Interviewer view · keep this screen to yourself

Calculating the margins from the P&L

You run the case. Read the prompt, answer questions from the notes below, and share data only when the candidate asks for it or gets stuck. Score at the end.

Case timer

00:00

Target length:

1. Read the prompt aloud

Read it slowly, then pause. Let the candidate ask questions before they structure.

Using the coffee chain P&L above (EUR millions), calculate gross profit, EBITDA, EBIT, net profit, and the gross and net margins.

The prompt refers to Exhibit 1. After reading it, say: "Open Exhibit 1 now."

2. Answers to clarifying questions

This case has no scripted clarifying answers. Answer from the prompt, and say "assume what you think is reasonable" if the prompt does not cover it.

3. A model structure

Compare the candidate's structure with this one. A different split can be just as good if it is clean and fits the problem.

Work down the P&L from revenue to net profit
- Gross profit = revenue minus COGS
- EBITDA = gross profit minus operating expenses
- EBIT = EBITDA minus depreciation and amortization
- Net profit = (EBIT minus interest) minus tax

Exhibit 1

The prompt uses this exhibit, so the candidate opens it right after you read the prompt ("Show exhibit 1" on their screen).

Simplified P&L of a coffee chain in Germany, one year(EUR millions)

Simplified P&L of a coffee chain in Germany, one year
Line	Amount	What it means
Revenue	200	All money from sales
Cost of goods sold (COGS)	-70	Direct cost of what was sold: coffee, milk, cups
Gross profit	130	Revenue minus COGS
Operating expenses	-100	Running the business: staff 50, rent 30, marketing 10, other 10
EBITDA	30	Profit before interest, tax, depreciation, and amortization
Depreciation and amortization	-10	The cost of equipment, shop furniture, and building work spread over their life
EBIT (operating profit)	20	Profit from running the business
Interest	-4	Cost of borrowing
Profit before tax	16
Tax	-4	Here 25 percent of profit before tax
Net profit	12	What is left for the owners

So-what

Each line is a place a profit problem can hide. Compare each line with last year, or as a share of revenue, to find which one moved.

4. The working, step by step

Each step shows how a strong candidate works it out. Share a new fact from it only when the candidate asks or is stuck, and let them do the math: the result in the dark box is what they should reach.

Step 1: Gross profit
What a strong candidate does: Revenue 200 minus COGS 70.
Gross profit (EUR millions): 200 - 70 = 130
Step 2: Gross margin
What a strong candidate does: Gross profit as a share of revenue.
Gross margin (fraction): 130 ÷ 200 = 0.65
Step 3: Operating expenses
What a strong candidate does: Add staff, rent, marketing, and other costs.
Operating expenses (EUR millions): 50 + 30 + 10 + 10 = 100
Step 4: EBITDA
What a strong candidate does: Gross profit minus operating expenses.
EBITDA (EUR millions): 130 - 100 = 30
Step 5: EBIT
What a strong candidate does: Subtract depreciation and amortization.
EBIT (EUR millions): 30 - 10 = 20
Step 6: Net profit
What a strong candidate does: Subtract interest of 4, then tax of 25 percent: keep 75 percent of 16.
Net profit (EUR millions): (20 - 4) × 0.75 = 12
Step 7: Net margin
What a strong candidate does: Net profit as a share of revenue.
Net margin (fraction): 12 ÷ 200 = 0.06

The recommendation to listen for

At the end, say: "The CEO walks in. What is your recommendation?"

Gross margin is 65 percent but net margin is only 6 percent. Most of the money goes on running the shops (staff and rent), so that is where a profit case on this business would usually look first.

Score the candidate

Score each criterion from 1 to 5. A 2 or a 4 sits between the descriptions.

Structuring

1: No clear structure, or a memorized framework that does not fit the problem.
3: A sensible structure, but with some overlap, a gap, or no clear priority.
5: A structure built for this problem, with no overlap and no gaps, a stated hypothesis, and a clear first step.

Math

1: Frequent errors, no units, or needed heavy help to finish.
3: Right answers but slow or messy working, or one error caught late.
5: Accurate and clearly narrated, with units, a sense check, and what the number means.

Exhibit reading

1: Read the chart aloud without finding the number that matters.
3: Found the key number but gave only part of the so-what.
5: Pulled the right number quickly and said what it means for the case.

Synthesis

1: Summarized what was done, with no clear answer.
3: Gave an answer, but with weak reasons or no next step.
5: Answer first, then two or three reasons with numbers, the main risk, and next steps.

Communication

1: Hard to follow: long silences, no signposting.
3: Clear most of the time, with some rambling.
5: Calm and concise, signposted each step, and checked in with the interviewer.

Total

0 out of 25

Score all five criteria to see the band and the feedback template.