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# Market sizing: when is it appropriate to round up/ down?

Market sizing
New answer on Jul 22, 2024
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Hi all, in market sizing questions, do we need a strong rationale to round up or down? Is it fine to just say the difference isn't large so I would round the number?

Just as example:

1) 104 → rounded down to 100

2) 3.35 → round up to 3.5

3) 19.6% → round up to 20%

Appreciate your sharing of best practices.

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Hi,

Thanks for your question.

Based on what I have read and experience, it should be fine to round especially if there are multiple decimal numbers you need to work with. However, few things to keep in mind when considering when you can round up:

1. The level of rounding you do should not make the final answer change much. For example, if you are rounding \$104M to \$100M that may change your answer a lot depending on what you multiply with vs. rounding \$104M to \$105M.

2. This is important - you should not round when the calculation easy. For example 104*20 is not a calculation that needs to be rounded. So make sure you do the easy calculations without rounding so the interviewer does not think you are weak in math.

3. If you are towards the end of a case and running out of time, it may make sense to round but check with your interviewer.

4. In your example, if you want to round 3.35, it should be the closest rounded number to 3.4, not 3.5 unless you are really running short of time.

Finally, always articulate to your interviewer if you are rounding and ask them if it is okay before proceeding.

Thanks,

Sohini

Hi there,

I would like to add a quick tip: It's totally fine to round up or down your number but what is even better is to explain your rationale.

Indeed, if you just ask to round up/down your number, you might come across as lazy or lacking confidence in your math skills. However, if you say something around the lines of: “Can I round 38 up to 40? this is less than a 5% increase, so it won't significantly affect my final answer?”, you will impress the interviewer in more than one way, and they will understand that you are aiming for efficiency!

Hope this helps!

Hi there,

Q: In market sizing questions, do we need a strong rationale to round up or down?

There is no problem with rounding the numbers in a market sizing, the interviewer knows you are making an estimate anyway.

If the interviewer really doesn’t want you to approximate, they will tell you so and ask to use the actual number (but I would expect this to be quite rare).

Best,

Francesco

No - you can just say for the sake of convenience I am rounding up to xx

Hi there,

In market sizing and estimation questions, you should always

• pick easy-to-calculate numbers
• round intermediate results

as the whole construct is based on assumptions anyway.

Ideally, round within a 5-10% margin and make sure that your rounding balances itself out, e.g.,

5,4 x 19,5 = 5 x 20

Cheers,

Florian

Sohini gave the best answer
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