In this section:
Application: The Modern Bakery
States :
La Boulangerie Moderne, located in the heart of Paris, is renowned for its authentic croissants made using the most demanding artisanal methods. The purchase price to make a croissant is €0,80 excluding VAT. The baker wants to achieve a specific margin rate to optimize his profits. You are responsible for determining the excluding VAT sale price that will achieve this objective.
Work to do :
- Calculate the selling price excluding tax to achieve a margin rate of 50%.
- What will the selling price excluding tax be if the baker only wants a margin rate of 30%?
- If the selling price excluding tax is set at €1,60, what is the margin rate achieved?
- Analyze the impact on the margin if the purchase price increases by 10% but the selling price excluding tax remains unchanged.
- Advise the baker on an optimal excluding tax sales price strategy if his purchase price regularly increases by 5% per quarter.
Proposed correction:
-
To calculate the selling price excluding VAT, we use the formula:
PV HT = PA HT x (1 + Margin rate).
By replacing, €0,80 x (1 + 0,50) = €1,20.
The selling price excluding tax should therefore be €1,20 to achieve a margin rate of 50%. -
Let's still use the formula PV HT = PA HT x (1 + Margin rate).
Substituting for a rate of 30%, €0,80 x (1 + 0,30) = €1,04.
The selling price excluding tax will be €1,04 for a margin rate of 30%. -
The margin rate is calculated by ((PV HT – PA HT) ÷ PA HT) x 100.
Here, ((€1,60 – €0,80) ÷ €0,80) x 100 = 100%.
Therefore, the margin rate achieved with a sale price of €1,60 is 100%.
-
If the purchase price increases to €0,88 (10% increase), but the sale price remains at €1,60,
the margin rate becomes: ((€1,60 – €0,88) ÷ €0,88) x 100 = 81,82%.
The increase in the purchase price reduces the margin. -
One strategy for the baker could be to review his selling price excluding VAT quarterly. Taking into account the 5% increase in the purchase cost, adjusting the selling price to maintain the desired margin will be crucial.
Formulas Used:
| Title | Formulas |
|---|---|
| Calculation of PV HT | PV excluding tax = PA excluding tax x (1 + Margin rate) |
| Margin Rate Calculation | Margin rate = ((PV excluding tax – PA excluding tax) ÷ PA excluding tax) x 100 |
App: TechZone Gadgets
States :
TechZone Gadgets, a company specializing in the sale of electronic gadgets, wants to analyze its margins on a portable charger model. Currently, the purchase price excluding VAT of a charger is €15. To maximize its profits, the company evaluates different pricing strategies excluding VAT.
Work to do :
- Determine the selling price excluding tax to achieve a margin of 40%.
- If TechZone wants to offer a 10% discount on the net selling price, at what net amount should it set the initial price to maintain a 25% margin after the discount?
- What is the margin rate if the selling price excluding tax is set at €21?
- TechZone is considering increasing its purchase price by 8%. Analyze the impact on the current margin with the sales price excluding VAT unchanged at €21.
- Suggest a pricing strategy if the competition is selling at 5% lower prices.
Proposed correction:
-
Let's use the formula to reach the target margin: PV HT = PA HT x (1 + Margin rate).
Replacing, €15 x 1,40 = €21.
The selling price excluding tax must be €21 to achieve a margin of 40%. -
First, we must determine the price without discount to maintain a margin of 25% after a 10% discount.
The final price = PA HT x (1 + Margin rate) ÷ 0,90.
Replacing, Initial price = €15 x 1,25 ÷ 0,90 = €20,83.
The initial price excluding VAT should be €20,83. -
Let’s calculate the margin rate with a net sales price of €21:
((€21 – €15) ÷ €15) x 100 = 40%.
So the margin rate is 40%.
-
If the purchase price increases to €16,20 (8% increase), with the same sale price of €21,
the new margin is: ((€21 – €16,20) ÷ €16,20) x 100 = 29,63%.
The increase reduces the margin by more than 10%. -
TechZone may consider adjusting its pricing strategy by offering differentiated features or strengthening its marketing campaign to strategically justify a higher price.
Formulas Used:
| Title | Formulas |
|---|---|
| Calculation of PV HT | PV excluding tax = PA excluding tax x (1 + Margin rate) |
| Calculation of the initial price with reduction | Initial price = PA HT x (1 + Margin rate) ÷ Reduction |
| Margin Rate Calculation | Margin rate = ((PV excluding tax – PA excluding tax) ÷ PA excluding tax) x 100 |
Application: Orchid Florist
States :
Orchidée Florist located in a large city, seeks to optimize its margin strategies on its floral arrangements. The purchase price excluding tax of flowers for a composition is set at €12. The manager wishes to anticipate its sales prices for various customer margin scenarios.
Work to do :
- Find the selling price excluding tax required to obtain a margin of 60%.
- If the manager wants a margin rate of 75%, what will the new selling price excluding tax be?
- Determine the margin rate achieved if the selling price excluding tax is set at €30.
- How does the possible 15% increase in the purchase price affect the margin, with the selling price excluding tax at €30?
- In the face of climate change impacting purchasing costs, advise on adapting sales prices and margins.
Proposed correction:
-
Let’s calculate the selling price excluding tax for a margin of 60%:
PV HT = PA HT x (1 + Margin rate).
Replacing, €12 x 1,60 = €19,20.
The selling price excluding VAT should be €19,20. -
For a margin rate of 75%, the calculation gives:
PV excluding tax = €12 x 1,75 = €21.
The selling price excluding tax should be €21 to reach this margin. -
The margin rate with a selling price excluding tax of €30 is calculated by:
((€30 – €12) ÷ €12) x 100 = 150%.
The margin is substantially high.
-
A 15% increase in the purchase price brings it to €13,80, hence the new margin with a selling price excluding tax of €30:
((€30 – €13,80) ÷ €13,80) x 100 = 117,39%.
Although the impact is notable, the margin rate remains high at 117,39%. -
Due to fluctuations in purchasing costs due to climatic conditions, Orchidée Fleuriste may adopt a flexible or seasonal sales pricing policy to maintain its target margins.
Formulas Used:
| Title | Formulas |
|---|---|
| Calculation of PV HT | PV excluding tax = PA excluding tax x (1 + Margin rate) |
| Margin Rate Calculation | Margin rate = ((PV excluding tax – PA excluding tax) ÷ PA excluding tax) x 100 |
Application: Mediterranean Flavors
States :
Saveurs Méditerranéennes, a company that imports gourmet products, adjusts its margins according to the market for its new premium olive oils. The purchase price of a liter of olive oil is €9 excluding VAT. You are asked to evaluate different margin strategies.
Work to do :
- Calculate the selling price excluding VAT for a target margin of 55%.
- What would be the selling price excluding tax if the desired margin rises to 120%?
- Analyze the margin rate if the selling price excluding tax is applied at €20.
- If the upstream purchase price fluctuates by 20%, what is the new margin with the unchanged selling price excluding tax at €20?
- Suggest a pricing approach if Saveurs Méditerranéennes decides to enter a very competitive market.
Proposed correction:
-
For a margin of 55%, the formula is:
PV HT = PA HT x (1 + Margin rate).
Replacing, €9 x 1,55 = €13,95.
The selling price excluding VAT should be €13,95. -
With a margin of 120%, we have:
PV excluding tax = €9 x 2,20 = €19,80.
The selling price excluding tax would be €19,80 to achieve this margin. -
The margin rate with a net selling price of €20 is:
((€20 – €9) ÷ €9) x 100 = 122,22%.
This reveals that the margin is significant.
-
Increasing the purchase price by 20% to €10,80, then the margin with a sale price of €20 becomes:
((€20 – €10,80) ÷ €10,80) x 100 = 85,19%.
The impact of cost variation reduces the margin. -
To enter a competitive market, Saveurs Méditerranéennes could offer small quantities at reduced prices or advantageous lots while maintaining accessibility to their premium products.
Formulas Used:
| Title | Formulas |
|---|---|
| Calculation of PV HT | PV excluding tax = PA excluding tax x (1 + Margin rate) |
| Margin Rate Calculation | Margin rate = ((PV excluding tax – PA excluding tax) ÷ PA excluding tax) x 100 |
Application: Mondial'Lingua Language School
States :
As a dynamic language school, Mondial'Lingua constantly reviews its course prices to maximize both its margins and its international accessibility. The production cost of a course book is €18 excluding VAT. The school seeks to adjust its margins for different markets.
Work to do :
- What selling price excluding tax should it adopt for a margin of 70%?
- Determine the selling price required for a 90% margin rate.
- If Mondial'Lingua sets the price of textbooks at €35 excluding VAT, what margin is generated?
- Study the consequences of a 12% drop in the purchase price on the margin rate, while maintaining the selling price excluding tax at €35.
- How could the school structure a competitive sales price in the face of online training platforms approaching with similar offers?
Proposed correction:
-
To adopt a price with a margin of 70%, let's use:
PV HT = PA HT x (1 + Margin rate).
Replacing, €18 x 1,70 = €30,60.
The price should be set at €30,60 excluding VAT. -
For a margin rate of 90%, the formula gives:
PV excluding tax = €18 x 1,90 = €34,20.
Therefore, €34,20 excluding VAT would be necessary. -
Setting the price at €35, the margin rate is:
((€35 – €18) ÷ €18) x 100 = 94,44%.
This represents a comfortable margin.
-
If the purchase price drops to €15,84 (12% discount), the margin rate becomes:
((€35 – €15,84) ÷ €15,84) x 100 = 120,95%.
A reduction alternately transforms the margin. -
With the arrival of online competitors, Mondial'Lingua must explore hybrid services combining economic advantage with digital and face-to-face formats to remain attractive.
Formulas Used:
| Title | Formulas |
|---|---|
| Calculation of PV HT | PV excluding tax = PA excluding tax x (1 + Margin rate) |
| Margin Rate Calculation | Margin rate = ((PV excluding tax – PA excluding tax) ÷ PA excluding tax) x 100 |
Application: Eco Chic Fashion
States :
Mode Eco Chic, an ambitious brand operating in the sustainable fashion sector, processes its orders by integrating a constant search for optimizing its margins. The cost of purchasing an organic cotton dress is €30 excluding VAT. The financial department ensures that efficient sales prices are adjusted.
Work to do :
- Calculate the selling price excluding tax corresponding to a margin of 45%.
- If the ambition is to achieve a net margin of 100%, what should the selling price excluding VAT be?
- What margin is made if the selling price excluding tax of the dress is set at €72?
- Consider the impact of increasing purchasing costs by 10% while maintaining a selling price excluding VAT at €72.
- Recommend to Mode Eco Chic a sustainable pricing strategy in the context of increasing demand for ethical fashion.
Proposed correction:
-
For a margin of 45%, following the formula:
PV HT = PA HT x (1 + Margin rate).
Replacing, €30 x 1,45 = €43,50.
The selling price excluding VAT is €43,50. -
The objective of a 100% profit margin is demonstrated by:
PV excluding tax = €30 x 2 = €60.
This condition therefore sets at €60 excluding VAT. -
The margin for a selling price excluding tax of €72 is analyzed as follows:
((€72 – €30) ÷ €30) x 100 = 140%.
The margin is substantial and valued.
-
If the purchase charge increases to €33, then the margin becomes:
((€72 – €33) ÷ €33) x 100 = 118,18%.
The impact on the margin, while significant, remains profitable. -
With a growing craze for ethical fashion, an inclusive strategy could include cost transparency initiatives while displaying a clarified business model.
Formulas Used:
| Title | Formulas |
|---|---|
| Calculation of PV HT | PV excluding tax = PA excluding tax x (1 + Margin rate) |
| Margin Rate Calculation | Margin rate = ((PV excluding tax – PA excluding tax) ÷ PA excluding tax) x 100 |
Application: Road Machines
States :
Machines de la Route, a supplier of technical equipment for vehicles, is analyzing the profits on its spare parts to align recognized quality with economic viability. The purchase price of a central part is €50 excluding tax. The company aims to improve its price lists.
Work to do :
- What is the selling price needed to achieve a 65% margin?
- To achieve a 150% margin, what should be the excluding tax sales price strategy?
- By selling at €120 excluding VAT per part, what margin rate did Machines de la Route obtain?
- Evaluate the implications of a 25% increase in production costs while the selling price remains at €120 excluding VAT.
- In a highly regulated sector, offer prices aligned with profitability while preserving a reputation for reliability.
Proposed correction:
-
For a margin of 65%, we adhere to the formula:
PV HT = PA HT x (1 + Margin rate).
Here, €50 x 1,65 = €82,50.
The selling price excluding tax is set at €82,50. -
For ambitious margins of 150%, here are:
PV excluding tax = €50 x 2,50 = €125.
A price optimally determined at €125 excluding VAT. -
Let’s calibrate the margin with a selling price excluding tax of €120:
((€120 – €50) ÷ €50) x 100 = 140%.
The margin is thus pleasantly high.
-
A growth in expenses to €62,50 affects the margin as follows:
((€120 – €62,50) ÷ €62,50) x 100 = 91,43%.
The margin rate is narrowing but remains satisfactory. -
To cultivate economic sustainability in the face of heavy regulations, Machines de la Route could develop partnerships and robust customer loyalty through long-term strategic promotions.
Formulas Used:
| Title | Formulas |
|---|---|
| Calculation of PV HT | PV excluding tax = PA excluding tax x (1 + Margin rate) |
| Margin Rate Calculation | Margin rate = ((PV excluding tax – PA excluding tax) ÷ PA excluding tax) x 100 |
Application: Light Technology
States :
Lumière Technologie, a thriving company in LED lighting, wants to ensure a continuous adaptation of its margin policies for its flagship lamp model. The purchase price excluding tax is €28. The management consults you in order to master all future profitability scenarios.
Work to do :
- Calculate the selling price excluding VAT to obtain a margin of 85%.
- If management wants to further increase this margin to 110%, what will be the corresponding selling price excluding tax?
- If a lamp is sold at €60 excluding VAT, evaluate the margin generated.
- Keeping the selling price excluding tax at €60, how is the margin affected by a 12% increase in the purchase price?
- Suggest a way to improve the profitability of the headlight model in the face of an increase in raw materials influencing the purchase price.
Proposed correction:
-
For a margin of 85%, apply:
PV HT = PA HT x (1 + Margin rate).
Substituting here, €28 x €1,85 = €51,80.
The selling price excluding tax is €51,80. -
With a target of 110% desired margin:
PV excluding tax = €28 x 2,10 = €58,80.
A price to be effectively defined at €58,80 excluding VAT. -
Let's evaluate the margin at a selling price excluding tax of €60 by:
((€60 – €28) ÷ €28) x 100 = 114,29%.
The margin produced is solid.
-
With an increase bringing the purchase price to €31,36, the margin becomes:
((€60 – €31,36) ÷ €31,36) x 100 = 91,32%.
Repeated, profitability remains intact. -
Having a production integrating economies of scale and a stylized range can strengthen Lumière Technologie in the face of nested rising pricing dynamics.
Formulas Used:
| Title | Formulas |
|---|---|
| Calculation of PV HT | PV excluding tax = PA excluding tax x (1 + Margin rate) |
| Margin Rate Calculation | Margin rate = ((PV excluding tax – PA excluding tax) ÷ PA excluding tax) x 100 |
Application: Urban Vertical Garden
States :
Jardin Vertical Urbain enchants the city with its eco-friendly installations, cleverly revising its sales techniques through the margins on its gardening sets. Each set comes at a purchase price of €40 excluding VAT. A calculated approach is necessary to transcend the growing competition.
Work to do :
- What selling price excluding tax is sufficient to obtain a margin of 55%?
- Aiming for a remarkable margin of 200%, what consultations for the selling price excluding VAT should you carry out?
- If Jardin Vertical Urbain sets its sets at €150 excluding VAT, what result do we obtain regarding the margin?
- Consider the effects of a 20% increase in the purchase price on the margin rate while the sale price remains €150 excluding VAT.
- What adjustments to the pricing model and strategy do you recommend in light of sustainability trends and urban preferences?
Proposed correction:
-
To perform a 55% margin capture:
PV HT = PA HT x (1 + Margin rate).
Let's replace, €40 x 1,55 = €62.
The quotation concludes at €62 excluding VAT. -
Aiming for 200% improvement requires:
PV excluding tax = €40 x 3 = €120.
The generated 120 € excluding tax would reflect the dynamism. -
Marketing at €150 allows:
((€150 – €40) ÷ €40) x 100 = 275%.
A conclusive solidity on abundant margins.
-
An increase bringing the cost to €48 will offer:
((€150 – €48) ÷ €48) x 100 = 212,50%.
By contiguity, the stakes remain considerable. -
In order to respond promptly to the new inclinations of society, more communication regarding the impact and materials used would surely contribute to increased efficiency.
Formulas Used:
| Title | Formulas |
|---|---|
| Calculation of PV HT | PV excluding tax = PA excluding tax x (1 + Margin rate) |
| Margin Rate Calculation | Margin rate = ((PV excluding tax – PA excluding tax) ÷ PA excluding tax) x 100 |