Playing with profit levers, part 3

When preparing for case interviews, ROI and ROAS are two concepts you'll encounter repeatedly. Both are key metrics that enable you to evaluate a company's success and measure the efficiency of investments.🔎 In this article, you’ll learn how to correctly apply ROI and ROAS in your case analyses and how to structure your answers clearly. What is ROI, And Why is it Important For Case Interviews?Return on Investment (ROI) measures how much profit a company generates relative to its investments. This metric helps you assess whether an investment was worthwhile. In a case interview, ROI is particularly useful for evaluating the efficiency of a proposed strategy or project.💡 Pro tip: A positive ROI means the company is earning more than it has invested, indicating a profit. A negative ROI points to losses.How to calculate ROI:Example: If a company invests €100,000 and earns €120,000, the ROI is 20%. This means the company has achieved a 20% profit on its investment. 

Math is more than just a handy skill in consulting — it’s often a game-changer. Whether you're analyzing complex business challenges, building solid recommendations, or backing up your advice with hard data, strong math skills frequently set you apart in this field. Math in the Day-to-Day Life of a ConsultantMath is a cornerstone in daily life as a consultant. You’ll need to analyze complex issues, make quick estimations, and conduct precise calculations. Working with numbers and data is part of the job, and clients rely on you for recommendations that are both well-reasoned and reliable. Math becomes a crucial tool for making decisions and streamlining processes, helping you avoid getting lost in details or missing important insights.There are three key areas where math is indispensable in consulting:Problem-Solving EfficiencyConsulting often presents complex challenges. Math lets you approach problems systematically and efficiently, where even a rough estimate or quick calculation can reveal important insights early on. This can save time and avoid lengthy, unnecessary analyses.Math as a Trust BuilderYour math skills aren’t just about problem-solving — they’re also essential for building trust. Clients pay for expertise and expect solutions supported by rigorous analysis. When you can back up your arguments with clear numbers and accurate calculations, you strengthen your credibility.Estimation Skills: A Consultant's Must-HaveConsulting doesn’t always allow time for deep analyses. Often, you’re expected to make sound estimates quickly. Whether it’s sizing a market or estimating the cost of a business strategy, your ability to deliver prompt, well-founded answers is crucial. Strong estimation skills show you have a big-picture understanding and work efficiently. The Role of Math Skills in Case InterviewsMath skills are critical, even in the interview process for consulting roles. Case interviews test your ability to analyze business problems and perform quick calculations under pressure, with no tools like calculators or spreadsheets. Around 20-25% of the case interview assessment focuses on these “quant skills”, and in big consulting firms, like MBB and the Big Four, they often make the difference between an offer and a rejection. Math abilities are more than a “nice-to-have”; they’re a core requirement for consulting success.Here are three things to keep in mind for your upcoming case interviews:1. Prepare for estimation questions: Questions like, “How many cars exist in Germany?” don’t need exact answers but rather a logical approach. This skill is crucial for market sizing cases, so it’s worth practicing.2. Be ready for mental math: While notes are allowed, simple calculations should be done mentally and quickly, demonstrating your flexibility with numbers.