Summary
Application: Resto Delights
States :
Resto Délices is a charming pizzeria located in the heart of Lyon. To promote its new menu, the company has decided to revise its prices. Currently, the cost of purchasing raw materials for a pizza is €5, and Resto Délices is aiming for a 40% margin on its sales. They also hope to increase their annual turnover by selling 1 additional pizzas this year. The manager wonders about the financial implications of these decisions.
Work to do :
- Calculate the sales price excluding tax (HT) that should be set to obtain a margin rate of 40%.
- Determine the amount including tax for each pizza, knowing that the VAT applied is 5,5%.
- Estimate the additional annual turnover that Resto Délices can expect by selling 1 additional pizzas.
- Calculate the overall expected margin for the additional 1 sales.
- Analyze the potential impact of this increase in sales on the overall profitability of the company.
Proposed correction:
-
To obtain a margin rate of 40%, we use the formula:
Margin rate = ((PV HT – PA HT) ÷ PA HT) x 100.
Reorganizing, PV HT = PA HT x (1 + Margin rate).
This gives: 5 x (1 + 0,40) = €7.
The sales price excluding tax (HT) must be €7 to achieve this margin rate. -
To calculate the amount including tax, we use the formula: VAT inclusive = VAT excluding tax x (1 + VAT rate).
So, 7 x (1 + 0,055) = €7,385, or €7,39 if we round to the nearest cent.
Each pizza therefore costs €7,39 including tax. -
The annual additional turnover is calculated by:
CA = PV HT x quantity.
So, CA = 7 x 1 = €200.
Resto Délices can hope to generate €8 in additional turnover.
-
The overall margin is determined by: Overall margin = Unit margin x quantity sold.
Unit margin = PV HT – PA HT = 7 – 5 = 2 €.
Overall margin = 2 x 1 = €200.
The overall margin expected for these sales is therefore €2. -
The increase in sales can significantly increase the profitability of Resto Délices, because the increase in margin will bring in additional funds while optimizing the use of available resources.
Formulas Used:
| Title | Formulas |
|---|---|
| Margin rate | ((PV HT – PA HT) ÷ PA HT) x 100 |
| PV HT | PA HT x (1 + Margin rate) |
| PV including tax | PV excluding VAT x (1 + VAT rate) |
| CA | PV HT x quantity |
| Overall margin | Unit margin x quantity sold |
Application: Tech'innov
States :
Tech'innov is a Bordeaux-based company specializing in the sale of innovative electronic gadgets. Their latest product, a connected bike, has a supply cost of €350 and a targeted markup rate of 25%. This year, Tech'innov plans to sell 250 units and wants to determine the impacts of these sales.
Work to do :
- Find the selling price excluding VAT to obtain a markup rate of 25%.
- Calculate the sales price including tax, with 20% VAT.
- Estimate the expected revenue for the 250 bikes.
- Calculate the total margin expected for this quantity.
- Analyze how this turnover could influence Tech'innov's future projects.
Proposed correction:
-
To find the selling price excluding tax with a markup rate of 25%, we use:
Mark rate = ((PV HT – PA HT) ÷ PV HT) x 100.
Let PV HT = PA HT ÷ (1 – (Market rate ÷ 100)).
This gives: 350 ÷ (1 – 0,25) = €466,67.
The selling price excluding tax must be €466,67 to reach this markup rate. -
For the amount including tax, we use: VAT inclusive = VAT excluding tax x (1 + VAT rate).
So, 466,67 x (1 + 0,20) = €560.
The sales price including tax therefore amounts to €560 per unit. -
The turnover for 250 bikes:
CA = PV HT x quantity.
CA = 466,67 x 250 = €116.
Tech'innov can expect a turnover of €116.
-
The total margin is:
Unit margin = PV HT – PA HT = 466,67 – 350 = 116,67 €.
Total margin = 116,67 x 250 = €29.
The total expected margin is €29. -
The significant expected turnover could finance future product developments and strengthen Tech'innov's market position.
Formulas Used:
| Title | Formulas |
|---|---|
| Brand taxes | ((PV HT – PA HT) ÷ PV HT) x 100 |
| PV HT | PA HT ÷ (1 – (Market rate ÷ 100)) |
| PV including tax | PV excluding VAT x (1 + VAT rate) |
| CA | PV HT x quantity |
| Total margin | Unit margin x quantity sold |
Application: Ethical Fashion
States :
Mode Éthique, a Parisian ready-to-wear company, promotes a sustainable and fair approach. The company buys eco-friendly dresses at €50 each and aims to achieve a 50% margin. With a planned distribution of 3 dresses this year, they want to estimate the key financial figures.
Work to do :
- Estimate the selling price excluding tax to achieve a margin rate of 50%.
- Calculate the sales price including VAT at 20%.
- Determine the expected annual sales revenue for dresses.
- Calculate the total margin for the 3 dresses sold.
- Assess the impact of these sales on Mode Éthique’s sustainability strategy.
Proposed correction:
-
Let's use the formula:
PV HT = PA HT x (1 + Margin rate).
This gives: 50 x (1 + 0,50) = €75.
The required selling price excluding VAT is €75 per dress. -
For the amount including tax, the formula is:
PV including tax = PV excluding tax x (1 + VAT rate).
So, 75 x (1 + 0,20) = €90.
Each dress will cost €90 including tax. -
Calculation of turnover:
CA = PV HT x quantity.
Turnover = 75 x 3 = €000.
The potential turnover is €225.
-
Calculation of total margin:
Unit margin = PV HT – PA HT = 75 – 50 = 25 €.
Total margin = 25 x 3 = €000.
The total margin is €75. -
The turnover and margin achieved will strengthen Mode Éthique's sustainable strategy, allowing more investment in ecological materials and practices.
Formulas Used:
| Title | Formulas |
|---|---|
| PV HT | PA HT x (1 + Margin rate) |
| PV including tax | PV excluding VAT x (1 + VAT rate) |
| CA | PV HT x quantity |
| Total margin | Unit margin x quantity sold |
Application: Health Nature
States :
Santé Nature is an organic and natural products company based in Nice. Their new detox juice product is purchased at €2 per unit. In order to maintain their competitiveness, they aim for a 35% markup rate. They plan to sell 5 units this year.
Work to do :
- Calculate the selling price excluding tax which would generate a markup rate of 35%.
- Determine the final price including VAT of 5,5%.
- Calculate the expected revenue from these sales.
- Estimate the total expected margin.
- Deduce the potential impact of this article on the ecological image of Santé Nature.
Proposed correction:
-
The calculation formula is:
PV HT = PA HT ÷ (1 – Mark rate).
Gives: 2 ÷ (1 – 0,35) = €3,08.
The required selling price excluding tax is therefore €3,08. -
Calculation for the price including VAT:
PV including tax = PV excluding tax x (1 + VAT rate).
That is 3,08 x (1 + 0,055) = €3,25.
The sales price including tax is therefore €3,25. -
Projected turnover:
CA = PV HT x quantity.
So CA = 3,08 x 5 = €000.
The potential turnover is €15.
-
For the total margin:
Unit margin = PV HT – PA HT = 3,08 – 2 = 1,08 €.
Total margin = 1,08 x 5 = €000.
The total expected margin is €5. -
A product focused on well-being and naturalness reinforces Santé Nature's positioning as an environmentally friendly brand.
Formulas Used:
| Title | Formulas |
|---|---|
| PV HT | PA HT ÷ (1 – Mark rate) |
| PV including tax | PV excluding VAT x (1 + VAT rate) |
| CA | PV HT x quantity |
| Total margin | Unit margin x quantity sold |
Application: InnovLab Software
States :
InnovLab Software, based in Lille, is developing a management application for SMEs. Estimated at a costal development price of €100, it is sold as an annual license. InnovLab is aiming for a margin rate of 000% and plans to sell 60 licenses in the first year.
Work to do :
- Calculate the license price excluding tax to reach the fixed margin rate of 60%.
- Determine the amount including tax for each license with a VAT of 20%.
- What is the total revenue expected with the 50 licenses sold?
- Calculate the total margin obtained if all licenses are sold.
- Comment on the impact of the success of these sales on InnovLab's presence in the software market.
Proposed correction:
-
To calculate the price of the license excluding tax:
PV HT = PA HT ÷ (1 – Margin rate).
€100 ÷ (000 – 1) = €0,60 for total licenses,
Divided by 50: 250 ÷ 000 = €50.
The HT license will be sold for €5. -
To find the price including tax:
PV including tax = PV excluding tax x (1 + VAT rate).
So 5 x (000 + 1) = €0,20.
The sales price including tax is therefore €6. -
Calculation of total turnover:
CA = PV HT x quantity.
Turnover = 5 x 000 = €50.
The expected turnover is €250.
-
To determine the total margin:
Unit margin = PV HT – (total PA ÷ number of licenses) = 5 – 000 = €2,
Total margin = 3 x 000 = €50.
The total expected margin is €150. -
Significant license sales will strengthen InnovLab's position, increasing its credibility among SMEs and helping it in future software developments.
Formulas Used:
| Title | Formulas |
|---|---|
| PV HT | PA HT ÷ (1 – Margin rate) |
| PV including tax | PV excluding VAT x (1 + VAT rate) |
| CA | PV HT x quantity |
| Total margin | Unit margin x quantity sold |
Application: Green Energy
States :
Énergie Verte, a renewable energy company in Marseille, is launching a new solar panel. The purchase cost for a panel is €300, with a targeted margin of 45%. Énergie Verte plans to sell 200 units in the first quarter.
Work to do :
- Calculate the selling price excluding tax required for the target margin.
- Determine the cost including tax of a solar panel, taking into account a VAT of 5,5%.
- Estimate the potential revenue for this quarter.
- Calculate the total margin for sales for the quarter.
- Discuss the role of solar panel sales in the sustainable development of Green Energy.
Proposed correction:
-
For the selling price excluding VAT:
PV HT = PA HT ÷ (1 – Margin rate).
300 ÷ (1 – 0,45) = €545,45.
The selling price excluding VAT must be €545,45. -
For the amount including tax:
PV including tax = PV excluding tax x (1 + VAT rate).
So 545,45 x (1 + 0,055) = €575,45.
The sales price including VAT is €575,45. -
Turnover:
CA = PV HT x quantity.
CA = 545,45 x 200 = €109.
The potential turnover is €109.
-
Total margin:
Unit margin = PV HT – PA HT = 545,45 – 300 = 245,45 €,
Total margin = 245,45 x 200 = €49.
The total margin is €49. -
The development of the sale of solar panels contributes to Énergie Verte's environmental commitment while ensuring commercially viable profitability.
Formulas Used:
| Title | Formulas |
|---|---|
| PV HT | PA HT ÷ (1 – Margin rate) |
| PV including tax | PV excluding VAT x (1 + VAT rate) |
| CA | PV HT x quantity |
| Total margin | Unit margin x quantity sold |
Application: Book of Knowledge
States :
Livre de Savoirs is a publishing house in Strasbourg that recently published a new school textbook. The production cost of one copy is €10, with a target markup rate of 20%. The company plans to sell 2 copies.
Work to do :
- Calculate the selling price excluding VAT to achieve the markup rate target.
- Get the amount including VAT for each manual, taking into account 5,5% VAT.
- Estimate the total expected revenue for textbooks.
- Calculate the total potential margin for this post.
- Analyze the effects of these sales on the notoriety and growth of Livre de Savoirs.
Proposed correction:
-
Let's use:
PV HT = PA HT ÷ (1 – Mark rate).
So 10 ÷ (1 – 0,20) = €12,50.
The selling price excluding VAT must be €12,50. -
Price calculation including VAT:
PV including tax = PV excluding tax x (1 + VAT rate).
12,5 x (1 + 0,055) = €13,19.
The sales price including VAT for each manual is €13,19. -
Turnover:
CA = PV HT x quantity.
Turnover = 12,50 x 2 = €000.
The potential turnover is €25.
-
Total margin:
Unit margin = PV HT – PA HT = 12,50 – 10 = 2,50 €,
Total margin = 2,50 x 2 = €000.
The total potential margin is €5. -
The commercial success of these sales could strengthen Livre de Savoirs' position in school publishing while allowing future expansion.
Formulas Used:
| Title | Formulas |
|---|---|
| PV HT | PA HT ÷ (1 – Mark rate) |
| PV including tax | PV excluding VAT x (1 + VAT rate) |
| CA | PV HT x quantity |
| Total margin | Unit margin x quantity sold |
Application: Modern Kitchen
States :
Cuisine Moderne, a kitchen furniture manufacturing company in Nantes, has just launched a new product line. The furniture is sold at a purchase price of €200 per unit. They want to achieve a margin rate of 30%. For their launch, they plan to sell 150 units.
Work to do :
- What is the selling price excluding tax required to achieve this margin rate?
- Calculate the price including VAT, taking into account 20% VAT.
- Estimate the possible revenue for their new product line.
- Calculate the overall margin they hope to generate.
- Deduce the effect of these sales on the brand image of Cuisine Moderne.
Proposed correction:
-
We use the formula:
PV HT = PA HT x (1 + Margin rate).
So 200 x (1 + 0,30) = €260.
The sales price excluding tax to be applied is therefore €260. -
To obtain the price including VAT:
PV including tax = PV excluding tax x (1 + VAT rate).
That is 260 x (1 + 0,20) = €312.
The sales price including VAT is €312. -
For turnover:
CA = PV HT x quantity.
CA = 260 x 150 = €39.
The estimated turnover is €39.
-
The overall margin:
Unit margin = PV HT – PA HT = 260 – 200 = 60 €,
Overall margin = 60 x 150 = €9.
The company hopes to generate an overall margin of €9. -
These sales are expected to enhance Cuisine Moderne's brand image, strengthening its reputation for quality and innovation in the kitchen furniture market.
Formulas Used:
| Title | Formulas |
|---|---|
| PV HT | PA HT x (1 + Margin rate) |
| PV including tax | PV excluding VAT x (1 + VAT rate) |
| CA | PV HT x quantity |
| Overall margin | Unit margin x quantity sold |
Application: Auto Pro
States :
Auto Pro, a car dealership based in Toulouse, specialises in electric vehicles. A model is sold at a cost of €25 and they are aiming for a brand rate of 000%. With a forecast of selling 40 cars this year, they want to determine the key financial aspects.
Work to do :
- Calculate the selling price excluding VAT to achieve a markup rate of 40%.
- Determine the sales price including tax of each vehicle with a VAT of 20%.
- What is the expected annual turnover for these sales?
- Calculate the total expected margin for the 50 cars.
- Analyze how these results could influence Auto Pro's environmental commitment.
Proposed correction:
-
Selling price excluding VAT with markup rate:
PV HT = PA HT ÷ (1 – Mark rate).
25 ÷ (000 – 1) = €0,40.
The required selling price excluding VAT is €41. -
Calculation of the sales price including tax:
PV including tax = PV excluding tax x (1 + VAT rate).
41 x (666,67 + 1) = €0,20.
Each vehicle will be sold for €50 including tax. -
Calculation of turnover:
CA = PV HT x quantity.
CA = 41 x 666,67 = €50.
The expected turnover amounts to €2.
-
Calculation of total margin:
Unit margin = PV HT – PA HT = 41 – 666,67 = €25,
Total margin = 16 x 666,67 = €50.
The total expected margin is €833. -
The strong turnover and profitability from these sales can consolidate Auto Pro's commitment to green technologies and promote expansion into other eco-friendly models.
Formulas Used:
| Title | Formulas |
|---|---|
| PV HT | PA HT ÷ (1 – Mark rate) |
| PV including tax | PV excluding VAT x (1 + VAT rate) |
| CA | PV HT x quantity |
| Total margin | Unit margin x quantity sold |