacing:
    ((€4 – €2) ÷ €4) x 100 = 50%
    The markup rate is 50%.

  3. Selling price including VAT:

PV including VAT = PV excluding VAT x (1 + VAT)
PV including tax = €4 x (1 + 0,20) = €4,80
The sales price including VAT is €4,80.

  1. Overall margin:
    Unit margin = PV HT – PA HT = €4 – €2 = €2
    Overall margin = €2 x 1000 = €2
    The overall monthly margin is €2.

  2. Impact of the marketing campaign:
    New PV excluding VAT = €4 x (1 – 0,10) = €3,60
    New unit margin = €3,60 – €2 = €1,60
    New quantity = 1000 x 1,30 = 1300 bottles
    New overall margin = €1,60 x 1300 = €2
    Despite the discount, increased demand is slightly improving the overall margin.

Formulas Used:

Title Formulas
Margin rate ((PV HT – PA HT) ÷ PA HT) x 100
Brand taxes ((PV HT – PA HT) ÷ PV HT) x 100
PV including tax PV HT x (1 + VAT)
Unit margin PV HT – PA HT
Overall margin Unit margin x Quantity sold

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