What are some common finance/math formulas that one might expect at a BCG interview? Will these be given if you don’t know them?
(edited)
What are some common finance/math formulas that one might expect at a BCG interview? Will these be given if you don’t know them?
(edited)
Hi,
Here is a set of things you need to know:
1) Math and formulas:
2) Fast math skills
Use math tools (Mimir math for iOS), Math tool on Viktor Cheng website to practice
3) Working with tables and graphs and deriving conclusions
Good luck!
Hi,
Here is a list of the necessary math and formulas:
Best
You may use math structures while problem-solving during the case. For example, if you have to understand why our factory has 4 FTEs doing the cleaning while Competitors use just 2 FTEs, you can structure it like:
Frequency of cleaning per day * working days * FTEs per 1 cleaning
After deriving the numbers you may find that a single cleaning procedure is longer and you may want to check if the problem is in: People / process / technology
Best
Hi Anonymous,
these are the most common formulas I encountered/have been useful through my interview process at BCG:
I would not expect any interviewer to provide any of them in case you don’t know (or if they provide I don’t think they would move you to the next round).
Besides that, you should also be familiar with simple and compound interest, and could be useful to be updated on the main currency exchanges, oil and gold prices.
Finally would recommend reviewing the formulas for volume/surface of main solid figures (pyramid, cone, cylinder, sphere), which could be useful in market sizing cases.
Best,
Francesco
Dear A,
Here is some finance formulas you need to know:
• Break-even Calculation = Fixed Cost / Contribution Margin; Fixed Cost / (Price – Variable Cost)
• Debt Ratio = Total Debt / Total Assets
• Debt-to-Equity Ratio = Total Debt / Total Equity
• Four Cs (marketing from a customer’s point of view): Convenience, Cost to the user, Communication, Customer needs and wants
• Four Ps (starting or expanding a business): Product, Price, Place, PromotionGross Profit = Sales – Cost of Goods Sold
Gross Profit Margin = Gross Profit / Total Revenue
• Profit = Total Revenue – Total Costs
• Return on Assets = Net Income / Total Assets
• Return on Equity = Net Income / Shareholder’s Equity
• Return on Investment = Net Income / Initial Investment
• SWOT Analysis: Strengths, Weaknesses, Opportunities, ThreatsTotals Costs = Fixed Costs + Variable Costs
• Total Revenue = Price x Volume
Hope it helps,
Best,
André
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):
Feel free to PM me for disccount codes for the guide, and I hope it helps you rock your interviews!
Very interesting, for North America perspective I find requirements for financial knowledge to be wildly different from the ones outlined in other answers.
Unless you are an MBA, a finance major or worked in finance I do not expect any knowledge of the formulas - with the exception of NPV - and I will indeed explain the relevant formulas to you if needed. Also would never expect you to calculate the NPV of a series of cash-flows during an interview due to the computational heaviness of that.
Finally, the rule of 72 is a nice tool but if candidate uses it during the interview then I would ask the mathematical explanation behind it. If you don’t that would be detrimental. This because To be an excellent consultant is very important that you know and understand the tools that you use intimately and understand how they work, their limitations, etc.
What I do expect is that you ace the basics like multiplications and divisions. I know, it sounds, well, basic, but if you have an hesitation on telling me what is 2% of 5M or calculate 0.6/9 that would be almost a non starter.
Finally when we do math I would like to see if you can get to the results in the simplest and fastest way possible. This will show me whether in a case you are trying to complicate things uneccessarely.
hope it helps,
Andrea
…
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Hi Felicia,
thanks for asking your question on our Consulting Q&A!
Have you seen this question that was asked recently: Formulas for consulting interviews?
I think it answers your question :)
Hope this helps!
Astrid
PrepLounge Community Management
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