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When to use Absolute vs % Comparisons?

Say if a question has a table from the past 3 years of Rev, OPEX and FC, what should I do? 

 

Should I create a row for gross margin then calculate the % change?

A secondary concern I have is sometime for interviewee led cases, if they just share a table I feel like there could be 100 different computations I can do, and I'm not sure of which is the right one. For context, I am an advanced caser with 50+ cases done, but this is suddenly a concern for me

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Joel
Coach
7 hrs ago
Buy 1 get 1 free (May-June only) | Kearney | Ex-RB | Involved in recruiting | Passed 10/10 interviews | 250+ interviews

Hello, 

I would say the most important tip of all is keep the goal of the case in mind, is this a cost/revenue specific issue, or a broader profitability problem? 

  • If it is a component-specific problem (i.e., cost or revenue), then just focus on this component and analyze its historical trend.
  • If it is a profitability-wide problem, it is still helpful to analyze each component separately, but if you have the data, calculate profits or any profitability metric (i.e., margin) and analyze it.  

To your point about doing endless computations, you have to focus on what has the most impact on the core of the problem and prioritize it, it's not about doing everything, but about doing the right things! 

One last tip, working with % change is usually more insightful than absolute values as it can help you understand the magnitude of change and makes it easier to compare trends across metrics.  

Bottom-line is: Don't overthink, keep the goal of the case in mind, prioritize and focus on what matters and use % of change when you can. 

Hope this helps, 

Please feel free to reach out if you have any follow-up or if you want us to discuss a specific example!

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