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Leonie
on Feb 26, 2020
Global
I want to receive updates regarding this question via email.

Basic Tips and Formulas for Financial Question

Hi! Since I have a background in industrial engineering, I am not so smooth with financial questions in case interview. Do you have tips or basic formulas regarding M&A questions or Investment questions (net present value etc.) which I should keep in mind?

Thanks in advanced!

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Cristian
Coach
on Apr 30, 2024
#1 rated McKinsey Coach

Yes. 

For you and anyone else who is preparing for case interviews, I’ve put together this material that covers virtually all the formulas you need:

  • Cheatsheet: The Must-Know Consulting Terms for Interviews

Best,

Cristian

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Luca
Coach
on Feb 26, 2020
BCG |NASA | SDA Bocconi & Cattolica partner | GMAT expert 780/800 score | 200+ students coached

Hello Leonie,

Don't worry about that, I am an industrial engineer and I hadn't any business experience before my first interview as candidate.

There are only few formulas that you should remember for the case interviews and you can easily find a list online. The most important among them are the net present value and the different methods to evaluate a company.

Best,
Luca

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Emily
Coach
on Apr 30, 2020
9 years in MBB Southeast Asia & China| 8 years as MBB interviewer | Free intro call

Hi!

Given your background in engineering, it is unlikely the interiewer would grill you on very techincal M&A or investment questions. 

That said, do prepare for basic business and finance knowlege. Read the course books for business fundamental and finance/accounting for any MBA courses, or read the materials for CFA level 1. Those should be good enough. 

Best,

Emily

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Deleted user
on Apr 30, 2020

Hi Leonie,

first of all practice-practice-practice.

for formulas please check:

https://www.preplounge.com/en/bootcamp.php/business-concept-library/common-terms-of-business/net-present-value-npv

Good luck,

André

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Vlad
Coach
on Feb 26, 2020
McKinsey / Accenture Alum / Got all BIG3 offers / Harvard Business School

Hi,

I would recommend learning the basic accounting before you start the job, but you will not need that for the interview preparation. Also, the case is a very simplified business situation and the accounting concepts are very often neglected. Here is a list of things you will need to know (and you can google them one by one since it is really short):

  • Profitability calculations (Operating profit, net profit, cost structure, etc)
  • Profit / breakeven formula
  • Interest rates calculations
  • Compound margin
  • NPV using the Rule of 72, Perpetuity
  • CAGR using the Rule of 72

Best!

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Clara
Coach
on Feb 26, 2020
McKinsey | Awarded professor at Master in Management @ IE | MBA at MIT |+180 students coached | Integrated FIT Guide aut

Hello!

As an engenieer, what they are going to demand in the interview is agility with numbers and good "feeling of the big numbers" (e.g., not slip a zero and saying 100 when it´s 1,000, etc.) 

No formulas needed at this stage. 

Hope it helps!

Cheers,

Clara

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Ian
Coach
on Feb 27, 2020
Top US BCG / MBB Coach - 5,000 sessions |Tech, Platinion, Big 4 | 9/9 personal interviews passed | 95% candidate success

Practice in cases ;). In particular, read cases/examples and ask for cases that have the following: 

ROI

NPV

Breakeven

Margin

Markup

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Antonello
Coach
on Feb 29, 2020
McKinsey | NASA | top 10 FT MBA professor for consulting interviews | 6+ years of coaching

Hi Leonie, I recommend this article to fix the theory: https://www.preplounge.com/en/bootcamp.php/business-concept-library/common-terms-of-business/net-present-value-npv

Best,
Antonello

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