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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!
First, you take the total fixed cost and divide it by the number of units to calculate the required unit margin. Then, you add that required unit margin to the variable cost (per unit cost), which gives you the required price.
However, in case interviews you are more likely to get a question around finding the breakeven quantity rather than the breakeven price.
The break-even analysis helps you find the point at which a company’s total revenue equals its total costs. This analysis allows you to determine the number of product units that need to be sold to reach profitability, given the product’s price and costs.🔎 In this article, we’ll show you how to tackle the break-even analysis in a case interview. Enjoy reading! What is Break-Even Analysis?A break-even analysis is crucial for assessing a company’s profitability. It illustrates the relationship between profit, revenue, and costs, helping to calculate the break-even point (BEP). It's essential to understand the concept of fixed and variable costs.👉 Make sure to check out our article on fixed and variable costs!The formula for calculating the break-even point is:When fixed costs are greater than zero, it’s critical to have a positive contribution margin per unit (i.e., the price must be higher than variable costs) to reach a break-even point.
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