Playing with profit levers, part 3

When preparing for case interviews, ROI and ROAS are two concepts you'll encounter repeatedly. Both are key metrics that enable you to evaluate a company's success and measure the efficiency of investments.🔎 In this article, you’ll learn how to correctly apply ROI and ROAS in your case analyses and how to structure your answers clearly. What is ROI, And Why is it Important For Case Interviews?Return on Investment (ROI) measures how much profit a company generates relative to its investments. This metric helps you assess whether an investment was worthwhile. In a case interview, ROI is particularly useful for evaluating the efficiency of a proposed strategy or project.💡 Pro tip: A positive ROI means the company is earning more than it has invested, indicating a profit. A negative ROI points to losses.How to calculate ROI:Example: If a company invests €100,000 and earns €120,000, the ROI is 20%. This means the company has achieved a 20% profit on its investment. 

When preparing for a case interview in consulting, you will quickly realize that math is an essential component. Don’t worry, you don’t need to be a math genius – it’s enough to handle numbers in a structured and confident manner. Important Calculations and Computations in Case InterviewsLet's take a look at the types of calculations required and how you can best prepare for them. Typically, math in case interviews is usually tested in the following ways: 1. Basic Arithmetic OperationsThe foundation of any mathematical task is basic arithmetic: addition, subtraction, multiplication, and division. Quick and error-free calculation, either mentally or on paper, is crucial.2. Percentages and FractionsPercentage calculations and working with fractions are often part of case interviews. You should be confident in calculating percentages and converting fractions to decimals and vice versa. This is especially relevant for tasks such as capacity change or profitability analysis.3. Estimation QuestionsEstimation questions test your sense of magnitude and your ability to quickly provide plausible numbers. Practice making rough estimates for various scenarios, such as the size of a market or the number of customers in a store.4. Charts, Data, and TablesIn many interviews, you will be presented with data in the form of charts and tables. Your task is to quickly analyze this data and draw the correct conclusions. Practice recognizing data patterns and filtering out relevant information. Here, you can practice with Numerical Reasoning Drills!5. Word ProblemsWord problems test your ability to understand and solve mathematical problems from a written scenario. It’s important to handle these types of tasks confidently and quickly. In our Brainteaser Library, you will find many word problems that require mathematical skills. Solve them now!