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Guesstimate 3: Estimate The Annual Revenue of A Multiplex

The multiplex has four main revenue streams: ticket sales, parking, food and beverage, and advertising. Ticket sales make up the bulk of revenue, estimated at Rs. 2,00,000 per day based on average footfall and ticket prices. Parking generates Rs. 20,000 per week. Food and beverage is estimated at Rs. 60,000 per day based on footfall and spending habits. Advertising, which includes digital and billboard ads, makes up 10% of total revenue. The estimated average daily revenue per screen is Rs. 4.2 lacs. Total annual revenue for a 4 screen multiplex is estimated at Rs. 50.4 crores.

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665 views1 page

Guesstimate 3: Estimate The Annual Revenue of A Multiplex

The multiplex has four main revenue streams: ticket sales, parking, food and beverage, and advertising. Ticket sales make up the bulk of revenue, estimated at Rs. 2,00,000 per day based on average footfall and ticket prices. Parking generates Rs. 20,000 per week. Food and beverage is estimated at Rs. 60,000 per day based on footfall and spending habits. Advertising, which includes digital and billboard ads, makes up 10% of total revenue. The estimated average daily revenue per screen is Rs. 4.2 lacs. Total annual revenue for a 4 screen multiplex is estimated at Rs. 50.4 crores.

Uploaded by

Anon
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Guesstimate 3

Estimate the annual revenue of a multiplex

Interviewee Notes Case Facts and calculations


• Only cover the most
substantial revenue streams Average daily revenue/screen Revenue streams
• The footfall will depend on 1. Ticket Sales Revenue per day= (Average
whether it is a weekday or footfall per day)*(Average price per show)*(No of
weekend shows/day)
• Price can also be considered =200*250*4=Rs 2,00,000 Ticket sales Parking Food & Beverage Advertising
different for weekday and 2. Revenue from parking per week:
weekend, here although (Average footfall per show)*(% people using
parking)*No of shows/day)*
Average Digital
average price has been (Average ticket size)
Average Billboards
footfall price per No of Ads
taken 200*0.5*4*50=Rs 20,000
per show show shows/day
• Assume that the revenue
from advertising primarily 3. Advertising Revenue= Assuming it is 10%
comes from billboards and of the total revenue
4. Food & Beverage= (Average footfall per Weekdays Weekend (Fri-
digital ads between movies. (Mon-Thur) Sun)
show)*(% people buying)*No of shows/day)*
• This is average revenue per (Average ticket size)
screen, can be multiplied by 200*0.5*4*150=Rs 60,000
number of screens to obtain Weekdays Weekends
revenue of multiplex Average daily revenue/screen =Rs 4.2lac
Seating Capacity 300 300
Total Revenue = Average daily Average
60% 75%
revenue/screen*No of screens*No of days occupancy rate
=4.2*4*300 = 5040 lacs =50.4 Cr Average footfall 180 225
(Taking into account some days when the footfall
will be extremely low) Average footfall per day = (180*4+225*3)/7~200

Interview Summary
This is a guestimate case where the interviewee should quickly identify the most important revenue streams before laying down a structure and solving the case

Observations/Tips/Suggestions
• Should first create structure, then put numbers to it
• Make reasonable assumptions, clarify with interviewers at each stage
• Be prepared to justify your assumptions at each stage

(C) Consult Club, IIM Ahmedabad 2018-19 101

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