Common math formulas

Question

Hi! Do you have a list of common math formulas used in case interviews? I had a case recently where fair value was asked and I was just o_O. Hope you can help a mathematically-impaired person out!

Answer 1

Hi there,

Some key formulas/concepts:

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

Some other helpful Q&As:

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

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

Answer 2

Hi, I also recommend practicing with Preplounge math tool: https://www.preplounge.com/en/mental-math.php

Best,
Antonello

Answer 3

Hi there,

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

Answer 4

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):

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!

Answer 5

Yes.

Here they are.

For anyone else who is preparing for case interviews, I’ve put together this material that covers virtually all the formulas you need:

Cheatsheet: The Must-Know Consulting Terms for Interviews

Best,

Cristian

Answer 6

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Answer 7

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Answer 8

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