Welcome to this article on exercises on business calculations and more precisely on 11 training exercises to know how to calculate a percentage drop in turnover. Here you will find no less than 11 detailed corrected management exercises on commercial calculations for Operational Management.
At the end of this article, you will know how to calculate a percentage drop in turnover without any hassle.
In this section:
- Application: Chauss’Sport
- Application: Flam’Co company
- Application: Value Supermarket
- Application: Dupont Bakery
- Application: PanoramaTech Company
- Application: Fashion store “FashionMakers”
- Application: ABG Solutions
- App: BlueTech Inc
- Application: Boutique Chic
- Application: TechnoGadget Company
- Application: Belmont Chocolate Factory
Application: Chauss’Sport
States :
Chauss’Sport is a store selling sporting goods established for around ten years. In 2020, due to the COVID-19 pandemic and the health measures imposed, the store experienced a significant drop in its turnover.
Here are some key figures from the company:
– 2019 turnover: €1
– Turnover for 2020: €960
Work to do:
1. Calculate the drop in turnover in euros for the year 2020 compared to 2019.
2. Calculate the drop in turnover as a percentage for the year 2020 compared to 2019.
3. If Chauss’Sport had managed to maintain its 2019 turnover despite the pandemic, what would have been the growth rate of 2020 turnover?
4. Assuming that sales returned to normal in 2021, and that they even increased by 10% compared to 2019, what would Chauss’Sport’s turnover be in 2021?
5. If the VAT rate is 20%, how much should Chauss’Sport pay to the State in 2021 assuming that the planned turnover is reached?
Proposed correction:
1. The decrease in turnover in euros for the year 2020 compared to 2019 is €1 – €200 = €000.
2. The decrease in turnover as a percentage for the year 2020 compared to 2019 is ((€1 – €200) ÷ €000) x 960 = 000%.
3. If Chauss'Sport had managed to maintain its 2019 turnover despite the pandemic, the 2020 turnover growth rate would have been 0%, because there would have been no growth in the figure business compared to 2019.
4. If sales returned to normal in 2021 and even increased by 10% compared to 2019, Chauss’Sport’s turnover in 2021 would be €1 x 200 = €000.
5. If the VAT rate is 20%, Chauss’Sport should pay back to the State in 2021 the amount of €1 x 320% = €000.
Summary of Formulas Used:
| Fall in turnover in euros | Old AC – New AC |
| Percentage drop in turnover | ((old CA – new CA) ÷ old CA) x 100 |
| Revenue growth rate | (new CA ÷ old CA) x 100 |
| Expected turnover with an increase | Old turnover x (1 + rate of increase/100) |
| Amount of VAT to be repaid | Expected turnover x VAT rate |
Application: Flam’Co company
States :
The Flam’Co company is a company specializing in the sale of clothing for women and men. It has experienced difficult times recently and wishes to assess the impact of this drop on its turnover.
Here is some information available over two periods:
1 year:
– Turnover: €650
2 year:
– Turnover: €520
Work to do :
Q1. Calculate the drop in turnover in euros.
Q2. What percentage does this decrease represent?
Q3. What would have been the turnover for year 2 if the company had not experienced this decline?
Q4. What would have been the turnover for year 2 if the company had managed to limit this drop to 10%?
Q5. How many euros did the Flam’Co company lose compared to what it should have gained if it had limited the reduction to 10%?
Proposed correction:
Q1. The drop in turnover is equal to: Turnover year 1 – Turnover year 2 = €650 – €000 = €520.
Q2. The percentage of this reduction is calculated as follows: (Reduction in turnover ÷ Turnover year 1) x 100 = (€130 ÷ €000) x 650 = 000%.
Q3. Without this drop, the turnover for year 2 would have been the same as that for year 1, i.e. €650.
Q4. If the company had limited this reduction to 10%, the turnover for year 2 would have been: Turnover for year 1 – 10% of the turnover for year 1 = €650 – ( 000/10 x €100) = €650.
Q5. Compared to what the company should have gained if it had limited the reduction to 10%, it lost: €585 – €000 = €520.
Summary of Formulas Used:
Decrease in turnover = Turnover year 1 – Turnover year 2
Percentage of decrease = (Reduction in turnover ÷ Turnover year 1) x 100
Turnover with a limited decline = Turnover year 1 – Limit percentage of decline x Turnover year 1
Losses versus limited decline = Revenue with limited decline – Current revenue for year 2.
Application: Value Supermarket
States :
Value Supermarket is a well-established supermarket chain for decades. Recently, the company has suffered a significant decline in sales due to increased competition and changes in consumer behavior. In 2019, Supermarché de la Valeur had a turnover (CA) of €5. In 000, turnover fell to €000.
Work to do :
1. What is the percentage drop in turnover of Value Supermarket from 2019 to 2020?
2. If Value Supermarket wants to regain its 2019 revenue by increasing its prices, by how much should it increase its prices in 2021, assuming that the number of products sold remains the same as in 2020?
3. What would be the potential profit or loss to the company if it increased its prices as indicated in question 2, assuming a constant profit margin of 20% of turnover?
4. Why might a company lose sales if it raises its prices too much?
5. What can Supermarché de la Valeur do differently to increase its turnover?
Proposed correction:
1. The formula for calculating the percentage drop in turnover is: ((old turnover – recent turnover) ÷ old turnover) x 100. Therefore, the percentage drop is: ((€5 – €000 000 €) ÷ 4 €) x 200 = 000%.
2. To regain 2019 turnover by increasing its prices, Supermarché de la Valeur should increase its prices by ((€5 – €000) ÷ €000) x 4 = 200% . This would be a significant increase.
3. If the company increased its prices as indicated in question 2, the profit margin would remain the same, i.e. 20%. Therefore, the potential profit would be €5 x 000 = €000.
4. A company can lose sales if it raises its prices too much because it can dissuade customers from purchasing their products. Consumers have a limited budget and are price sensitive. If prices are too high, they can choose cheaper alternatives.
5. While increasing prices is an option for Value Supermarket, the company could also consider other strategies to increase its revenue. For example, the company could focus on developing new products, offering better customer services, or implementing effective marketing strategies.
Summary of Formulas Used:
| Formulas | Explanation |
|---|---|
| ((old CA – recent CA) ÷ old CA) x 100 | This formula allows you to calculate the percentage drop in turnover. |
| ((Target turnover – Recent turnover) ÷ Recent turnover) x 100 | This formula makes it possible to determine the necessary percentage increase in sales prices to achieve a target turnover. |
| CA x Margin rate | This formula allows you to calculate the profit. |
Application: Dupont Bakery
States :
Boulangerie Dupont is a family business that offers different types of breads, pastries and pastries. Unfortunately, the company experienced a significant drop in its turnover during 2021.
The values of their turnover for the years 2020 and 2021 are as follows:
– 2020 turnover: €150
– 2021 turnover: €128
The owner of Boulangerie Dupont asks you to evaluate the situation and provide precise data regarding this decrease.
Work to do :
1. Calculate the amount of the drop in turnover in 2021 compared to 2020.
2. Calculate the percentage of turnover decline in 2021 compared to 2020.
3. Estimate turnover in 2022 if this downward trend continues at the same pace.
4. Estimate the turnover to be achieved in 2022 to compensate for the decline of the last two years.
5. Propose actions to increase turnover and compensate for the sudden drop.
Proposed correction:
1. The amount of the drop in turnover is calculated by subtracting the turnover of 2021 from the turnover of 2020. That is: €150 – €000 = €128
2. The percentage drop is calculated by dividing the drop in turnover by the turnover of the previous year and multiplying by 100. That is: (€22 ÷ €000) x 150 = 000%
3. If this downward trend continues at the same pace, turnover in 2022 will be reduced by 14,67% compared to that of 2021. That is: €128 – (€000 x 128%) = 000 €14,67
4. To compensate for the decline of the last two years, it would be necessary to generate a turnover higher than that of 2022 in 2020. By adding the total drop to the turnover of 2020, we obtain: €150 + €000 = €22
5. In order to increase turnover, Dupont Bakery could implement several measures, for example: improve their marketing techniques, introduce new products, offer special promotions, increase the visibility of their business online, invest in staff training to improve customer service, etc.
Summary of Formulas Used:
| Formulas | Description |
|---|---|
| Turnover of year n – Turnover of year n-1 | Calculation of the amount of the drop in turnover |
| ((Turnover of year n – Turnover of year n-1) ÷ Turnover of year n-1) x 100 | Calculation of the percentage drop in turnover |
| Turnover for the current year – (turnover for the current year x percentage drop) | Prediction of next year's turnover based on current decline |
| Turnover of year n-1 + total decrease | Calculation of the turnover to be achieved to compensate for the drop |
Application: PanoramaTech Company
States :
The PanoramaTech Company is a company active in the technology sector. Over the last two financial years (2019 and 2020), it has recorded a significant drop in sales. The turnover achieved in 2019 amounted to €7 and that of 500 reached €000.
Work to do :
1. Calculate the drop in PanoramaTech’s turnover in figures (value) between 2019 and 2020.
2. Calculate the percentage drop in PanoramaTech's revenue between 2019 and 2020.
3. If PanoramaTech forecasts a 6% increase in 2021 revenue compared to 2020, what would this revenue be?
4. What would be the percentage drop in turnover in 2021 compared to 2019 if this forecast came true?
5. In the event that PanoramaTech wishes to return to its 2019 turnover in 2021, by what percentage should the 2021 turnover increase compared to that of 2020?
Proposed correction:
1. The calculation of the decrease in turnover between 2019 and 2020 is done by subtracting the turnover of 2020 from that of 2019. That is: €7 – €500 = €000 .
2. The calculation of the percentage drop is done by dividing the drop in turnover by the turnover of the reference year (2019 in our case), then multiplying the result by 100. That is: (1 000€ ÷ 000€) x 7 = 500%.
3. The forecast turnover for 2021 can be obtained by adding 2020% of the latter to that of 6. That is: €6 + 500% x €000 = €6.
4. To calculate the drop in turnover in 2021 compared to 2019, you must first calculate the amount of the drop (€7 – €500) or €000. Then we apply the same formula as before to obtain the percentage: (€6 ÷ €890) x 000 = 610%.
5. To return to 2019 turnover, the company will have to achieve an increase of: (€7 – €500) ÷ €000 x 6 = 500%.
Summary of Formulas Used:
| Packages | Explanations |
|---|---|
| Decrease in Turnover = Initial Turnover – Final Turnover | Calculate the decrease in figures (value) of turnover |
| Percentage reduction = (Reduction in turnover ÷ Initial turnover) x 100 | Calculate the percentage drop in turnover |
| Forecast turnover = turnover + (6% x turnover) | Calculate the forecast turnover in the event of an increase |
Application: Fashion store “FashionMakers”
States :
Fashion Boutique “FashionMakers” is an expert company in luxury fashion and fashion accessories. In the first half of 2021, it achieved a turnover of €120. Unfortunately, in the second half of 000, the store experienced a decline in performance and it was only able to achieve a turnover of €2021.
Work to do :
1. What was the total turnover for the year 2021?
2. What was the drop in turnover, in value, between the first and second half-years?
3. How to calculate this percentage drop?
4. What is the percentage drop in turnover between these two semesters?
5. What would have been the turnover for the second half if the fall was 30% compared to the first half?
Proposed correction:
1. The total turnover for the year 2021 is obtained by adding the turnover of the first half and that of the second half: €120 + €000 = €100.
2. The drop in turnover, in value, between the first and second half of the year is calculated by subtracting the turnover of the second half of the year from the turnover of the first half of the year: €120 – €000 = 100 000 €.
3. To calculate this drop in percentage, we divide the drop in turnover by the turnover for the first half of the year then we multiply the result by 100. The formula is therefore: Decrease in % = (Decrease in turnover sales / First half turnover) x 100.
4. By applying the formula given in the previous question, we find that the drop is (€20 / €000) x 120 = 000% between the first and second semester.
5. If the fall was 30% compared to the first half, we would have the turnover for the second half which would be: Turnover for the first half – (30% of the turnover for the first half) or 120 €000 – (30/100 x €120) = €000.
Summary of Formulas Used:
| Total turnover | First half turnover + Second half turnover |
| Decrease in turnover, in value | First half turnover – Second half turnover |
| Decrease in turnover, in percentage | (Reduction in turnover / First half turnover) x 100 |
| Second half turnover if the fall is 30% | First half turnover – (30/100 x first half turnover) |
Application: ABG Solutions
States :
ABG Solutions is a technology company which achieved a turnover of €7 in 000. But in 000, due to the health crisis and the upheaval of its activities, the company achieved a turnover which amounted to only €2019.
Work to do :
1. What was the turnover of ABG Solutions in 2020 compared to the previous year?
2. How can we express this difference in terms of drop in turnover?
3. What is the percentage drop in the company's turnover in 2020 compared to 2019?
4. If this trend of declining revenue continues in 2021 in the same manner, what would be the company's expected revenue for this year?
5. How can the company use this information to improve its financial performance?
Proposed correction:
1. The turnover of ABG Solutions decreased from €7 to €000 in 000, a decrease of €5.
2. This difference can be expressed as a drop in turnover of €1.
3. The percentage drop in turnover can be calculated using the following formula: ((initial turnover – final turnover) ÷ initial turnover) x 100). Here, ((€7 – €000) ÷ €000) x 5 = 500%. Therefore, the company's turnover decreased by 000% in 7 compared to 000.
4. If this trend continues, the 2021 turnover could be €5 – (500% of €000) = €21,43.
5. The company can use this information to understand the extent of its revenue decline and identify areas where it can reduce costs or increase sales to improve its financial performance.
Summary of Formulas Used:
| Concept | Formulas |
|---|---|
| Decline in turnover | Initial turnover – Final turnover |
| Percentage drop | ((Initial turnover – Final turnover) ÷ Initial turnover) x 100 |
| Expected turnover | Final turnover – (Percentage reduction x final turnover) |
App: BlueTech Inc
States :
BlueTech Inc, a major company in the field of information technology, had an exceptional year in 2020 with a turnover of €5. In 000, due to various factors including the economic impact of the COVID-000 pandemic and increased competition in the market, their turnover decreased to €2021.
Work to do :
1. Calculate the drop in turnover in euros.
2. Calculate the drop in turnover as a percentage.
3. If the company had forecast a turnover of €5 for 500, what is the deviation in euros from the forecast?
4. Calculate this deviation as a percentage.
5. What could be a strategy for the company to increase its turnover?
Proposed correction:
1. The drop in turnover is calculated by subtracting the turnover of 2021 from that of 2020. So, the drop in turnover = Turnover of 2020 – Turnover of 2021 = 5 €000 – €000 = €4
2. Percentage revenue decline is calculated by dividing revenue decline by initial revenue and then multiplying by 100. So Percentage revenue decline = (Drop of turnover ÷ Initial turnover) x 100 = (€800 ÷ €000) x 5 = 000%
3. The deviation from the forecast is calculated by subtracting the actual revenue from the forecast. So, the deviation = Forecast – Actual turnover = €5 – €500 = €000
4. Percentage deviation is calculated by dividing the deviation by the forecast and then multiplying by 100. So, the percentage deviation = (Deviation ÷ Forecast) x 100 = (€1 ÷ €300) x 000 = 5%
5. A possible strategy to increase turnover could be to launch new products or services, enter new markets, increase marketing to reach new customers, or work on product improvement to increase the loyalty rate of existing customers.
Summary of Formulas Used:
| Formulas | Meaning |
|---|---|
| Decline in turnover = 2020 turnover – 2021 turnover | Calculation of the drop in turnover in euros |
| Decrease in turnover in % = (Decrease in turnover ÷ Initial turnover) x 100 | Calculation of the drop in turnover as a percentage |
| Deviation = Forecast – Actual turnover | Calculation of deviation from forecast in euros |
| Deviation in % = (Deviation ÷ Forecast) x 100 | Calculation of deviation from forecast in percentage |
Application: Boutique Chic
States :
La Boutique Chic is a company specializing in the sale of luxury women's clothing. In 2020, turnover amounted to €250. Following the Covid-000 pandemic and the various periods of confinement which had a major impact on commerce, the company experienced a difficult year in 19. Turnover in 2021 fell to €2021.
Work to do :
1. Calculate the absolute drop in turnover between 2020 and 2021.
2. Calculate the decrease in turnover as a percentage compared to 2020.
3. If the store plans a 15% increase in turnover for the year 2022, what will the new turnover be?
4. In 2022, if Boutique Chic wants to return to at least the same turnover as in 2020, by how much should the 2021 turnover increase as a percentage?
5. The owner of Boutique Chic is considering a 20% discount on all merchandise. What will be the minimum turnover for the following year to compensate for this reduction and maintain the same turnover as in 2021?
Proposed correction:
1. The reduction in absolute value: €250 – €000 = €190. The drop in turnover for Boutique Chic between 000 and 60 is €000.
2. For the percentage reduction: (€60 ÷ €000) x 250 = 000%. The drop in turnover is 100%.
3. For a turnover increased by 15% in 2022: €190 x 000 = €1,15. The expected turnover for 218 is €500.
4. To find the turnover for 2020: ((€250 – €000) ÷ €190) x 000 = 190%. The 000 turnover must increase by around 100% to reach that of 31,58.
5. Taking into account the 20% reduction: €190 ÷ (000 – 1) = €0,20. To maintain the same turnover despite a 237% reduction on all goods, the minimum turnover for the following year must be €500.
Summary of Formulas Used:
| Formulas | Explanation |
|---|---|
| Initial turnover – Final turnover | This formula is used to calculate the absolute difference between two turnover figures. |
| (Difference in turnover ÷ Initial turnover) x 100 | This formula is used to calculate the percentage change between two turnovers. |
| Revenue x (1 + growth rate) | This formula is used to calculate new revenue after a given growth. |
| ((Targeted turnover – Current turnover) ÷ Current turnover) x 100 | This formula is used to determine the percentage increase needed to reach a certain turnover. |
| Current turnover ÷ (1 – reduction rate) | This formula is used to determine the minimum turnover that must be achieved to maintain current turnover despite a discount on all merchandise. |
Application: TechnoGadget Company
States :
The company TechnoGadget, specializing in the distribution of high-tech accessories, has had a difficult year. Due to various reasons, including increased competition and lower demand due to economic instability, the company has seen a decline in revenue.
At the start of the year, TechnoGadget's turnover was €5. By the end of the year, turnover had dropped to €000.
Work to do :
1. Calculate the amount of the drop in turnover.
2. Calculate the drop in turnover as a percentage. What was the percentage drop in turnover?
3. If the trend of declining turnover continues at this rate, what would be the turnover forecast for the next year?
4. How much would revenue need to increase next year to return to this year’s revenue levels?
5. What percentage increase would be needed to return to this year’s revenue levels?
Proposed correction:
1. The drop in turnover is calculated as follows: Initial turnover – Final turnover = €5 – €000 = €000. Thus, the company TechnoGadget experienced a drop in turnover of €4.
2. The percentage drop in turnover is given by the formula: (decrease in turnover ÷ initial turnover) x 100 = (€500 ÷ €000) x 5 = 000%. TechnoGadget therefore experienced a 000% drop in turnover.
3. If this 10% decline trend continues, next year's turnover would be: this year's turnover – 10% of this year's turnover = €4 – €500 = €000.
4. To return to this year's turnover, the company TechnoGadget should increase its turnover by: €5 – €000 = €000 next year.
5. The percentage increase needed to return to this year's turnover would be: (Necessary increase in turnover ÷ next year's turnover) x 100 = (€950 ÷ 000 4 €) x 050 = 000%.
Summary of Formulas Used:
| Concept | Formulas |
|---|---|
| Calculation of the drop in turnover | Initial turnover – Final turnover |
| Percentage drop in turnover | (Reduction in turnover ÷ Initial turnover) x 100 |
| Forecast next year's revenue based on current trend | This year’s revenue – Percentage decline in revenue x This year’s revenue |
| Necessary increase in turnover to return to this year’s level | This year’s turnover – Projected turnover for next year |
| Percentage increase needed to return to this year’s turnover | (Necessary increase in turnover ÷ Next year’s turnover) x 100 |
Application: Belmont Chocolate Factory
States :
Chocolaterie Belmont, located in Belgium, is an artisanal company specializing in the manufacture and sale of high-end chocolates. Unfortunately, despite its exceptional quality, it experienced a drop in turnover during its last semester.
It posted a turnover of €240 for the previous semester, and a turnover of €000 for the current semester.
The manager of the Belmont Chocolate Factory, keen to understand this decline, consults you as an expert in financial management to help him resolve the following questions:
Work to do :
1. What is the drop in absolute value in the turnover of Chocolaterie Belmont over these two half-years?
2. How to calculate the percentage of this reduction?
3. What is the percentage of this decrease?
4. What does this decline mean for the company?
5. What could be the factors behind this decline and how could the company react?
Proposed correction:
1. The decrease in absolute value is calculated by subtracting the turnover of the current semester from that of the previous semester. Or: €240 – €000 = €205
2. To calculate the percentage drop, we use the following formula: (Drop ÷ Turnover for previous half year) x 100
3. Using the formula above, we obtain: (€35 ÷ €000) x 240 = 000%. The drop in turnover is therefore 100%.
4. This 14.58% drop means the company sold significantly fewer products this year compared to the previous year. It is crucial for the manager to understand the reasons for this fall in order to take the necessary measures and reverse this trend.
5. Several factors could explain this drop in turnover: a reduction in demand, an increase in competition, poor inventory management or an unsuitable pricing strategy. The company could respond by reviewing its pricing strategy, strengthening its marketing efforts, or seeking to reduce costs to improve its margin while maintaining competitive prices.
Summary of Formulas Used:
| Indicator | Formulas |
|---|---|
| Decrease in absolute value | CA previous semester – CA current semester |
| Percentage drop | (Drop ÷ Turnover previous semester) x 100 |