Welcome to this article on exercises on business calculations and more specifically on 11 simple business calculation exercises. Here you will find no less than 11 detailed corrected management exercises on business calculations for Operational Management.
At the end of this article, you will know how to achieve a unit margin, an overall margin, a PV excluding tax, a PV including tax, a margin rate, a brand rate, a turnover excluding tax and including tax without any worries.
In this section:
- Application: The Parisian Attic
- Application: TechnoShop
- Application: ElectroShop
- Application: TechnoGadgets
- Application: Tech Pens
- Application: Dynamo Bike Shop
- Application: Styles & Co Company
- Application: GLC Fashions
- Application: House of Bread
- Application: Plaza Company
- Application: Local Delights Grocery Store
Application: The Parisian Attic
States :
The company Le Grenier Parisien is a shop specializing in the sale of vintage objects. It buys items from individuals and resells them to other individuals looking for old products to decorate their homes. Among the items sold there are paintings, furniture, and even period decorative objects.
The manager of the company notices an increase in sales in certain product categories. This is the case for old paintings, where he has noticed a clear increase in customer interest. To evaluate the performance of this product category, he has gathered the following information:
– Purchase price excluding tax of a painting: €100
– Additional costs for the restoration of the painting: €30
– Sale price excluding tax of a painting: €200
– Quantity of paintings sold: 50
– Applicable VAT rate: 20%
Work to do :
1. Calculate the unit margin on a table.
2. Calculate the overall margin on the tables.
3. Calculate the company's margin rate on the tables.
4. Calculate the company's markup rate on the tables.
5. Calculate the company's turnover excluding tax and the turnover including tax.
Proposed correction:
1. The unit margin is calculated by subtracting the item's purchase cost excluding VAT from the selling price excluding VAT, here €200 – €100 – €30 = €70. Therefore, the unit margin for a painting is €70.
2. The overall margin is found by multiplying the unit margin by the quantity sold, here €70 x 50 = €3500. Therefore, the overall margin on the paintings is €3500.
3. The margin rate is determined by dividing the unit margin by the purchase price excluding tax and then multiplying the total by 100, here ((70€ ÷ (100€ + 30€)) x 100) = 46,67%. Therefore, the margin rate on the tables is 46,67%.
4. The markup rate is obtained by dividing the unit margin by the selling price excluding VAT and then multiplying the result by 100, here ((€70 ÷ €200) x 100) = 35%. Therefore, the markup rate on the tables is 35%.
5. The turnover excluding tax is found by multiplying the quantity sold by the sale price excluding tax, here 50 x €200 = €10. As for the turnover including tax, it is obtained by adding the VAT on the turnover excluding tax (here 000% of €20 = €10), i.e. €000 + €2000 = €10. Therefore, the turnover excluding tax is €000 and the turnover including tax is €2000.
Summary of Formulas Used:
| Concept | Formula applied |
|---|---|
| Unit Margin | PV HT – PA HT – Additional costs |
| Overall Margin | Unit margin x quantity sold |
| Margin rate | ((PV HT – PA HT) ÷ PA HT) x 100 |
| Brand taxes | ((PV HT – PA HT) ÷ PV HT) x 100 |
| Turnover excluding tax | PV HT x Quantity sold |
| Turnover including tax | CA excluding VAT + (CA excluding VAT x VAT rate) |
Application: TechnoShop
States :
TechnoShop is a company specializing in the sale of technological equipment. The company's Financial Management Manager provided the following financial information for the month of March: The Purchase Price excluding VAT of a laptop is €500, the Quantity Sold is 1000 units and the VAT Rate is 20%. The Sale Price excluding VAT has been set so that the Margin Rate is 30%.
Work to do :
1. Calculate the unit margin.
2. Calculate the overall margin.
3. Calculate the Selling Price excluding VAT.
4. Calculate the Selling Price including VAT.
5. Calculate the turnover excluding and including VAT.
Proposed correction:
1. Unit margin = Margin rate x Purchase price excluding tax = 0,30 x €500 = €150.
2. Overall margin = Unit margin x Quantity sold = €150 x 1000 = €150.
3. Selling price excluding tax = Purchase price excluding tax + Unit margin = €500 + €150 = €650.
4. Sales price including tax = Sales price excluding tax + (Sales price excluding tax x VAT rate) = €650 + (€650 x 0,20) = €780.
5. Turnover excluding tax = Selling price excluding tax x Quantity sold = €650 x 1000 = €650.
Turnover including tax = Selling price including tax x Quantity sold = €780 x 1000 = €780.
Summary of Formulas Used:
| Unit margin | Margin rate x Purchase price excluding tax |
| Overall margin | Unit margin x Quantity sold |
| Sale price excl. VAT | Purchase price excluding tax + unit margin |
| Sales price including tax | Selling price excluding VAT + (Selling price excluding VAT x VAT rate) |
| Turnover excluding tax | Selling price excluding VAT x Quantity sold |
| Turnover including tax | Selling price including tax x Quantity sold |
Application: ElectroShop
ElectroShop is a company that specializes in the sale of household appliances.
States :
The company recently launched a new product on the market, a food processor, at a purchase price excluding tax (PA HT) of €200 and is sold at a sales price excluding tax (PV HT) of €400. During the year, the company sold 1000 units of this product.
Work to do :
1. Calculate the unit margin of this product.
2. What is the overall margin obtained?
3. Calculate the margin rate and markup rate of the product.
4. What is the turnover excluding and including VAT?
5. How much does the company earn for each euro of turnover?
Proposed correction:
1. The unit margin is calculated by subtracting the purchase price excluding tax (PA HT) from the sale price excluding tax (PV HT). Here, the unit margin = PV HT – PA HT or €400 – €200 = €200.
2. The overall margin is the equivalent of multiplying the unit margin by the quantity sold. In this example, the overall margin = Unit margin x quantity sold or €200 x 1000 = €200.
3. The margin rate is calculated using the formula: ((PV HT – PA HT) ÷ PA HT) x 100 for a percentage. Here, the margin rate = ((€400 – €200) ÷ €200) x 100 = 100%. The markup rate is calculated using the formula ((PV HT – PA HT) ÷ PV HT) x 100 for a percentage. Here, the markup rate = ((€400 – €200) ÷ €400) x 100 = 50%.
4. The turnover excluding tax (CA HT) is the result of multiplying the sales price excluding tax (PV HT) by the quantity sold. Here, the CA excluding tax = PV excluding tax x quantity sold, i.e. €400 x 1000 = €400. To find the turnover including all taxes (CA TTC), you must add the taxes to the CA excluding tax. Here the rate is 000%, so the CA TTC = CA excluding tax x (20 + VAT rate) i.e. €1 x (400 + 000%) = €1.
5. The profit for each euro of turnover is found by dividing the overall margin by the turnover excluding tax. Here, it is €200 ÷ €000 = €400. For each euro of turnover, the company earns €000.
Summary of Formulas Used:
| Concept | Formulas |
|---|---|
| Unit margin | PV HT – PA HT |
| Overall margin | Unit margin x quantity sold |
| Margin rate | ((PV HT – PA HT) ÷ PA HT) x 100 |
| Brand taxes | ((PV HT – PA HT) ÷ PV HT) x 100 |
| Turnover excluding tax | PV HT x quantity sold |
| Turnover including tax | CA excluding VAT x (1 + VAT rate) |
| Profit for every euro of turnover | Overall margin ÷ Net turnover |
Application: TechnoGadgets
States :
TechnoGadgets is a wholesaler of electronic and computer equipment. As part of its day-to-day operations, it buys and sells different types of gadgets. You are the financial manager of the company and you need to do a detailed analysis of the unit margin, overall margin, selling price excluding tax (SVP HT), selling price including all taxes (SVP TTC), margin rate, brand rate, turnover excluding tax and including tax for the company's flagship product, the DroneX.
Purchase price excluding tax (PA HT) of the DroneX: €200
DroneX quantity sold: 1000 units
Sale price excluding tax (PV HT): €500
VAT rate: 20%
Work to do :
1. Calculate the unit margin for the DroneX.
2. Calculate the overall margin for the DroneX.
3. What is the sales price including all taxes (PV TTC) of the DroneX?
4. What is the DroneX margin rate?
5. What is the markup rate of DroneX?
6. What is the net turnover obtained from the sale of the DroneX?
7. What is the turnover including tax obtained from the sale of the DroneX?
Proposed correction:
1. The unit margin is calculated by the formula: Unit Margin = PV HT – PA HT.
Unit Margin = €500 – €200 = €300.
2. The overall margin is calculated by the formula: Overall Margin = Unit Margin x Quantity Sold.
Global Margin = €300 x 1000 = €300.
3. The VAT-inclusive PV is calculated using the formula: VAT-inclusive PV = VAT-exclusive PV x (1 + (VAT rate / 100)).
PV including tax = €500 x (1 + (20 / 100)) = €600.
4. The margin rate is calculated by the formula: Margin rate = ((PV HT – PA HT) ÷ PA HT) x 100.
Margin rate = ((€500 – €200) ÷ €200) x 100 = 150%.
5. The markup rate is calculated by the formula: Markup rate = ((PV HT – PA HT) ÷ PV HT) x 100.
Markup rate = ((€500 – €200) ÷ €500) x 100 = 60%.
6. The net turnover is calculated using the formula: net turnover = net sales x quantity sold.
Turnover excluding tax = €500 x 1000 = €500.
7. The turnover including tax is calculated using the formula: CA including tax = PV including tax x quantity sold.
CA incl. VAT = €600 x 1000 = €600.
Summary of Formulas Used:
– Unit Margin = PV HT – PA HT.
– Overall Margin = Unit Margin x Quantity Sold.
– PV including VAT = PV excluding VAT x (1 + (VAT rate / 100)).
– Margin rate = ((PV HT – PA HT) ÷ PA HT) x 100.
– Mark rate = ((PV HT – PA HT) ÷ PV HT) x 100.
– CA HT = PV HT x quantity sold.
– CA incl. VAT = PV incl. VAT x quantity sold.
Application: Tech Pens
States :
Stylos Tech, a company specializing in the sale of high-tech pens, sold 1 pens last year at a unit purchase price excluding tax of €000 and a sales price excluding tax of €5. The VAT rate is 15%.
Work to do :
1. What is the company's unit margin on each pen?
2. What is the company's overall margin?
3. What is the margin rate?
4. What is the markup rate?
5. What is the turnover excluding and including tax of the Stylos Tech Company?
Proposed correction:
1. The unit margin is the difference between the selling price excluding VAT and the purchasing price excluding VAT. Therefore, Unit margin = €15 – €5 = €10 per pen.
2. The overall margin is the unit margin multiplied by the quantity sold. Therefore, Overall margin = €10 x 1 = €000.
3. The margin rate is the ratio between the margin on purchase cost and the purchase price. Therefore, Margin rate = (10 € ÷ 5 €) x 100 = 200%.
4. The markup rate is the ratio between the margin on purchase cost and the selling price excluding VAT. Therefore, Markup rate = (€10 ÷ €15) x 100 = 66,67%.
5. The net sales figure is the product of the net sales price times the quantity sold. Therefore, Net sales figure = €15 x 1 = €000. To obtain the net sales figure, VAT is added to the net sales figure. Therefore, Net sales figure = €15 x (000 + 15%) = €000.
Application: Dynamo Bike Shop
States :
The Dynamo bike shop sells mountain bikes. The purchase price of a bike excluding VAT is €300. It sells each bike with a margin of €100. The VAT rate is 20%. The shop sold 50 bikes this month.
Work to do :
1) What is the selling price excluding tax of a bicycle?
2) What is the selling price including tax of a bicycle?
3) What is the margin and markup rate?
4) What is the turnover amount excluding tax and including all taxes for this month?
5) What is the amount of the overall margin?
Proposed correction:
1) The selling price excluding tax of a bicycle is the purchase price excluding tax to which the margin is added. Therefore, PV excluding tax = PA excluding tax + Margin = €300 + €100 = €400.
2) The sales price including tax is the sales price excluding tax multiplied by (1 + VAT rate). Therefore, PV including tax = PV excluding tax x (1 + VAT rate) = €400 x (1 + 20/100) = €480.
3) The margin rate is calculated by subtracting the purchase price excluding tax from the sale price excluding tax, divided by the purchase price excluding tax, multiplied by 100. Therefore, Margin rate = ((PV excluding tax – PA excluding tax) ÷ PA excluding tax) x 100 = ((€400 – €300) ÷ €300) x 100 = 33,33%. The markup rate is calculated by subtracting the purchase price excluding tax from the sale price excluding tax, divided by the sale price excluding tax, multiplied by 100. Therefore, Markup rate = ((PV excluding tax – PA excluding tax) ÷ PV excluding tax) x 100 = ((€400 – €300) ÷ €400) x 100 = 25%.
4) The turnover excluding tax is the sales price excluding tax multiplied by the quantity sold. Therefore, turnover excluding tax = PV excluding tax x Quantity Sold = €400 x 50 = €20. The turnover including all taxes is the turnover excluding tax multiplied by (000 + VAT rate). Therefore, turnover including tax = turnover excluding tax x (1 + VAT rate) = €1 x (20 + 000/1) = €20.
5) The overall margin is the unit margin multiplied by the quantity sold. Therefore, Overall margin = Unit margin x Quantity sold = €100 x 50 = €5.
Summary of Formulas Used:
| Concept | Formulas |
|---|---|
| Unit margin | MU = PV HT – PA HT |
| Overall margin | MG = Unit margin x quantity sold |
| Margin rate | Tm = ((PV HT – PA HT) ÷ PA HT) x 100 |
| Brand taxes | Tk = ((PV HT – PA HT) ÷ PV HT) x 100 |
| Selling price excluding tax | PV excluding tax = PA excluding tax + Margin |
| Sales price including tax | PV including VAT = PV excluding VAT x (1 + VAT rate) |
| Turnover excluding tax | CA HT = PV HT x quantity sold |
| Turnover including tax | CA incl. VAT = CA excl. VAT x (1 + VAT rate) |
Application: Styles & Co Company
Styles & Co, a clothing and fashion accessories retailer, is seeking to improve its understanding of its financial operational management. The management control manager provides the following information on one of its flagship products, a pair of well-known branded jeans:
– Purchase Price Excluding Tax (PA HT): €60
– Quantity Sold: 200 units
– Sale Price excluding Tax (PV HT): €100
– VAT rate: 20%
States :
Given this information, the management controller needs help in analyzing the performance of this product.
Work to do :
1. Calculate the unit margin of this product.
2. Calculate the overall margin obtained by the company on this product.
3. How to go from the Selling Price excluding VAT to the Selling Price including VAT? Calculate the Selling Price including VAT.
4. How to calculate the margin rate? Calculate the margin rate on this product.
5. How to calculate the markup rate? Calculate the markup rate on this product.
Proposed correction:
1. The unit margin is calculated as the difference between the Selling Price excluding VAT (PV HT) and the Purchase Price excluding VAT (PAHT). In our case, the unit margin is therefore €100 – €60, i.e. €40.
2. The overall margin is calculated by multiplying the unit margin by the quantity sold. So in our case, it is €40 x 200 or €8.
3. The Sales Price including VAT is obtained by adding VAT (20% of the VAT excluding VAT) to the VAT excluding VAT. So here, VAT excluding VAT = €100 + (20% x €100) or €120.
4. The margin rate is calculated by taking the difference between the PV HT and the PA HT, which is divided by the PA HT, the whole multiplied by 100. In our case, the margin rate is ((100 € – 60 €) ÷ 60 €) x 100 or approximately 66,67%.
5. The markup rate is calculated by taking the difference between the PV excluding tax and the PA excluding tax, which is divided by the PV excluding tax, the whole multiplied by 100. In our case, the markup rate is therefore ((€100 – €60) ÷ €100) x 100 or 40%.
Summary of Formulas Used:
| Indicator | Formula used |
|---|---|
| Unit margin | Unit margin = PV excluding tax – PA excluding tax |
| Overall margin | Overall margin = Unit margin x quantity sold |
| PV including tax | PV including VAT = PV excluding VAT + (VAT x PV excluding VAT) |
| Margin rate | Margin rate = ((PV excluding tax – PA excluding tax) ÷ PA excluding tax) x 100 |
| Brand taxes | Brand rate = ((PV excluding tax – PA excluding tax) ÷ PV excluding tax) x 100 |
Application: GLC Fashions
States :
The company GLC Fashions sells luxury t-shirts. Their purchase price excluding taxes (PA HT) is €50. They decide to sell each t-shirt with a unit margin of €30. The company sells 200 t-shirts in one month.
Work to do :
1. Calculate the sales price excluding tax (SRP HT) for a t-shirt.
2. Calculate the sales price including VAT for a t-shirt (consider the VAT rate at 20%).
3. Calculate the overall margin for the month.
4. Calculate the margin rate for a t-shirt.
5. Calculate the turnover excluding and including VAT for the month.
Proposed correction:
1. The sales price excluding tax (SRP HT) for a t-shirt is calculated by adding the unit margin to the purchase price excluding tax. Therefore, SRP HT = €50 + €30 = €80.
2. The sales price including VAT for a t-shirt is calculated by adding VAT (20% of the VAT excluding VAT) to the VAT excluding VAT. Therefore, VAT excluding VAT = €80 x (1 + 20%) = €96.
3. The overall margin for the month is the product of the unit margin by the quantity sold, i.e. Overall margin = €30 x 200 = €6000.
4. The margin rate is ((PV HT – PA HT) ÷ PA HT) x 100. Therefore, Margin rate = ((80 € – 50 €) ÷ 50 €) x 100 = 60%.
5. The net sales figure for the month is the product of the quantity sold by the net sales figure, i.e. net sales figure = 200 x €80 = €16000. The net sales figure is net sales figure x (1 + VAT rate = 20%), i.e. net sales figure = €16000 x (1 + 20%) = €19200.
Summary of Formulas Used:
- PV excluding tax = PA excluding tax + Unit margin
- PV including VAT = PV excluding VAT x (1 + VAT rate)
- Overall margin = Unit margin x Quantity sold
- Margin rate = ((PV excluding tax – PA excluding tax) ÷ PA excluding tax) x 100
- Net sales turnover = Quantity sold x Net sales
- Turnover including tax = Turnover excluding tax x (1 + VAT rate)
Application: House of Bread
States :
La Maison du Pain is a bakery that sells baguettes of bread at a purchase price excluding VAT of €0,80 and a sale price excluding VAT of €1,00. The quantity of baguettes sold each day is 200. The VAT rate is 5,5%.
Work to do :
1) What is the unit margin per baguette?
2) What is the overall margin each day?
3) What is the turnover excluding and including VAT each day?
4) What are the margin and markup rates?
5) If Maison du Pain wishes to increase its unit margin to €0,30 per baguette, what will be the new selling price excluding and including VAT?
Proposed correction:
1) The unit margin per baguette is calculated as the difference between the selling price excluding VAT and the purchasing price excluding VAT. Therefore, Unit margin = PV excluding VAT – PA excluding VAT = €1,00 – €0,80 = €0,20.
2) The overall margin is obtained by multiplying the unit margin by the quantity sold. That is, Overall margin = Unit margin x quantity sold = €0,20 x 200 = €40,00.
3) The turnover excluding tax is the product of the quantity sold and the selling price excluding tax. Therefore, turnover excluding tax = PV excluding tax x quantity sold = €1,00 x 200 = €200,00. The turnover including tax is the product of the quantity sold and the selling price including tax. That is, turnover including tax = PV including tax x quantity sold = €1,00 x (1 + 0,055) x 200 = €211,00.
4) The margin rate is calculated by the formula ((PV HT – PA HT) ÷ PA HT) x 100, or ((€1,00 – €0,80) ÷ €0,80) x 100 = 25%. The markup rate is calculated by ((PV HT – PA HT) ÷ PV HT) x 100, or ((€1,00 – €0,80) ÷ €1,00) x 100 = 20%.
5) If Maison du Pain wishes to increase its unit margin to €0,30, the new selling price excluding VAT will be PA excluding VAT + Unit margin = €0,80 + €0,30 = €1,10. The new selling price including VAT will be PV excluding VAT x (1 + VAT rate) = €1,10 x (1 + 0,055) = €1,16.
Summary of Formulas Used:
| Concept | Formulas |
|---|---|
| Unit Margin | Unit Margin = PV HT – PA HT (Sales price excluding tax – Purchase price excluding tax) |
| Overall Margin | Overall Margin = Unit Margin x Quantity Sold |
| Selling price excluding tax | PV excluding tax = PA excluding tax + Unit margin |
| Sales price including tax | PV including VAT = PV excluding VAT x (1 + VAT rate) |
| Margin rate | Margin Rate = ((PV HT – PA HT) ÷ PA HT) x 100 |
| Brand taxes | Mark Rate = ((PV HT – PA HT) ÷ PV HT) x 100 |
| Turnover excluding tax | CA HT = PV HT x Quantity sold |
| Turnover including tax | CA incl. VAT = PV incl. VAT x Quantity sold |
Application: Plaza Company
States :
Plaza is a company specializing in the sale of office furniture. It recently acquired a new range of ergonomic chairs at a unit purchase price excluding tax (PTP HT) of €100. After a market study, the sales price excluding tax (STP HT) was set at €140.
The applicable value added tax (VAT) is 20%.
Work to do :
1. What is the unit margin made by the company on the sale of each chair?
2. If Plaza Company sells 100 chairs, what is the overall margin?
3. What is the selling price including tax of each chair?
4. What are the margin and markup rates respectively?
5. What are the sales figures excluding and including VAT if 100 chairs are sold?
Proposed correction:
1. The unit margin is obtained by subtracting the purchase price excluding VAT from the sale price excluding VAT. Therefore, Unit margin = PV excluding VAT – PA excluding VAT = €140 – €100 = €40.
2. The overall margin is obtained by multiplying the unit margin by the quantity sold. Therefore, Overall margin = Unit margin x Quantity sold = €40 x 100 = €4.
3. The VAT-inclusive PV is obtained by adding the VAT (calculated as a percentage of the VAT-exclusive PV) to the VAT-exclusive PV. Therefore, VAT-inclusive PV = VAT-exclusive PV + (VAT-exclusive PV x VAT rate) = €140 + (€140 x 20/100) = €168.
4. The margin rate is calculated by the formula ((PV HT – PA HT) ÷ PA HT) x 100, or ((140 € – 100 €) ÷ 100 €) x 100 = 40%. The markup rate is calculated by the formula ((PV HT – PA HT) ÷ PV HT) x 100, or ((140 € – 100 €) ÷ 140 €) x 100 = 28,57%.
5. The turnover excluding tax is obtained by multiplying the PV excluding tax by the quantity sold, i.e. €140 x 100 = €14. The turnover including tax is obtained by multiplying the PV including tax by the quantity sold, i.e. €000 x 168 = €100.
Summary of Formulas Used:
| Description | Formulas |
|---|---|
| Unit margin | PV HT – PA HT |
| Overall margin | Unit margin x Quantity sold |
| PV including tax | PV HT + (PV HT x VAT rate/100) |
| Margin rate | ((PV HT – PA HT) / PA HT) x 100 |
| Brand taxes | ((PV HT – PA HT) / PV HT) x 100 |
| Turnover excluding tax | PV HT x Quantity sold |
| Turnover including tax | PV incl. VAT x Quantity sold |
Application: Local Delights Grocery Store
Summary of Formulas Used:
States :
Delices du Terroir is a small grocery store that sells local products. Its flagship product is a farmhouse cheese for which the purchase price excluding tax (PA HT) is €5 and the sale price excluding tax (PV HT) is €10. The quantity sold is 200 cheeses. Delices du Terroir is subject to a VAT rate of 20%.
Work to do :
1. Calculate the unit margin of Delices du Terroir.
2. Calculate the overall margin of Delices du Terroir.
3. Determine the margin rate and the markup rate.
4. Estimate the turnover excluding tax (HT) and including all taxes (TTC).
5. Let's say they want to increase their margin rate by 5%, how much should their new PV excluding tax be?
Proposed correction:
1. The unit margin is calculated by subtracting the PV HT from the PA HT. Therefore the unit margin is €10 – €5 = €5.
2. The overall margin is calculated by multiplying the unit margin by the quantity sold. Therefore, overall margin = €5 x 200 = €1000.
3. The margin rate is calculated by doing ((PV HT – PA HT) / PA HT) x 100%. Therefore, margin rate = ((10 € – 5 €) / 5 €) x 100% = 100%. And, the markup rate is calculated by doing ((PV HT – PA HT) / PV HT) x 100%. Therefore, markup rate = ((10 € – 5 €) / 10 €) x 100 = 50%.
4. The turnover excluding VAT is calculated by PV excluding VAT x Quantity sold. Therefore, CA excluding VAT = €10 x 200 = €2000. The turnover including VAT is calculated by (PV excluding VAT x VAT rate) x Quantity sold. Therefore, CA including VAT = (€10 x 1,2) x 200 = €2400.
5. To increase their margin rate by 5%, they would have to increase their PV HT so as to obtain a new margin rate of 105%. Using the margin rate formula, we find that the new PV HT should be: PV HT = PA HT + (PA HT x 1,05) = €5 + (€5 x 1,05) = €10,25.
Summary of Formulas Used:
| Formulas | Description |
| VAT rate = 20% | 5,5% | Indicates the percentage of VAT applied. For catering it is 20%, and for other goods/services it is 5,5%. |
| Overall margin = Unit margin x quantity sold | Calculates the total profit after selling all products. |
| Margin rate = ((PV excluding tax – PA excluding tax) ÷ PA excluding tax) x 100) | Calculates the percentage of profit compared to the initial purchase cost. |
| Brand rate = ((PV excluding tax – PA excluding tax) ÷ PV excluding tax) x 100) | Calculates the percentage of profit compared to the resale cost. |
| Net sales = Net sales x Quantity sold | Total sales excluding tax. |
| Turnover including tax = (PV excluding tax x VAT rate) x Quantity sold | Total sales, including taxes. |