Hello!

Precisely for the high amount of questions (1) asked by my coachees and students and (2) present in this Q&A, I created the “Economic and Financial concepts for MBB interviews”, recently published in PrepLounge’s shop (https://www.preplounge.com/en/shop/prep-guide/economic_and_financial_concepts_for_mbb_interviews).

After +5 years of candidate coaching and university teaching, and after having seen hundreds of cases, I realized that the economic-related knowledge needed to master case interviews is not much, and not complex. However, you need to know where to focus! Hence, I created the guide that I wish I could have had, summarizing the most important economic and financial concepts needed to solve consulting cases, combining key concepts theorical reviews and a hands-on methodology with examples and ad-hoc practice cases.

It focuses on 4 core topics, divided in chapters (each of them ranked in scale of importance, to help you maximize your time in short preparations):

• Economic concepts: Profitability equation, Break even, Valuation methods (economic, market and asset), Payback period, NPV and IRR, + 3 practice cases to put it all together in a practical way. 
• Financial concepts: Balance sheet, Income statement/P&L and Performance ratios (based on sales and based on investment), +1 practice case
• Market structure & pricing: Market types, Perfect competition markets (demand and supply), Willingness to pay, Pricing approaches, Market segmentation and Price elasticity of demand, +1 practice case
• Marketing and Customer Acquisition: Sales funnel, Key marketing metrics (CAC and CLV) and Churn, +1 practice case

Feel free to PM me for disccount codes for the guide, and I hope it helps you rock your interviews! 

Hi,

Sharing my perspective having also struggled with math. I majored in the arts/social sciences in college, and I felt that math was all along not my ‘strong point’. In fact in my first mock interview, I did not even remember how to do long division and multiplication!

• First of all - you must have a solid foundation of the basic functions (+ - / *) → having this will take away alot of the stress or pressure to make calculations
• Next, in terms of improving the quantitative reasoning or thinking, the only way you get better at this is to train your brain to work that way
• What worked for me was to start forcing myself to think and reason quantitatively in as many scenarios as possible in life, and come up with ‘formulas’ to try and get to a quantitative answer or solution to a situation or problem or question
  • E.g. if I was deciding which credit card to sign up for, how would I quantify this decision? e.g. maybe considering cost of annual fees, upside of redemption points etc
  • E.g. if I was deciding between going MBA versus staying in my job, how would I decide on this quantitatively?
  • E.g. you are facing a long queue at the supermarket - ask yourself a hypothethical question of how many additional counters would be needed to reduce the queue/waiting time by [50%]

Hope this helps - it's definitely possible to get better at this, trust me :)

Hi Anonymous!

This is a common issue that many people struggle with. Let's deconstruct the issue:

• Planning: When you approach a math problem in a case similar to this Mexian Taxi case, you need to develop a small framework for your math and align this with the interviewer.
  • First, decide on what you're solving for: Are you calculating a market size, a break even point, the relative attractiveness of a customer segment - determine which one it is and then state it out loud to give the interviewer the chance to react.
  • If they approve, you can then develop your framework. It's ok to ask for 30-60 seconds ot plan for this. Determine which parameters you need to answer the question and which ones you have. Then write the equation you are going to apply to solve the problem. Don't write down any numbers, so you're equation could look something like this:

    • Total market size = Total number of items bought by customer segment / year x average price per segment + avg. after-market revenue per item per age bracket x number of items serviced

  • If you don't feel super comfortable with your equation, you can cross-check it by looking at the units. For the equation above, that would be as follows. As you see the units cancel each other out and what remains is a market size in $ :

    • Number of items x $ per item + $ per item x #items = $ + $

  • Lastly, run the interviewer through the equation, explain what you are going to do and why. Ask them if this makes sense or if you're missing anything major.

• Execution: Afer you've done the above planning, the execution is then only pluggin in numbers into an equation.

The good news is that this can be easily practiced just by looking at the math section of cases, so you don't even need a partner for it. Just make sure to also practice this conciously in a few cases with partners to get used to doing it under the stress of an interview.

One piece of advice: https://www.rocketblocks.me/

You're welcome :)

Peace of advice from my side: I would recommend you to practice more so that you can crack all the math parts like nuts.

Here is math app for practicing math fractions and percentages from one of PL participant https://apps.apple.com/us/app/case-math/id1507653375?mt=8&ign-mpt=uo%3D4

Also, there is a tool provided by PrepLounge (https://www.preplounge.com/en/mental-math.php

GB