All cases
Forecast a pump maker’s revenue and operating profit
Forecast revenue and operating margin · Fictional case
The situation
A manufacturer sells 40,000 pumps at ₹5,000 each. Next year it expects 10% more units, 4% lower average selling price and 14% operating margin.
Your task
Forecast revenue growth and operating profit.
Reveal step-by-step solution
Set up the problem
New volume is 44,000 and price is ₹4,800. Base revenue was ₹20 crore.
Work through the numbers
Revenue = 44,000 × ₹4,800 = ₹21.12 crore, up 5.6%. EBIT = ₹21.12 × 14% ≈ ₹2.96 crore.
Interpret the result
The price decline offsets some volume growth. Test whether the 14% margin is credible at the lower unit price.
What to remember
Multiply price and volume changes. Build margin from operating drivers rather than extrapolating a single growth rate.