commercial-calculation-exercise-table

commercial calculation exercise table | 9 Exercises

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Application: Modes & Styles

States :

The company Modes & Styles specializes in women's ready-to-wear clothing. It wants to evaluate the profitability of two of its flagship products in order to adjust its commercial strategy. The first product, a dress, is sold at a sales price excluding tax (SRP HT) of €60 with a purchase price excluding tax (PP HT) of €40. The second product, a handbag, is sold at a SRP excluding tax of €90 and a PP excluding tax of €55.

Work to do :

  1. Calculate the dress's markup rate.
  2. Calculate the brand rate of the handbag.
  3. Estimate the total margin generated by the sales of 300 dresses.
  4. If Modes & Styles wants to achieve a 30% markup rate for the dress, what should the new selling price excluding VAT be?
  5. Analyze the strategic implications of these results for the company.

Proposed correction:

  1. Dress margin rate:
    The margin rate formula is ((PV HT – PA HT) ÷ PA HT) x 100.
    Substituting with the values: ((60 – 40) ÷ 40) x 100 = 50%.
    The dress generates a margin rate of 50%.

  2. Handbag brand rate:
    The formula for the markup rate is ((PV HT – PA HT) ÷ PV HT) x 100.
    Substituting with the values: ((90 – 55) ÷ 90) x 100 = 38,89%.
    The brand rate of the handbag is 38,89%.

  3. Total margin for 300 dresses:

The unit margin is PV HT – PA HT, i.e. 60 – 40 = €20.
For 300 dresses, the total margin is €20 x 300 = €6.
Modes & Styles generates a total margin of €6 on these sales.

  1. New selling price excluding VAT to reach a mark-up rate of 30%:
    We use the formula: PV HT = PA HT ÷ (1 – Markup rate).
    Replacing: 40 ÷ (1 – 0,30) = €57,14.
    The new selling price excluding VAT should be €57,14 to achieve a mark-up rate of 30%.

  2. The strategic implications:
    Modes & Styles achieves attractive margins on its products, but could increase its competitiveness and profits by optimizing its prices to achieve its markup rate targets.

Formulas Used:

Title Formulas
Margin rate ((PV HT – PA HT) ÷ PA HT) x 100
Brand taxes ((PV HT – PA HT) ÷ PV HT) x 100
Unit margin PV HT – PA HT
Total margin Unit Margin x Quantity
New selling price excluding VAT (mark-up rate) PA HT ÷ (1 – Mark rate)

Application: TechnoWorld

States :

TechnoWorld is a distributor of electronic equipment that offers a new digital tablet to its customers. The sales price excluding tax (PV HT) of the tablet is €320 while the purchase price excluding tax (PA HT) is €250. The company expects a seasonal sale of 500 units.

Work to do :

  1. Calculate the tablet margin rate.
  2. Determine the tablet's markup rate.
  3. Calculate the total margin expected for the season.
  4. To increase its profitability, TechnoWorld is considering lowering its purchasing cost by 10%. What would be the new purchase price excluding VAT?
  5. Discuss the strategies that TechnoWorld could adopt to remain competitive in the market.

Proposed correction:

  1. Tablet Margin Rate:
    Let's use the formula ((PV HT – PA HT) ÷ PA HT) x 100.
    Substituting the values: ((320 – 250) ÷ 250) x 100 = 28%.
    The tablet's margin rate is 28%.

  2. Tablet brand rate:
    Let us apply the formula ((PV HT – PA HT) ÷ PV HT) x 100.
    Substituting the values: ((320 – 250) ÷ 320) x 100 = 21,88%.
    The tablet's markup rate is 21,88%.

  3. Total margin for the season:

The unit margin is PV HT – PA HT, i.e. 320 – 250 = €70.
For 500 units, the total margin is €70 x 500 = €35.
The total margin expected for the season is €35.

  1. New purchase price excluding VAT with a 10% reduction:
    The new PA HT = initial PA HT x (1 – 0,10).
    Replacing: 250 x 0,90 = €225.
    The new purchase price excluding VAT would be €225.

  2. TechnoWorld Strategies:
    By optimizing costs and monitoring technology trends, TechnoWorld can strengthen its position and attract more customers while improving 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
Unit margin PV HT – PA HT
Total margin Unit Margin x Quantity
New purchase price excluding VAT with reduction Initial HT PA x (1 – reduction percentage)

Application: Gourmet Evasion

States :

Gourmet Evasion, a high-end catering company, wants to evaluate the financial potential of its gourmet takeaway meals. Each meal is sold at a sales price excluding tax of €48, with a production cost excluding tax of €30. The estimated demand is 200 meals per month.

Work to do :

  1. Calculate the margin rate on meals.
  2. Determine the meal markup rate.
  3. Calculate the total monthly margin.
  4. If the production cost increases by 15%, what would be the new production cost excluding tax?
  5. Consider the possible implications of this cost increase on Gourmet Evasion's business.

Proposed correction:

  1. Margin rate on meals:
    The formula is ((PV HT – PA HT) ÷ PA HT) x 100.
    Replacing: ((48 – 30) ÷ 30) x 100 = 60%.
    The margin rate on meals is 60%.

  2. Meal markup rate:
    The formula is ((PV HT – PA HT) ÷ PV HT) x 100.
    Replacing: ((48 – 30) ÷ 48) x 100 = 37,5%.
    The meal mark rate is 37,5%.

  3. Total monthly margin:

Unit margin = PV excluding tax – PA excluding tax or 48 – 30 = €18.
For 200 meals, the total margin is €18 x 200 = €3.
The total monthly margin is €3.

  1. New production cost excluding tax with an increase of 15%:
    New cost excluding tax = Initial cost excluding tax x (1 + 0,15).
    Replacing: 30 x 1,15 = €34,50.
    The new production cost excluding tax would be €34,50.

  2. Implications for Gourmet Evasion:
    The increase in production cost could affect profitability and require a price readjustment or process optimization to maintain service quality.

Formulas Used:

Title Formulas
Margin rate ((PV HT – PA HT) ÷ PA HT) x 100
Brand taxes ((PV HT – PA HT) ÷ PV HT) x 100
Unit margin PV HT – PA HT
Total margin Unit Margin x Quantity
New production cost excluding tax with increase Initial cost excluding tax x (1 + percentage increase)

Application: Bio Beauty

States :

Bio Beauty, a specialist in natural cosmetics, is offering a gift set comprising three products. The selling price excluding VAT is €75 and the purchase cost excluding VAT for the set is €50. The company wants to assess its margins before launching a marketing campaign.

Work to do :

  1. Calculate the margin rate of the gift set.
  2. Determine the markup rate of this set.
  3. Calculate the total margin if Bio Beauty plans to sell 400 sets.
  4. What would the PV excluding tax be if Bio Beauty increased its markup rate to 40%?
  5. Issue recommendations to maximize margins after this analysis.

Proposed correction:

  1. Gift set margin rate:
    Formula: ((PV HT – PA HT) ÷ PA HT) x 100.
    Replacement: ((75 – 50) ÷ 50) x 100 = 50%.
    The margin rate is 50%.

  2. Overall mark rate:
    Formula: ((PV HT – PA HT) ÷ PV HT) x 100.
    Replacement: ((75 – 50) ÷ 75) x 100 = 33,33%.
    The markup rate is 33,33%.

  3. Total margin for 400 sets:

Unit margin = 75 – 50 = €25.
For 400 sets, total margin = €25 x 400 = €10.
The total margin would be €10.

  1. New PV HT for a mark rate of 40%:
    Formula: PV HT = PA HT ÷ (1 – Mark rate).
    Replacement: 50 ÷ (1 – 0,40) = €83,33.
    The new PV excluding tax should be €83,33.

  2. Recommendations for Bio Beauty:
    To maximize margins, Bio Beauty could consider attractive promotional campaigns or reduce its production costs while maintaining product quality.

Formulas Used:

Title Formulas
Margin rate ((PV HT – PA HT) ÷ PA HT) x 100
Brand taxes ((PV HT – PA HT) ÷ PV HT) x 100
Unit margin PV HT – PA HT
Total margin Unit Margin x Quantity
New PV HT (brand rate) PA HT ÷ (1 – Mark rate)

Application: Fit & Well

States :

Fit & Well is a gym that offers a monthly premium subscription at €95 excluding VAT to access all its equipment and classrooms. The operating cost per subscriber is €55 excluding VAT per month. The gym wants to understand the profitability of its subscriptions.

Work to do :

  1. Calculate the margin rate of premium subscriptions.
  2. Estimate the markup rate of these subscriptions.
  3. What would be the total margin if Fit & Well has 600 subscribers?
  4. If the goal is to reduce operating costs by €10, what would be the new cost per subscriber?
  5. Evaluate how this data could influence Fit & Well’s pricing strategy.

Proposed correction:

  1. Premium subscription margin rates:
    Formula: ((PV HT – PA HT) ÷ PA HT) x 100.
    Replacement: ((95 – 55) ÷ 55) x 100 = 72,73%.
    The margin rate is 72,73%.

  2. Subscription markup rate:
    Formula: ((PV HT – PA HT) ÷ PV HT) x 100.
    Replacement: ((95 – 55) ÷ 95) x 100 = 42,11%.
    The markup rate is 42,11%.

  3. Total margin for 600 subscribers:

Unit margin = 95 – 55 = €40.
For 600 subscribers, total margin = €40 x 600 = €24.
The total margin is €24.

  1. New cost per subscriber with €10 discount:
    New cost excluding tax = 55 – 10 = 45 €.
    The new cost per subscriber would be €45.

  2. Influence on Fit & Well’s pricing strategy:
    Reducing operating costs can allow for more attractive pricing or improved services, while potentially increasing subscriber numbers.

Formulas Used:

Title Formulas
Margin rate ((PV HT – PA HT) ÷ PA HT) x 100
Brand taxes ((PV HT – PA HT) ÷ PV HT) x 100
Unit margin PV HT – PA HT
Total margin Unit Margin x Quantity
New cost per subscriber with discount Initial cost excluding tax – reduction amount

Application: Solar Solutions

States :

Solar Solutions offers its customers installed solar kits at a selling price excluding VAT of €1. The cost price excluding VAT of each kit is €500. The company plans to sell 1 kits this quarter.

Work to do :

  1. Calculate the margin rate of solar kits.
  2. Determine the markup rate for these kits.
  3. Calculate the total margin expected this quarter.
  4. What would be the cost per kit if the company plans to optimize costs by 5%?
  5. Suggest possible actions to increase the profitability of Solar Solutions.

Proposed correction:

  1. Margin rate of solar kits:
    Formula: ((PV HT – PA HT) ÷ PA HT) x 100.
    Replacement: ((1 – 500) ÷ 1) x 000 = 1%.
    The margin rate is 50%.

  2. Markup rates for kits:
    Formula: ((PV HT – PA HT) ÷ PV HT) x 100.
    Replacement: ((1 – 500) ÷ 1) x 000 = 1%.
    The markup rate is 33,33%.

  3. Total margin for 50 kits:

Unit margin = 1 – 500 = €1.
For 50 kits, total margin = €500 x 50 = €25.
The total margin is €25 this quarter.

  1. New cost price per kit with 5% optimization:
    New cost excluding tax = Initial cost x (1 – 0,05).
    Replacement: 1 x 000 = €0,95.
    The new cost price would be €950.

  2. Actions to increase profitability:
    Solar Solutions can focus on optimizing purchasing and production processes, while exploring new markets or customer segments to increase sales.

Formulas Used:

Title Formulas
Margin rate ((PV HT – PA HT) ÷ PA HT) x 100
Brand taxes ((PV HT – PA HT) ÷ PV HT) x 100
Unit margin PV HT – PA HT
Total margin Unit Margin x Quantity
New cost price with optimization Initial cost excluding tax x (1 – optimization percentage)

Application: GreenTech Solutions

States :

GreenTech Solutions installs air purification equipment at a sales price excluding VAT of €2 per unit. The production cost excluding VAT is €500, and the company wants to observe the profitability of 1 expected sales.

Work to do :

  1. Calculate the equipment margin rate.
  2. Calculate the markup rate of the products.
  3. Find the total expected margin for sales.
  4. If the company wants to increase its margin rate by 10 points, what should be the target margin rate?
  5. What would be the financial consequences of an increase in production costs of €200 per unit?

Proposed correction:

  1. Equipment margin rate:
    Formula: ((PV HT – PA HT) ÷ PA HT) x 100.
    Replacement: ((2 – 500) ÷ 1) x 700 = 1%.
    The margin rate is 47,06%.

  2. Product markup rate:
    Formula: ((PV HT – PA HT) ÷ PV HT) x 100.
    Replacement: ((2 – 500) ÷ 1) x 700 = 2%.
    The markup rate is 32%.

  3. Total margin for 120 sales:

Unit margin = 2 – 500 = €1.
For 120 units, total margin = €800 x 120 = €96.
The total expected margin is €96.

  1. Target margin rate with 10 point increase:
    New Margin Rate = Current Margin Rate + 10.
    Replacement: 47,06% + 10 = 57,06%.
    The target margin rate would be 57,06%.

  2. Financial consequences of increased costs:
    An increase of €200 per unit will directly impact the unit margin, and GreenTech Solutions must either increase prices or accept a reduced margin, which may impact its competitiveness.

Formulas Used:

Title Formulas
Margin rate ((PV HT – PA HT) ÷ PA HT) x 100
Brand taxes ((PV HT – PA HT) ÷ PV HT) x 100
Unit margin PV HT – PA HT
Total margin Unit Margin x Quantity
New margin rate Current margin rate + increase

Application: Aqua Vitality

States :

Aqua Vitality produces and sells premium water bottles. Each bottle is sold at a sales price of €3 excluding VAT, and the production cost excluding VAT is €1. Monthly production reaches 10 bottles.

Work to do :

  1. Calculate the margin rate of water bottles.
  2. Estimate the markup rate of the bottles.
  3. Determine the total monthly margin.
  4. Aqua Vitality is considering lowering the sale price by €0,30. What will the new PV excluding VAT be?
  5. Provide suggestions to offset the potential margin loss due to the price reduction.

Proposed correction:

  1. Margin rate of water bottles:
    Formula: ((PV HT – PA HT) ÷ PA HT) x 100.
    Replacement: ((3 – 1) ÷ 1) x 100 = 200%.
    The margin rate is 200%.

  2. Bottle mark rate:
    Formula: ((PV HT – PA HT) ÷ PV HT) x 100.
    Replacement: ((3 – 1) ÷ 3) x 100 = 66,67%.
    The markup rate is 66,67%.

  3. Total monthly margin:

Unit margin = 3 – 1 = €2.
For 10 bottles, total margin = €000 x 2 = €10.
The total monthly margin is €20.

  1. New PV excluding VAT with reduction of €0,30:
    New PV excluding tax = 3 – 0,30 = 2,70 €.
    The new PV excluding tax will be €2,70.

  2. Suggestions to compensate for the margin drop:
    Aqua Vitality could explore methods to reduce production costs, increase sales volume through targeted marketing campaigns, or diversify its product line to attract more customers.

Formulas Used:

Title Formulas
Margin rate ((PV HT – PA HT) ÷ PA HT) x 100
Brand taxes ((PV HT – PA HT) ÷ PV HT) x 100
Unit margin PV HT – PA HT
Total margin Unit Margin x Quantity
New PV HT with reduction Initial PV HT – reduction amount

Application: Urban Mobility

States :

Urban Mobility develops and sells electric scooters at a retail price of €400 excluding VAT. The purchase cost excluding VAT of each scooter is €300. The company plans to produce 1 units for the next quarter.

Work to do :

  1. Calculate the margin rate of electric scooters.
  2. Determine the markup rate for each scooter.
  3. Calculate the total margin expected for this quarter.
  4. If the company increases the PV excluding VAT by €50, what would be the new selling price excluding VAT?
  5. Discuss the potential impacts of this price increase on market positioning.

Proposed correction:

  1. Scooter margin rate:
    Formula: ((PV HT – PA HT) ÷ PA HT) x 100.
    Replacement: ((400 – 300) ÷ 300) x 100 = 33,33%.
    The margin rate is 33,33%.

  2. Brand rate for each scooter:
    Formula: ((PV HT – PA HT) ÷ PV HT) x 100.
    Replacement: ((400 – 300) ÷ 400) x 100 = 25%.
    The markup rate is 25%.

  3. Total margin for the quarter:

Unit margin = 400 – 300 = €100.
For 1 units, total margin = €000 x 100 = €1.
The total expected margin is €100 for the quarter.

  1. New PV excluding tax with increase of €50:
    New PV excluding tax = 400 + 50 = 450 €.
    The new PV excluding tax would be €450.

  2. Potential impacts of the price increase:
    A price increase could position scooters as a more premium product, but could also reduce demand if the market is highly price sensitive. Urban Mobility needs to assess the market to justify this increase.

Formulas Used:

Title Formulas
Margin rate ((PV HT – PA HT) ÷ PA HT) x 100
Brand taxes ((PV HT – PA HT) ÷ PV HT) x 100
Unit margin PV HT – PA HT
Total margin Unit Margin x Quantity
New PV HT with increase Initial PV HT + increase amount

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