Math formulae

Consutingmath
New answer on May 24, 2021
4 Answers
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Anonymous A asked on May 22, 2021

Is there a list I can find somewhere for all the math formulae you need to know for cases? I see some variations in ROI formulae (some use Annual profit/Investment cost and others (Annual Profit - Investment cost)/Investment cost). What's the right formula? If there are some resources that can help with that'd be great.

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Ian
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Content Creator
updated an answer on May 22, 2021
MBB | 100% personal interview success rate (8/8) and 95% candidate success rate | Personalized interview prep

Hi there,

  1. 100% Recommend Rocket Blocks.
  2. Online "Drills": Preplounge has some
  3. Math sheets (print these and do them on paper): Google "Math Drills"
  4. In addition to that, you can ask other PrepLoungers to case you on math-heavy cases. You can also search for those case types here and work through them yourself.

Some key formulas/concepts:

  • Breakeven
  • NPV (with + without growth, perpituity + 1-2 years from now)
  • % Change
  • ROI
  • Margin
  • Markup
  • Inventory turnover

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Some great answers from a variety of angles have already been asked. Check these out!

Mental Math

https://www.preplounge.com/en/consulting-forum/mental-math-help-7962

https://www.preplounge.com/en/consulting-forum/is-quick-mental-math-a-skill-that-can-be-learned-5210

Conceptual/Contextual Math

https://www.preplounge.com/en/consulting-forum/materials-for-practicing-conceptual-case-math-8016

https://www.preplounge.com/en/consulting-forum/math-concepts-6951

Key Math Equations

https://www.preplounge.com/en/consulting-forum/math-equations-their-use-7934

Math Practice

https://www.preplounge.com/en/consulting-forum/case-math-practice-6877

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Antonello
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replied on May 23, 2021
McKinsey | MBA professor for consulting interviews

Hi, I recommend look at the Bootcamp here in the platform, very insightful both for practicing and testing

Best,
Antonello

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Clara
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replied on May 24, 2021
McKinsey | Awarded professor at Master in Management @ IE | MBA at MIT |+180 students coached | Integrated FIT Guide aut

Hello!

Being 80-20, the ones you need are break even and NPV -both the normal one and in perpetuity-

Hope it helps!

Cheers,

Clara

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Francesco
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replied on May 23, 2021
#1 Coach for Sessions (4.000+) | 1.500+ 5-Star Reviews | Proven Success (➡ InterviewOffers.com) | Ex BCG | 9Y+ Coaching

Hi there,

The formula for ROI is Net income from investment / Investment cost (equivalent to the first you mentioned). So if you buy something for 5 and resel it for 10, your ROI is:

(10-5)/5 = 100%

The most common formulas you need to know in a consulting interview are:

  • Breakeven
  • Rule of 72
  • Perpetuity formula and general NPV formula
  • ROI and related financial ratios

Besides that, you should be familiar with simple and compound interests.

Best,

Francesco

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Ian gave the best answer

Ian

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