Cookie and Privacy Settings

This website uses cookies to enable essential functions like the user login and sessions. We also use cookies and third-party tools to improve your surfing experience on preplounge.com. You can choose to activate only essential cookies or all cookies. You can always change your preference in the cookie and privacy settings. This link can also be found in the footer of the site. If you need more information, please visit our privacy policy.

Data processing in the USA: By clicking on "I accept", you also consent, in accordance with article 49 paragraph 1 sentence 1 lit. GDPR, to your data being processed in the USA (by Google LLC, Facebook Inc., LinkedIn Inc., Stripe, Paypal).

Manage settings individually I accept
  1. Dashboard 1
  2. Consulting Q&A 2
  3. BCG Potential Test 3
3

BCG Potential Test

BCG BCG Math BCG Potential Test case math GMAT MBB PST

Hello,

Does anyone please know how to tackle the attached math word problem?

BCG Potential Test Math Problem

Hello,

Does anyone please know how to tackle the attached math word problem?

BCG Potential Test Math Problem

(edited)

 New answer on Oct 15, 2020
342 Views
3 answers
  • Upvotes
  • Date ascending
  • Date descending
Best Answer

To calculate gross margin subtract Cost from total revenue and divide that number by total revenue.

In other words, divide the profit by the total revenue. So in the case of the NBA it would be 5/65, and for EBL 4/42 and so on.

So just add up all the profits (5+4+12+2=23) and all the revenues (65+42+67+31=205) and this would be 23/205, or approx 9%. None of the above.

To calculate gross margin subtract Cost from total revenue and divide that number by total revenue.

In other words, divide the profit by the total revenue. So in the case of the NBA it would be 5/65, and for EBL 4/42 and so on.

So just add up all the profits (5+4+12+2=23) and all the revenues (65+42+67+31=205) and this would be 23/205, or approx 9%. None of the above.

9

PS I believe that this formula is preferable to the other because it makes few sense to sum single margin percentages and divide the total by four, because I wouldn't weigh the margins by the revenue and this wouldn't provide me with a useful business information. — Anonymous on Oct 16, 2020

Thank you Stefano — Aisha on Oct 22, 2020

Book a coaching with Ian

100% Recommendation Rate

200 Meetings

16,266 Q&A Upvotes

USD 289 / Coaching

Choose a time slot
View profile of Ian

For formulas, google is your friend!

Get the gross margin formula and calculate it for each individual player. Then, average it out (i.e. add them and divide by 4)

NBA: 5/65 = 7.7%

EBL: 4/42 = 9.5%

CSL: 12/67 = 17.9%

Client: 2/31 = 6.5%

(8.3+10.53+21.82+6.89)/4 = 10.4%

Gross Margin Formula

For formulas, google is your friend!

Get the gross margin formula and calculate it for each individual player. Then, average it out (i.e. add them and divide by 4)

NBA: 5/65 = 7.7%

EBL: 4/42 = 9.5%

CSL: 12/67 = 17.9%

Client: 2/31 = 6.5%

(8.3+10.53+21.82+6.89)/4 = 10.4%

Gross Margin Formula

(edited)

6 Book a coaching with Ian

Thanks Ian — Aisha on Oct 22, 2020

Hi there,

The gross margin is equivalent to (profit)/(revenue) and in this situation it's (profit)/(profit+costs).

This way you can calculate the exact result and choose the adequate answer.

I hope this helps!

Mehdi

Hi there,

The gross margin is equivalent to (profit)/(revenue) and in this situation it's (profit)/(profit+costs).

This way you can calculate the exact result and choose the adequate answer.

I hope this helps!

Mehdi

2

Thanks Mehdi — Aisha on Oct 22, 2020

Related BootCamp article(s)

Why Math matters

Your math skills will be tested in each and every consulting interview. So you better brush up mental math skills to succeed.

Quiz

Written tests such as the PSTs

Top tier consulting firms have started using PSTs to test for in-depth analytical skills needed to be successful as a consultant on a day-to-day basis.

Typical Question Types in Written Tests

Questions among all tests can be categorized in math, GMAT-style, chart reading and brain teaser questions. Each type needs to be approached differently.

Interviewer-Led vs Candidate-Led cases

Case Interviews can be led by the candidate or by the interviewer: In Candidate-led cases the main challenge is the structure. In Interviewer-led cases the main challenge is to adapt quickly

Math Skills Required in Case Interviews

Nearly all the math required in case interviews is arithmetic: addition, subtraction, multiplication and division. We help you do calculations with large numbers quickly and without calculators.

Quiz

Related case(s)

BCG Questions

Solved 26.9k times
BCG Questions What arouses your interest when you are working / studying / doing another activity (from the CV)? Tell me of a time where you had no idea what you were doing. When did you use an uncommon approach to do something? Have you ever had responsibility for other people? Tell me of a situation where you were not the official leader.
4.5 5 212
| Rating: (4.5 / 5.0) |
Difficulty: Intermediate | Style: Fit Interview | Topics: Personal fit

What arouses your interest when you are working / studying / doing another activity (from the CV)? Tell me of a time where you had no idea what you were doing. When did you use an uncommon approach to do something? Have you ever had responsibility for other people? Tell me of a situation where ... Open whole case

Airline Economics

Solved 15.8k times
Airline Economics We are an airline major operating out of India. We want to increase the number of passengers on all our flights. Could you please calculate the financial return of adding one more passenger per flight?
4.3 5 736
| Rating: (4.3 / 5.0)
Difficulty: Intermediate | Style: Candidate-led (usual style) | Topics: Market sizing, Profitability analysis

We are an airline major operating out of India. We want to increase the number of passengers on all our flights. Could you please calculate the financial return of adding one more passenger per flight? Open whole case

MBB Final Round Case - Smart Education

Solved 15.3k times
MBB Final Round Case - Smart Education Our client is SmartBridge, a nonprofit educational institution offering face-to-face tutoring services. The client operates in the US. The mission of SmartBridge is to help as many students as possible to complete studies and prevent that they drop from the school system, in particular in disadvantaged areas. The client is considering starting operations for its services in the Chicago area. They hired us to understand if that makes sense. Due to the nonprofit regulation, SmartBridge should operate on its own in the market, without any partnership. How would you help our client?
4.6 5 530
| Rating: (4.6 / 5.0)
Difficulty: Advanced | Style: Interviewer-led (McKinsey style) | Topics: Growth strategy, Market analysis, Market entry, New product

Our client is SmartBridge, a nonprofit educational institution offering face-to-face tutoring services. The client operates in the US. The mission of SmartBridge is to help as many students as possible to complete studies and prevent that they drop from the school system, in particular in disadvant ... Open whole case

REA Reinsurance

Solved 11.7k times
REA Reinsurance Your client, REA, is a reinsurance company. REA recently acquired another reinsurance company (approximatively same size): the choice of this company was notably based on its product portfolio as well as its market presence which appeared complement with REA. However, the acquisition is not well received by the market. The acquisition price is considered too high and the transaction has not been well graded. REA management asks you to evaluate the transaction.
4.1 5 955
| Rating: (4.1 / 5.0)
Difficulty: Advanced | Style: Interviewer-led (McKinsey style) | Topics: Mergers & Acquisition

Your client, REA, is a reinsurance company. REA recently acquired another reinsurance company (approximatively same size): the choice of this company was notably based on its product portfolio as well as its market presence which appeared complement with REA. However, the acquisition is not well r ... Open whole case

Espresso, Whatelse?

Solved 9.0k times
Espresso, Whatelse? Espresso Whatelse is an Italian company that produces coffee and espresso machines since 1908. It is the Italian market leader and has a strong presence overall in Europe. In 2019, Espresso Whatelse has increased its revenues but it has seen declining profit margin. Your client wants to understand the root causes of this 2019 trend and how to increase its profit margin again.  
4.6 5 457
| Rating: (4.6 / 5.0)
Difficulty: Advanced | Style: Interviewer-led (McKinsey style) | Topics: Market analysis, Operations strategy, Pricing, Profitability analysis

Espresso Whatelse is an Italian company that produces coffee and espresso machines since 1908. It is the Italian market leader and has a strong presence overall in Europe. In 2019, Espresso Whatelse has increased its revenues but it has seen declining profit margin. Your client wants to understand ... Open whole case

Similar questions

Obtaining breadth of experience
Sustainability of working at MBB for someone who appreciates WLB
Parents least desirable MBB candidates?
Math Nerves During Interview
Excel Skills
Fit Interview - why this company? - "..well but that's a pretty small sample size, right?"
McKinsey Transformation Career Path
AT Kearney South East Asia
MBB: Time-off/vacation and my partner's perspective on it
Knowledge Analyst
Ask new question

Related companies

Career and application at Bain & Company Boston Consulting Group McKinsey & Company