Monday 21 November 2011

Suppliers in cash call from M&S

According to the Mail On Sunday, M&S have allegedly asked suppliers for cash to help pay for its store refurbishment programme
Calculate the incremental sales required as follows:
Assumption: a customer wants additional payment of 1.25% of a supplier’s annual sales to the customer.
A supplier with a net margin of 9.5% on sales of say £150,000 per annum to the customer, needs incremental sales of £19,736
i.e. 1.25% of £150k  = £1,875  = 9.5% of incremental sales      
Therefore incremental sales = £1,875/9.5 x 100 = £19,736

Simply substitute your figures to calculate the incremental sales for your company
Have a nice day….

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