finance case study interview example

Financial Services Case Interview: 4 Tips on How to Pass

• Last Updated December, 2021

A good case structure will get through any consulting case interview question. But some industries have specific issues that make it a lot easier to pass the case if you know what to expect. Financial services case interviews are like that.

Government regulation of financial institutions, their corporate structure, and business models are quite different from other industries, so it’s good to brush up on the financial services industry before facing a case.

In this article, we’ll discuss:

• Differences between financial services firms and other firms.
• Common types of financial services case interviews.
• A financial services case example.
• 4 Tips on acing your financial services case interview.

Let’s get started!

Differences Between Financial Services Firms & Other Firms

Financial services case interview example, common types of financial services case interviews.

5 Tips On Acing Your Financial Services Case Interview

Financial services firms don’t make cars or serve hamburgers to customers to generate revenue the way an auto company or a fast-food restaurant does. Instead, they provide retail customers (individual consumers – people like you and me) and businesses with loans, deposit accounts, or insurance policies. Or they help them invest their money in stocks, bonds, or other financial instruments.

Corporate Structure

There are many different types of financial institutions and they exist both on paper (e.g., online banks) and in actual brick-and-mortar form (e.g., retail bank branches with ATMs). Typical financial institutions include:

• Commercial banks (provide business loans, home mortgage loans, and savings/checking accounts)
• Investment banks and securities firms (help people buy and sell stocks and bonds and help companies issue them)
• Insurance companies (provide insurance for homes, cars, business risk, health, etc.)
• Mutual funds and pension funds (manage retirement savings or savings for other goals, e.g., education, health, etc., by investing it in stocks, bonds, and other assets)
• Microfinance companies (provide small loans to populations underserved by traditional financial institutions)

Businesses that “make stuff” have a factory where parts go in one end and cars or hamburgers go out the other. Financial institutions, on the other hand, have people who handle the bank accounts, stocks purchases/sales, or insurance products that they provide, and all the investment decisions and paperwork that go with that service.

Business Model

Unlike other sectors, the financial services industry’s business model is largely based on interest, fees, and premiums. Don’t get bogged down by the variety of products and services that a financial institution has to offer. You only need to remember:

• Key income sources: interest earned by selling retail and corporate loans, premiums earned on insurance policies, fees earned on financial advisory (e.g., stockbroking) or on deposit accounts, etc.
• Key costs: interest paid on deposits from retail investors and corporates, insurance claims/payouts, branch operations, manpower, SG&A, etc.

Always confirm and validate the drivers of revenue and cost with your interviewer before jumping to solving any financial services case.

Regulation and Risk

A well-functioning financial system is vital for the economy, businesses, and consumers. When a financial institution fails, it can create problems for the wider economy as the 2007-2009 financial crisis showed us. Financial services firms, therefore, attract high levels of scrutiny and oversight.

Government regulation helps make sure that these institutions have good management so they don’t make bad investments or become too risky. They require that financial institutions hold “shock absorbers” (i.e., capital) to help deal with bad investments. Each country has its own set of norms and regulations that create the framework and operating model for financial institutions.

In a financial services case, therefore, it’s always important to include regulation as a category in your issue tree. You can check with your interviewer on which aspects of financial regulation and risk are relevant to ensure that ideas you brainstorm in the case won’t break laws. Aligning on this upfront increases your credibility with the interviewer, but regulation is not typically the focus of the case.

Nail the case & fit interview with strategies from former MBB Interviewers that have helped 89.6% of our clients pass the case interview.

Financial services cases can include revenue growth, cost reduction, or new product introduction like they would for any other industry. They can also include managing the “back office” where financial account information is maintained or stock and bond trades are cleared.

Here are some financial services case interview examples:

• Disconsa – A McKinsey case on developing better financial service offerings for a not-for-profit entity serving remote Mexican communities.
• Internet Bank – An L.E.K. case on product diversification for a large insurance company in Europe.
• Big Bucks Bank – A Deloitte case on technology transformation for a large US-based bank.
• Bank of Zurich – A Deloitte case on developing a strategy to structure the organization’s data program.

We’ve also curated a list of case examples , to help you hone your business problem-solving skills. Head to Our Ultimate Guide to Case Interview Prep to learn what a case interview is and its various stages (i.e., opening, structure, analysis, and conclusion). The best way to get smarter about answering financial services case interview questions is to master this general four-part approach first and then apply financial services specifics as appropriate.

Let’s dive into a financial services case example.

Case Question

“Your client is Go-for-Growth bank, a large bank in a frontier market that wants to rapidly build its agent network to grow revenue for its payment and banking business. How should they go about it?”

First, repeat the main information in the prompt to the interviewer to make sure you got it right, and ask clarifying questions. If you don’t know what a frontier market is or who banking agents are, ask your interviewer.

Frontier market is a classification made by Standard & Poors, a financial rating agency, that’s used to classify less advanced economies in the developing world, e.g., Vietnam, Kenya, Nigeria, Cambodia, etc.

A banking agent is a retail or a postal outlet contracted out by a financial institution (in this case Go-for-Growth bank) to process clients’ transactions. Typically, in less advanced economies, the population has little access to banks but significantly higher interaction with establishments such as pharmacies, grocery stores, post offices, and beauty salons. The agents help the banks get new customers and typically make money on commissions.

Take a moment to develop your own hypothesis for the Go-for-Growth bank case.

Financial Services Case Hypothesis

Your hypothesis could be that a banking agent is a cost-efficient way for the bank to acquire customers and distribute financial products vs. having to set up their own branches across the country (including paying rent for office space and hiring staff in each location).

Next, validate your understanding of the bank’s business model, corporate structure, and applicable regulations. Here, the bank is a traditional commercial bank that wants to add agents as a channel to acquire retail customers and sell traditional financial products and services (e.g., loans, deposits, etc.) Building an agent network is allowed within the regulatory framework of the country.

A great candidate would also establish:

• The purpose of agent acquisition: “Why agents?” “Why now?” and “What is the size of the opportunity (or market) that the bank is chasing?” Here, the interviewer can confirm your hypothesis about agents being cost-efficient vs. Go-for-Growth Bank having to set up brick-and-mortar establishments.
• The size of the opportunity: Establishing an agent network is a big undertaking so it’s worth ensuring the opportunity size is big enough to justify the cost. In this case, the total opportunity size is $3 billion given the country is largely underpenetrated with only 10-20% of the total population of 100+ million having access to financial services, so the opportunity is worth it. (Note that to make this a short case or one that would be appropriate for undergrad summer interns, sizing the market could be the sole focus.)
• The client’s key success metrics : “What does success look like to Go-for-Growth Bank?” Here, you should clarify the target network size and the target timeframe to meet the client’s growth target. Say, your interviewer adds that they want to scale up to a size of 200,000 agents in 2 years to achieve the topline impact of $3+ billion.

You’d now ask for a minute to lay down your thoughts so that you can build your structure.

Take a moment to think about how you would structure this case before reading ahead. That will give you a sense of what business issues come naturally to you in a financial services case and where you need to push your thinking further.

Here’s a sample case structure:

• Which services/revenue streams should Go-for-Growth Bank market via the agents and to which end customers?
• Which of the existing products and services are most profitable?
• Which products and services don’t need extensive training for agents to sell?
• Which products and services best meet the needs of the customers who agents serve (e.g., payments and basic deposit accounts and loans, not more sophisticated financial products).
• Is there a segmentation of customers who should be targeted by the agents?
• Will the bank need to tweak their products to make them profitable to customers acquired through the agent network? (An A+ answer would note that clients with low incomes or lumpy earnings might need bank accounts with lower minimums.)
• Is there opportunity for cross-sell/ up-sell of products to customers?
• How to reach the agents? (sales force/feet on the ground vs. email campaign)
• How to get them interested in becoming a channel partner? Will one-time, up-front incentives be required?
• What is the process to get them on board?
• What cut can be given to the agents (so the bank continues to be profitable)?
• What will be meaningful for the agents?
• Can gamification reward schemes be introduced?
• Would certification or co-branding, such as a sticker to display the agent’s affiliation with Go-for-Growth Bank, appeal to potential agents?
• What banking products can be sold to the agents?
• Can the agents be offered discounted pricing on the products?
• What is the up-front effort/cost to acquire agents?
• What is the expected revenue or profit uplift per agent to the bank?
• How much should each agent sell annually/monthly to continue being profitable to the bank?
• What are the recurring costs to maintain the agent network?
• Which metrics should be used for tracking performance?
• Can low performers be segmented further based on their potential?
• What will be the plan of action for consistent low-performing agents?
• Which training(s) and products’ brochures should be offered to agents to keep the customer conversion rate high?
• How can we create a community within the agent network to provide product information updates and support agency retention (such as Facebook or WhatsApp groups)?
• How can we set up the right operating model for providing cash to agents as needed?
• How can we make sure the agents have the right processes in place to ensure Go-for-Growth Bank’s cash is safeguarded?

This structure is quite exhaustive. Don’t worry if you didn’t have every bullet point in your structure. In practice, since you only have about 2 minutes to lay this out, you don’t need to write full questions on your piece of paper but only a couple of keywords for each bucket and each sub-bucket.

We recommend going through our article on Issue Trees to learn more about how to create a case structure.

After you lay out your case structure, your interviewer would prompt you to brainstorm which agents to acquire and which products and services to sell, so if you’ve already alluded to it in your structure, that gives you a headstart.

Here, your interviewer would hand you a few exhibits that detail population density by region, classification of the retail stores with metrics on annual revenue, footfall, etc., a list of Go-for-Growth Bank’s products and the associated profitability of each product, and the results of a survey that details the wishlist of financial services and products by underserved consumers and small businesses.

On brainstorming ideas, you’ll be rated on both your structure and your creativity. Make sure to always articulate the logic behind your ideas, using your past experience, analogies, or your general knowledge.

Ideas for Increasing Go-for-Growth Bank’s Revenue

• Target the agents that receive the highest customer footfall (grocery stores) AND/OR agents that are well-versed in handling legal/administrative documentation (postal outlets). Let’s assume the bank can cover 60% of the untapped population by acquiring grocery stores and postal outlets as agents in the Tier 2 cities.
• Sell products that are profitable to the bank and at the same time relevant to the customers (payment transfer, insurance products, working capital loans, home loans, etc.)
• Onboard agents as customers first to establish other customers’ trust in the bank’s products. Given it’s a less advanced economy where customers rely on heavy interactions with retail stores for information on financial products, word-of-mouth from the agent will establish trust upfront and lead to longer lifetime value (LTV) for the bank.

Ideas on Incentives for Agents

• Provide commission to agents of 0.15% on each insurance/loan product.
• Organize monthly or quarterly leagues with leaderboards to recognize top performers, e.g., highest transaction value, highest growth, highest customer acquisition, etc.
• Leverage social media to build an agent community via Facebook or WhatsApp groups. These groups can create engagement and serve as an efficient mode of communication, allowing the bank to solicit agent referrals and publish leaderboards.
• Introduce friendly competitions like “Best shop-front display” to increase the visibility of Go-for-Growth Bank’s products.
• Test if affiliation with the Bank’s brand in the country is a motivator for agents.

You could classify “high performers” as agents with transaction volume and transaction value in the top 10%. Agent’s potential information (e.g., footfall, turnover, location potential) can also be collected to have a more nuanced segmentation for tracking and governance purposes.

Running the Numbers on Go-for-Growth’s Agent Strategy

Finally, you should consider pressure testing the unit economics of each agent to ensure the bank’s targets are met. To do this, you’ll need to leverage the information you were provided during the opening of the case as well as make some assumptions. A quick way to round this up would be:

• Total # of customers = % of population targeted * Annual conversion rate per agent = 60% of population targeted * 10% conversion rate = 60% * (80% [% of population currently underserved by financial institutions] * 100 million [total population]) * 10% [conversion rate]= 4.8 million customers
• Revenue per customer = Avg # of banking products sold per customer * Annual price per product = 1.5 avg # of products * $500 price 1 = $750 annual revenue per customer.

1 Based on data from interviewer.

• Therefore, Topline impact = 4.8 million * $750 = $3600 million = $3.6 billion (validated as this meets the $3+ billion target)

Keep drawing on the interviewer to test the assumptions and/or ask for industry benchmarks on conversion rates, average number of products, prices, etc. to make your analysis rigorous.

A great candidate would also establish bottom line impact for the bank:

• Total bottom line opportunity = Topline opportunity * Profit margin = $3.6 billion * (5-7% profit margin – 0.15% cut to agents) = $175 to $250 million.

“Go-for-Growth Bank’s CEO walks into the team room and asks you about your findings. What do you tell her?”

You should lead with your recommendation to the client and detail the key reasons supporting that recommendation. Then, mention any risks to consider which might impact the outcome and the next steps that you’d suggest to double down on the analysis. There is no need to repeat everything you covered during the case: be succinct and stick to the key arguments.

What would you say? Give it a try before reading ahead.

“We recommend acquiring the grocery stores and postal outlets in the Tier-2 cities as agents for the bank to help sell loan and insurance products at a profit margin of 5-7% to retail and small business clients with a 0.15% cut to the agents. This way, we cover 60%+ of the underpenetrated population with our highest profitability products and provide an additional source of income to the agents at no additional cost to them. The high perceived value in being affiliated with the Go-for-Growth Bank brand will attract agent interest. This will allow us to add $3 billion to the top line and $175-$250 million to the bottom line annually.

One concern we’d like to address next is whether competitors could potentially take away our first-mover advantage by luring away agents with better commissions, especially in densely populous areas. We should address this potential problem with contract terms and incentives in our agent agreements.”

Congrats, you made it through your first financial services case interview!

4 Tips On Acing Your Financial Services Case Interview

1. validate corporate structure and business model.

Always remember to validate the corporate structure and business model of the financial institution in your financial services case interview. You don’t want to end up confusing a commercial bank with an investment bank!

As a candidate, you’re not expected to know everything. Therefore, ask as many questions as possible to understand what you’re really dealing with. For instance, you could say, “Hey, I’m not familiar with the corporate structure and the business model of a pension fund, could you please explain that to me so I can start to understand the drivers of value for the business a bit better.”

2. Align on the Success Metrics

To be able to reach your destination, you must know what the destination is. This is especially relevant in the financial services case interview, where there could be dozens of metrics that can be solved for. Therefore, it’s critical to align on the North Star with your interviewer so you can solve for the target the client cares most about.

3. Apply First-Principles Thinking to Structure the Case

To navigate through a financial services case interview, you need to think on your toes. Chances are the corporate structure, business model, regulatory environment, and risk aspects will be unfamiliar to you. Instead of feeling bogged down by these nuances, take a big picture lens and apply first-principles thinking to structure the case.

You may not know the industry terms such as “net interest margin” or “dividend-adjusted return,” but you can always ask the first-principles question on “What drives value for the business?” and engage with your interviewer to identify the underlying sources of value.

Demonstrating intellectual curiosity in financial services cases will hold you in good stead. Start with “Why?” then get to the “What?” and only then solve for “How?”

4. Remain Calm and Confident

It’s easy to lose nerve when you’re out of your comfort zone. If financial services case interviews tend to throw you off, practice staying calm while solving the case. During your practice, monitor yourself for signs of nervousness. Pause, take a deep breath, smile, and then continue solving the case. The more practice you put in, the calmer your nerves will become. Also, include elements such as reading financial news, financial statements, etc., into your case prep so that you become familiar with industry terminologies. Incorporating these habits into your holistic practice will boost your confidence naturally.

– – – – –

In this article, we’ve covered:

• Key differences between financial services firms and other firms,
• Common types of financial services case interviews,
• A financial services case interview example, and
• 4 tips on acing your financial services case interview.

Still have questions?

If you have more questions about financial services case interviews, leave them in the comments below. One of My Consulting Offer’s case coaches will answer them.

Other people prepping for consulting case interviews found the following pages helpful:

• Our Ultimate Guide to Case Interview Prep
• Issue Trees
• Market-sizing Case Interview
• Supply Chain Case Interview

Help with Case Study Interview Prep

Thanks for turning to My Consulting Offer for advice on case study interview prep. My Consulting Offer has helped almost 85% of the people we’ve worked with to get a job in management consulting. We want you to be successful in your consulting interviews too. For example, here is how Julien was able to get his offer from Capital One.

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Finance Case Study Example | Finance Interview Technical Questions

Written by abc audio all rights reserved on february 23, 2022.

My Communities: ► Email list: http://bit.ly/joinericnewsletter ► Discord: https://discord.gg/gHghhVcW3S

Related Financial Modeling Videos: ► Finance Interview Prep Series | Crush Your Interview: http://bit.ly/fin_intervw_prep ► Build a 3 Statement Financial Model: https://youtu.be/xlXDZyZ9azk ► Demystifying the Cash Flow Statement: https://youtu.be/BS6_RsuqzwE ____________________________________________

One of the quickest and most common ways to evaluate candidates for analyst roles is to give them a finance case study during an interview. Case studies force us to both crunch the numbers quantitatively to demonstrate our knowledge but also think about the big picture and make recommendations – they are a lot of fun!

For these reasons, they are common in technical finance interviews, university projects, MBA programs, etc.

In this video, I help you solve a finance interview case study for a software platform that is considering a revenue share partnership with another company – this is the type of case study would be common at a FAANG or big tech company.

All case studies start the same way – they present you with a set of facts during some pivotal moment at a company where they are trying to decide whether they want to do some new thing (be it internally, or externally).

Regardless of the specifics – all case studies in finance are effectively asking you to do the same thing – build a simple income statement, differentiate COGS vs. OPEX expenses, calculate the depreciation for a CAPEX investment, and evaluate cash vs. accrual accounting payback period.

At the end, you are expected to synthesize your analysis into an open-ended recommendation about what the company should do.

Now that you understand the basic format of finance case studies, let’s walk through this example where I help you develop a framework of ideas to analyze situations with.

1:04 finance case study model setup (all case studies are basically asking the same info) 3:55 building the income statement & analyzing margins 10:50 calculating depreciation schedule for CAPEX 16:15 cash flow analysis & payback period vs. p&l 18:12 key quantitative metrics for making a case study recommendation 21:10 key qualitative metrics for making a case study recommendation 24:36 my finance case study recommendation

By the end of this video, you will understand how to approach finance case studies, crunch the numbers, and make recommendations in your future interviews – I guarantee it!

If you have questions – please leave a comment below and I’ll try to help. Cheers!

► Subscribe for more finance videos: https://bit.ly/EricAndrewsSubscribe

#financecasestudy #financeinterviews #saas

The post Finance Case Study Example | Finance Interview Technical Questions appeared first on Correct Success .

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35 Case Interviews Examples from MBB / Big Four Firms

Studying case interview examples is one of the first steps in preparing for the  management consulting  recruitment process. If you don’t want to spend hours searching the web, this article presents a comprehensive and convenient list for you – with 35 example cases, 16 case books, along with a case video accompanied by detailed feedback on tips and techniques.

A clear understanding of “what is a case interview” is essential for effective use of these examples. I suggest reading our  Case Interview 101  guide, if you haven’t done so.

McKinsey case interview examples

Mckinsey practice cases.

• Diconsa Case
• Electro-Light Case
• GlobaPharm Case
• National Education Case

What should I know about McKinsey Case interviews?

At McKinsey, case interviews often follow the interviewer-led format , where the interviewer asks you multiple questions for you to answer with short pitches.

How do you nail these cases? Since the questions can be grouped into predictable types, an efficient approach is to master each question type. However, do that after you’ve mastered the case interview fundamentals!

For a detailed guide on interviewer-led cases, check out our article on McKinsey Case Interview .

BCG & Bain case interview examples

Bcg practice cases.

• BCG – Written Case – Chateau Boomerang

Bain practice cases

• Bain – Coffee Shop Co.
• Bain – Fashion Co.
• Bain – Mock Interview – Associate Consultant
• Bain – Mock Interview – Consultant

What should I know about BCG & Bain case interviews?

Unlike McKinsey, BCG and Bain case interviews typically follow the candidate-led format – which is the opposite of interviewer-led, with the candidate driving the case progress by actively breaking down problems in their own way.

The key to acing candidate-led cases is to master the case interview fundamental concepts as well as the frameworks.

Some BCG and Bain offices also utilize written case interviews – you have to go through a pile of data slides, select the most relevant ones to answer a set of interviewer questions, then deliver those answers in a presentation.

For a detailed guide on candidate-led cases, check out our article on BCG & Bain Case Interview .

Deloitte case interview examples

Deloitte practice cases.

Undergrad Cases

• Human Capital – Technology Institute
• Human Capital – Agency V
• Strategy – Federal Benefits Provider
• Strategy – Extreme Athletes
• Technology – Green Apron
• Technology – Big Bucks Bank
• Technology – Top Engine
• Technology – Finance Agency

Advanced Cases

• Human Capital – Civil Cargo Bureau
• Human Capital – Capital Airlines
• Strategy – Club Co
• Strategy – Health Agency
• Technology – Waste Management
• Technology – Bank of Zurich
• Technology – Galaxy Fitness

What should I know about Deloitte case interviews?

Case interviews at Deloitte also lean towards the candidate-led format like BCG and Bain.

The Deloitte consultant recruitment process also features group case interviews , which not only test analytical skills but also place a great deal on interpersonal handling.

Accenture case interview examples

Accenture divides its cases into three types with very cool-sounding names.

Sorted in descending order of popularity, they are:

These are similar to candidate-led cases at Bain and BCG. albeit shorter – the key is to develop a suitable framework and ask the right questions to extract data from the interviewer.

These are similar to the market-sizing and guesstimate questions asked in interviewer-led cases – demonstrate your calculations in structured, clear-cut, logical steps and you’ll nail the case.

These cases have you sort through a deluge of data to draw solutions; however, this type of case is rare.

Capital One case interview examples

Capital One is the odd one on this list – it is a bank-holding company. Nonetheless, this being one of the biggest banks in America, it’s interesting to see how its cases differ from the consulting ones.

Having gone through Capital One’s guide to its cases, I can’t help but notice the less-MECE structure of the sample answers. Additionally, there seems to be a greater focus on the numbers.

Nonetheless, having a solid knowledge of the basics of case interviews will not hurt you – if anything, your presentation will be much more in-depth, comprehensive, and understandable!

See Capital One Business Analyst Case Interview for an example case and answers.

Other firms case interview examples

Besides the leading ones, we have some examples from other major consulting firms as well.

• Oliver Wyman – Wumbleworld
• Oliver Wyman – Aqualine
• LEK – Cinema
• LEK – Market Sizing
• Kearney – Promotional Planning
• OC&C – Imported Spirits
• OC&C – Leisure Clubs

Consulting clubs case books

In addition to official cases, here are a few case books you can use as learning materials.

Do keep in mind: don’t base your study on frameworks and individual case types, but master the fundamentals so you can tackle any kind of case.

• Wharton Consulting Club Case Book
• Tuck Consulting Club Case Book
• MIT Sloan Consulting Club Case Book
• LBS Consulting Club Case Book
• Kellogg Consulting Club Case Book
• INSEAD Consulting Club Case Book
• Harvard Consulting Club Case Book
• ESADE Consulting Club Case Book
• Darden Consulting Club Case Book
• Berkeley Consulting Club Case Book
• Notre-Dame Consulting Club Case Book
• Illinois Consulting Club Case Book
• Columbia Consulting Club Case Book
• Duke Consulting Club Case Book
• Ross Consulting Club Case Book
• Kearney Case Book

Case interview example – Case video

The limitation of most official case interview examples is that they are either too short and vague, or in text format, or both.

To solve that problem for you, we’ve extracted a 30-minute-long, feedback-rich case sample from our Case Interview End-to-End Secrets Program .

This is a candidate-led, profitability case on an internet music broadcasting company called Pandora.

In 30 minutes, this candidate demonstrates the exact kind of shortcoming that most candidates suffer during real case interviews – they come in with sharp business senses, then hurt their own chances with inadequate techniques.

Here are seven notable areas where the candidate (and you) can improve:

Thanking Throughout the case, as especially in the opening, he should have shown more appreciation for the time the interviewer spent with him.

Structured opening The candidate’s opening of the case feels unstructured. He could have improved it by not mixing the playback and clarification parts. You can learn to nail the case in a 3-minute start through this video on How to Open Any Case Perfectly .

Explicitness A lot of the candidate’s thought process remains in his head; in a case interview, it’s better to be as explicit as possible – draw your issue tree out and point to it as you speak; state your hypothesis when you move into a branch; when you receive data, acknowledge it out loud.

Avoiding silence The silence in his case performance is too long, including his timeout and various gaps in his speech; either ask for timeout (and keep it as short as possible) or think out loud to fill those gaps.

Proactivity The candidate relies too much on the interviewer (e.g: asking for data when it can easily be calculated); you don’t want to appear lazy before your interviewer, so avoid this.

Avoiding repeating mistakes Making one mistake twice is a big no-no in consulting interviews; one key part of the consulting skill set is the ability to learn, and repeating your mistakes (especially if the interviewer has pointed it out) makes you look like someone who doesn’t learn.

Note-taking Given the mistakes this candidate makes, he’s probably not taking his notes well. I can show you how to get it right if you watch this video on Case Interview Note-Taking .

Nonetheless, there are three good points you can learn from the candidate:

The candidate sums up what he’s covered and announces his upcoming approach at the start and at key points in the case – this is a very good habit that gives you a sense of direction and shows that you’re an organized person.

The candidate performs a “reality check” on whether his actions match the issue tree; in a case interview it’s easy to lose track of what you’re doing, so remember to do this every once in a while.

The candidate prompts the interviewer to give out more data than he asked for; if anything, this actually matches a habit of real consultants, and if you’re lucky, your interviewer may actually give out important pieces you haven’t thought of.

These are only part of the “ninja tips” taught In our Case Interview E2E Secrets Program – besides the math and business intuition for long-term development, a key feature is the instant-result tips and techniques for case interviews.

Once you’ve mastered them, you can nail any case they throw at you!

For more “quality” practice, let’s have a mock case interview with former consultants from McKinsey, BCG, Bain, Oliver Wyman, Strategy& and many other consulting firms. They will help you identify your problem areas and give you actionable feedback, making your preparation much easier and faster.

Hi! This is Kim and welcome to another performance in the Tips & Techniques part of our amazing End-to-end program. You are about to hear a really interesting performance.

There is a common Myth that Profitability cases are easier. Well, for beginners, that’s may make sense, but I would argue that Profitability cases can be really tricky and candidates without good foundation will make about the same level of mistakes regardless of type of cases given.

The profitability case we are about to watch will show that. It’s a very unconventional

Profitability. It started out like a typical one but getting more and more tricky toward the end.

The candidate is fairly good in term of business intuition, but the Tips & Techniques aspect needs a lot of fine tune! Now let’s go ahead and get started! 

It’s actually a little better to playback the case information and ask clarifications. The candidate does not distinguish between the two and do both at a same time. Also, the candidate was asking these clarifications in an unorganized and unstructured fashion. This is not something terrible, but could have been better, especially when this is the very first part of the case, where the crucial first impression is being formed.

My pitch would sound like this:

“That’s a very interesting problem and I am happy to get the chance to solve it. First of all let me tell you my understanding of the case context and key objectives. Then I would like to ask a few clarifying questions regarding a few terminology and concepts. Both of these are to make sure that I will be solving the right problem.

So here is my understanding of the case: The client is ABC. Here are some DEF facts about the situation we just talked about. And the key case question is XYZ.

Does that correctly and adequately summarize the case?”

Once the interviewer confirms, I would move to the clarification part as follows: “Now I would like to ask a few clarification questions. There are three of them: No 1, … No 2, … and No 3, …”

You may see above pitch as obvious but that’s a perfect example of how you should open any cases. Every details matters. We will point out those details in just a second. But before we do that, it’s actually very helpful if you can go back, listen carefully to the above pitch, and try to point out the great components yourselves. Only after that, go back to this point and learn it all together.

Alright, let’s break down the perfect opening.

First of all, you hear me say: “That’s a very interesting problem and I am happy to get a chance to solve it”. This seems trivial but very beneficial in multiple ways:

1. I bought myself a couple of seconds to calm down and get focused. 2. By nature, we as human unconsciously like those who give us compliments. Nothing better than opening the case with a modest compliment to the interviewer.

And (c) I showed my great attitude towards the case, which the interviewer would assume is the same for real future consulting business problems.

You should do that in your interviews too. Say it and accompany it with the best smile you can give. It shows that you are not afraid of any problems. In fact, you love them and you are always ready for them.

Secondly, I did what I refer to as the “map habit”, which is to always say what you are about to do and then do it. Just like somebody in the car showing the drivers the route before cruising on the road. The driver would love it. This is where I said: “Let me tell you my understanding of the case context and key objectives. Then ABC…”.

Third, right at the beginning of the case, I try to be crystal clear and easy to follow. I don’t let the interviewer confused between playing the case vs. asking clarification questions. I distinguish between the two really carefully. This habit probably doesn’t change the outcome of how the case goes that much, but it certainly significantly changes the impression the interviewer has of me.

Fourth, in playing back the case, each person would have a different way to re-phrase. But there are three buckets to always include:

1. Who is the client 2. The facts regarding the client and the situation and (c) The key question and the objective of the case.

Fifth, after playing the case context and objectives, I pause for a second and ALIGN with the interviewer: “Does it correctly and adequately summarize the case?”. This is a habit that every consulting manager loves for young consultants to do. Nobody wants first-year folks to spend weeks of passion and hard-work building an excel model that the team can’t use. This habit is extensively taught at McKinsey, Bain and BCG, so therefore interviewers would love somebody that exhibits this habit often in case interview.

Lastly, when asking clarification questions, you hear me number them very carefully to create the strong impression that I am very organized and structured. I said I have three clarifying questions. Then I number them as I go through each. No.1, No.2, and No.3.

Sometimes, during interviews it’s hard to know exactly how many items you are going to get. One way is to take timeout often to carefully plan your pitch. If this is not possible in certain situations, you may skip telling how many items you have; but you should definitely still number your question: No.1, No.2; and so on. 

Just a moment ago, the candidate actually exhibited a good habit. After going through his clarification questions, the candidate ended by asking the “is there anything else” question. In this case, I actually give out an important piece of data.

Though this is not very common as not every interviewer is that generous in giving out data. But this is a habit management consultants have to have every day when talking to experts, clients, or key stakeholders. The key is to get the most data and insights out of every interview and this is the type of open-ended question every consultant asks several times a day.

To show of this habit in a case interview is very good!

There are three things I would like you to pay attention to:

First, it took the candidate up to 72 seconds to “gather his thoughts”. This is a little too long in a case interview. I intentionally leave the 72 seconds of silence in the recording so you get an idea of how long that is in real situations. But it’s worth-noting here is not only that. While in some very complicated and weird cases, it’s ok to take that long to really think and gather ideas. In this case, the approach as proposed by the candidate is very simple. For this very approach, I think no more than 15 to 20 seconds should be used.

No.2, with that said, I have told I really like the fact that this candidate exhibits the “map” habit. Before going straight to the approach he draws the overall approach first.

No.3. You also see here that the candidate tried to align the approach with me by asking my thoughts on it. As I just said on the previous comment, this is a great habit to have. Not only does it help reduce chance of going into the wrong direction in case interviews, but it also creates a good impression. Consulting interviewers love people doing it often!

Here we see a not-really-bad response that for sure could be much better. The candidate was going into the first branch of the analysis which is Revenue. I would fix this in 3 aspects:

First, even though we just talked about the overall approach, it’s still better to briefly set up the issue tree first then clearly note that you are going into one branch.

Second, this is not a must, but I always try to make my hypothesis as explicitly clear as possible. Here the candidate just implicitly made a hypothesis that the problem is on the revenue side. The best way to show our hypothesis-driven mindset is to explicitly say it.

Third, you hear this a ton of times in our End-to-End program but I am going to repeat it again and again. It is better to show the habit of aligning here too. Don’t just go into revenue, before doing that, give the interviewer a chance to agree or to actually guide you to Cost.

So, summarizing the above insights, my pitch would sound something like this:

“So as we just discussed, a profit problem is either caused by revenue or by cost. Unless you would like to go into cost first, let’s hypothesize that the problem is on revenue side. I would like to look deeper into Revenue. Do we have any data on the revenue?”

And while saying this, you should literally draw an issue tree and point to each as you speak.

There is an interesting case interview tip I want to point out here. Notice how the candidate responds after receiving two data points from me. He went straight into the next question without at least acknowledging the data received and also without briefly analyzing it.

I am glad that the candidate makes this mistakes… well, not glad for him but for the greater audience of this program. I would like to introduce to you the perfect habit of what you should react and do every time you have any piece of data during case interviews. So three things you need to do:

Step 1: Say … that’s an interesting piece of data. This helps the interviewer acknowledge that you have received and understand the data. This also buys you a little time. And furthermore, it’s always a good thing to give out modest compliments to the interviewer.

Step 2: Describe the data, how it looks, is there any special noteworthy trend? In this case, we should point out that revenue actually grew by more than 50%.

Also notice here that I immediately quantified the difference in specific quantitative measurement (in this case, percentage). Saying revenue went up is good, but it’s great to be able to say revenue went up by more than 50%.

Step 3: Link the trend identified back to the original case question and the hypothesis you have. Does it prove, disprove, or open up new investigation to really test the hypothesis? In this case, this data piece actually opened up new investigating areas to test the hypothesis that the bottleneck is within revenue.

My sample pitch for this step 3 would sound like this: “It’s interesting that revenue went up quite a bit. However, to be able to fully reject our hypothesis on the revenue, I would like to compare our revenue to that of the competitors as well.”

Then only at this point, after going through 3 steps above, I ask for the competitors’ revenue like the candidate did.

Notice here that I ended up asking the same question the candidate did. This shows that the candidate does have a good intuition and thought process. It’s just that he did all of these implicitly on his head.

In consulting case interview, it’s always good to do everything as explicitly as possible. Not only is it easier to follow but it helps show your great thought process.

… the rest of the transcript is available in our End To End Case Interview

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Case Interview End-to-End Secrets Program

Elevate your case interview skills with a well-rounded preparation package

Preparing for case interviews is a hard task when you only have 1 week, so the first part you need to learn during this time is fundamentals of case interview

Case interview in consulting is difficult with the passing rate is around 10%. This is because big consulting firms keep an extremely high recruitment standard

A case interview is where candidates is asked to solve a business problem. They are used by consulting firms to evaluate problem-solving skill & soft skills

Case interviews: what finance concepts do I need to know?

Consultants use a wide range of financial concepts on their projects. Case interviews reflect real life examples and you will therefore come across financial concepts when you interview. These concepts range from fairly basic (E.g.: fixed costs) to more advanced (E.g.: return on investment).

The difficulty is that there is an endless list of financial concepts you could learn. But you do not have time to learn and master all of them and doing so should not be the objective of your preparation.

When you prepare for case interviews , you therefore need to ask yourself the following key question: What are the financial concepts I need to master to ace case interviews?

Click here to practise 1-on-1 with MBB ex-interviewers

The answer depends on the position you are applying for. In this blog post, we assume that you are interviewing for a general consultant, associate or manager role at a typical strategy firm (E.g.: McKinsey, BCG, Bain, etc). If you apply specifically to the financial services practice of the firms above, you will need to know more advanced financial concepts than we list below. But for general positions, here is the list of financial concepts you need to master:

• Fixed and variable costs

More advanced

• Return on investment
• Payback period

There is a very small chance that you might come across more exotic financial concepts in your case interviews. But in these cases you will not be expected to know the concept at hand. Instead, your interviewer will expect you to ask clarifying questions about the concept and will help you understand it.

There are three reasons why you do not need to know more financial concepts than the ones listed above:

• First, in our experience, these concepts will enable you to tackle 99% of the cases you will come across in your interviews
• Second, learning more concepts than this would be very time consuming. Instead you should use your time practicing on real case interviews
• Third, consultants themselves usually do not know more financial concepts than the ones we have listed. As a consequence if a more advanced concept is required for your case it is almost certain that your interviewer will help you understand it

Let us now define the concepts you need to know one by one.

We’ve already defined some basic financial concepts the video below. While McKinsey no longer uses the PST, these concepts are still useful to review.

Revenues, sales, or turnover (the three terms are synonyms) are the total amount of money that the company receives from customers by selling its products.

Let’s take an example. Imagine you work for an airline, such as British Airways. You sell plane tickets to your customers. The total amount of money you collect from customers in exchange for plane tickets (and any additional services you provide) is your company’s revenues.

There are two main ways you could be asked to calculate revenues for a company:

You might be given the number of products the company sold (the volume) and the average price of the products. From this, you can obtain revenues using the following formula: Revenues = Volume x Average Price.

Alternatively, you could be given the total sales in an industry (total market sales), and the share of the industry’s revenues represented by the company (the market share). The company’s sales would then be given by: Revenues = Total Market Sales x Market Share.

Either way, remember that revenues or sales are measured in terms of money (Dollar, Pound Sterling, Euro, etc.).

Costs, or expenses, are the total amount of money that the company pays to its various suppliers. In the case of the airline above, this will be the money that the company pays for fuel, leasing airplanes, the salaries of the crew, as well as expenses such as the cost of running their headquarters, their website, or even taxes and interest on loans.

As you can see, the term ‘costs’ covers many different items. Companies will be interested in tracking costs closely.

Fixed and variable costs: Businesses incur two types of costs. Variable costs are the costs that increase with higher sales or higher production. Fixed costs are the costs that would have to be paid regardless of how much is produced. In other words, variable costs change with the level of business activity, while fixed costs don’t.

Let’s imagine you are the CEO of a handbag manufacturer. The cost of the material you use to manufacture the bags is a variable cost: the more bags you produce, the more leather you will need. If one day you produce no handbag, then you don’t have to pay for any extra material. By contrast, the rent you pay for the store has to be paid every month, regardless of whether you sell or produce any bags that month.

As you may already appreciate, the distinction between fixed and variable costs is not always straightforward. For instance, labour costs can be either fixed or variable. As a CEO, your salary is a fixed cost as it will be paid independently of how many bags the company produces. However, during periods of peak production you might hire extra workers at your factory and their salary will therefore be a variable cost.

Even though these difficulties might arise, your interviewer will always allow you to determine easily from the context which cost is fixed and which is variable.

The most important relationship in business analysis is probably the following:

Profits = Revenues – Costs

Profits, also known as net income or net earnings, represents the money left to the owners or managers of the business after all expenses have been paid. Many questions in case interviews revolve around whether or not a company is profitable and what it should do to become more profitable.

Profits are always calculated over a certain period of time – either a quarter or a full year. If you are given fixed and variable costs, you would first have to calculate total costs over the period of time studied, before being able to calculate profits. For instance, in our handbag manufacturing example you would take all fixed costs for one year and add all variable costs for the production of that year to calculate total costs. Annual profits would then be given by subtracting total costs from annual revenues.

Given this definition of profits, there are two ways companies can increase their profits: increase revenues, or decrease costs. You can also see why it might not always be completely straightforward to compare the performance of two companies: one might have higher revenues but higher costs than the other.

4. Return on investment

Return on investment (ROI), or return on capital invested (ROCI), measures how much profits are generated by $100 invested in a given project or business. Let’s say you set up a lemonade stand with an initial investment of $1,000 to pay for a stand, a lemon press, etc. Let’s now assume that you sell $500 worth of lemonade throughout the year and that you incurred $400 in costs to make those sales (E.g.: lemons, sugar, electricity, etc). Your profit for the year is $100 and your return on investment is $100 / $1,000 = 10%.

The formula for return on investment is therefore given by:

Return on investment = Profits over given period / Initial investment

Returns on investment are expressed in percentages and calculated over a given period of time, usually one year. But nothing prevents you from calculating a daily or monthly return on investment. To do so, you just need to divide a day’s worth of profits or a month’s worth of profits by the initial investment. For a given project, profits made in a day are lower than profits made in a month or year, and the daily return on investment is therefore lower. In our example, assuming we make $100 / 365 = $0.27 of profits in a day, the daily return on investment is $0.27 / $1,000 = 0.027% which is lower than 10%.

Let’s focus on the initial investment part of the equation. In your case interviews , you will most likely have to calculate ROIs when a company is investing in a new project. Here, the initial investment will be the upfront expenses the company needs to make to start the business. For instance, if the company wants to start producing cars, building the car factory will be the main initial investment. Similarly, if the company wants to start a supermarket, the main initial investment will be the building, fridges and shelves to set up the supermarket (assuming it buys the building). Initial investments are typically only incurred once, at the beginning of the project.

Finally, there are two ways to increase ROIs: growing profits or decreasing the initial investment. Sometimes, the return on investment for a project will be negative. This indicates that profits are negative and that the project is losing money.

5. Payback period

Payback period measures how much time it takes to earn back your initial investment. In our lemonade stand example, it takes 10 years of profits at $100 per year to pay back the initial investment of $1,000. The payback period is 10 years.

The formula for payback period is therefore given by:

Payback period = Initial investment / Profits over a given period

Payback periods are usually expressed in years by dividing the initial investment by the profits per year . But notice that they can also be expressed in days or months too simply by dividing the initial investment by the profits per day or the profits per month .

Finally, notice that the payback period is simply the inverse of the return on investment. In our lemonade stand example, the yearly return on investment was 10%. To calculate the payback period we could have simply done 1 / 10% = 10 years. Again, in some cases the payback period will be negative which indicates negative profits and that the project is losing money.

Mock interviews

The best way to improve at case interviews is to practise interviewing out loud, and you can do that in three main ways:

• Interview yourself (out loud)
• Practise interviewing with friends or family
• Practise interviewing with ex-interviewers

Practising by yourself is a great way to get started, and can help you get more comfortable with the flow of a case interview. However, this type of practice won’t prepare you for realistic interview conditions. 

After getting some practice on your own, you should find someone who can do a mock interview with you, like a friend or family member.

We’d also recommend that you practise 1-1 with ex-interviewers from top consulting firms . This is the best way to replicate the conditions of a real case interview, and to get feedback from someone who understands the process extremely well.

Click here to book your mock case interview.

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Interview Questions: The Financial Case Interview

Published: Mar 10, 2009

Case interviews aren't just for consultants any more. Many investment banks give questions that could, under other circumstances, be called case interviews--they often involve both strategy and quantitative know-how. The best way to prepare for any interview is to prepare. Here is one such question.

What is a company that you follow closely? Is it a good investment?

Tell your interviewer you would look at various criteria to determine if it's a worthwhile investment, including:

• Earnings growth: Determine how fast the company's earnings are expected to grow, looking at the following factors (among others): the company's historic growth rate; earnings growth rates of other companies in the industry; growth rate of the market the company services; analyst estimates; and perhaps building your own financial model in Excel to test various assumptions.
• Industry analysis: Evaluate the industry the company is in to determine whether this is an attractive industry in which to invest. Look at factors including: how rapidly the industry is growing; whether the industry is consolidating; how intense the competition is among competitors; whether market players have pricing power; and whether products are considered commodities.
• Competitive advantages: Evaluate whether the company has any competitive advantages over its competition, such as patents, exclusive contracts, a differentiated product, brand equity, a lower cost structure, or superior management.
• Valuation: Given its prospects, is the company a good value? You would compare the company's expected earnings growth to various valuation measures, like price-to-earnings ratio, price-to-sales ratio, and price-to-book-value. You would also compare these valuation measures to other companies in the industry to determine whether the company is relatively expensive or relatively affordable.
• Portfolio considerations: Finally, you would want to determine whether an investment in the company fits well with your overall portfolio and objectives. You would want to ask questions like: Does the company help diversify risk in your portfolio? Does the company meet your portfolio's risk profile?

The Tesla Financial Analyst Interview Guide

Walk through the Tesla financial analyst interview process and learn how I landed a job with Tesla’s FP&A Business Operations team.

Introduction

In this article, Michael (former FP&A and Business Operations Analyst at Tesla), will walk you through the steps he took to land a full-time analyst role at Tesla. This guide will cover the various stages of the interview process alongside general notes, tips, and sample interview questions and answers.

#1 Passing the Resume Screen

Tesla received 3 million job applications in all of 2021. This may sound a bit daunting, but there are several different things that you can do to squeeze past this first obstacle.

Clean Up Your Resume

First, you need to clean up your resume and tailor all of your experiences to best fit the financial analyst role or whichever role you are applying for.

Tesla is an innovative, technology-driven company that likes seeing people use data to make logical business decisions. Keep this in mind when tuning up the bullets in your resume.

When writing the experience section of your resume, you should make sure to start each bullet with an action verb. This will help cut down the excess “fluff” in your resume and make it easier for recruiters to understand your previous tasks and experiences.

Sample Action Verbs:

• More Action Verbs

In addition to using action verbs, you should quantify your resume as much as possible so that you clearly state how you added value to your previous companies. For example, you can change “Reduced product line wait time” to “Reduced product line wait time by 3 seconds resulting in a 15% increase in production efficiency.”

For more details and tips, check out our other article on how to write the perfect resume .

Try to Obtain an Employee Referral

With thousands of applications flowing into Tesla each day, an employee referral would certainly help bring your resume to the top of the stack.

Now if you don’t have any existing friends or connections that work at Tesla, you can try to use LinkedIn and cold emails to contact an existing employee to ask for a quick phone call.

When scrolling through your LinkedIn network, try to look for your school alumni and ideally people who work on the finance team or the team that you are applying to. The goal is to hop on a phone call with your connection so that you can learn more about the working roles at Tesla and demonstrate a genuine interest in the company.

For those looking to better their chances of a referral, we recommend you check out our article on Networking Cold Email Templates.

#2 Phone Screen

If you make it past the resume screen, then congratulations, you’ve made it past the largest cutting stage of the application process.

Following the resume screen, you’ll likely have to hop on a call with one recruiter and one or two finance managers. These calls are quite straightforward and very behavioral-focused. Although they seem quite simple, it will be important to give off a good impression and to make your interviewers believe that you will be a good fit on one of their teams.

Preparation Tip: Read Up on Tesla News

• Spend an hour reading online articles on Tesla. Finance-oriented publications like CNBC , The Financial Times , and Bloomberg are great places to start.
• Watch YouTube videos on recent company stories. Tesla has its own channel and Rob Maurer also runs a very informative YouTube channel called the Tesla Daily .
• Read Tesla’s 10-K annual report. Every public company is required to post a publicly available 10-K company report . I’d recommend taking a look at the section on “Risk Factors” and “Management Opportunities, Challenges, and Risks.” (These sections are perfect for coming up with interesting follow-up questions that you can ask your interviewer).

Sample Questions & Answers

The following should give you an idea of the types of questions that you may be asked in these phone screen interviews.

Q: Why do you want to work for Tesla?

Sample Answer:

“Tesla seems to be a very dynamic and innovative company. With this in mind, I figured that this type of work exposure, particularly at the junior level, would be extremely rewarding as I would be forced to learn many things in a rapid environment. Although this may seem daunting for some, I’ve always been the type to throw myself into challenging situations to force myself to figure things out. Tesla has made tremendous progress since its first factory opening in Fremont, California and I’d simply love to take part in its massive global mission.”

Q: Where do you see yourself in 5 years?

“It’s hard to answer that question specifically as 5 years is quite a long time. What I can say is that I would like to spend the first few years of my analyst career learning the little details and all the ins and outs of the business. Then, after building up my fundamentals and overall experience, I would like to transition into a role that would allow me to make thoughtful and impactful business decisions.”

Q: What do you like to do outside of work and school?

“I really enjoy going fishing when I have some free time over the weekend. Although it seems like fishing is a relatively relaxed activity, I actually really enjoy the strategic side of a fishing operation. Whether it's looking a weather and wave height reports or researching specific species and testing different baits and fishing equipment, I actually really enjoy the process of testing out different theories to find what works best for me.”

#3 Excel Case Study Interview

If you make it past the phone screen stage, you’ll likely move on to an Excel case study interview. To prepare for this Excel case study test, I recommend you make sure you are comfortable with basic Excel skills and finance fundamentals.

Excel: In my case study, I ended up using simple formulas like SUMIFS and VLOOKUPS and I didn’t have to use pivot tables or macros. That said it certainly wouldn’t hurt to learn pivot tables and other Excel functions as they’ll likely switch up the case studies every now and then.

Finance: The Excel case study (at least when interviewing for the financial analyst role) is very much finance oriented. At a minimum, make sure you understand the ins and outs of an income statement so that you can comfortably solve for gross and net profit margins, EBITDA, etc.

General Tip: They will likely ask you for your insights or recommendations given the figures and data available. If certain figures or assumptions seem a bit high, perhaps you could recommend the analyst to speak with the manufacturing team or distribution team for more details on mandatory vs optional expenses (this makes it seem like you are familiar with real work scenarios).

If you’re interested in learning more about how you can best prepare for your interviews, consider checking out our Excel for Business & Finance Course and our Complete Finance & Valuation Course . These two courses should help you comfortably tackle finance interviews at the most competitive corporations and investment banks!

#4 Final Round: 4-5 Back-to-Back 30-Minute Interviews

If you make it past the Excel case study test, you’ll likely have an opportunity to take part in a final round interview consisting of 4-5 back-to-back 30-minute interviews with members from various finance teams.

These interviews will consist of mostly technical and brain teaser questions. With this in mind, you should expect to open up Excel during the interview to share your screen and walk through mini case studies and teaser problems.

General Tip: Once you find a reasonable solution, don’t just stop at the numerical answer. The interviewer wants to see how you can connect the data to actionable business ideas. You’ll usually want to make some surface-level assumptions to arrive at a figure, then tell your interviewer the types of follow-up questions you would ask if you had more time to work on this in a real business setting.

You should also expect a couple of behavioral questions at the end of the interview alongside an opportunity to ask the interviewer general questions.

The following should give you an idea of the types of problem-solving questions that you might be asked in the final round of interviews.

Q: Tell me 3 different methods that you could use to price a Tesla car entering a new market?

• You can use a competitive pricing model. Simply put, you can look up the prices of competing cars in the new market and price the Tesla car within a certain range of its competitors (maybe plus or minus 5%). It will also be interesting to factor in any potential tax benefits that some countries give to electric vehicle consumers as that could give Teslas a big pricing edge over traditional combustion engine vehicles.
• You can use a cost-based pricing model. In this method, you can add up all the costs required to manufacture and distribute a vehicle. Then you can apply a percentage premium to that cost basis to arrive at the consumer-facing price. Perhaps you could use some industry-standard or comparable markup figure to determine the percentage premium to use.
• You could create a model based on customer income. In this method, you could start by looking at all of the existing markets, and create a ratio using the Tesla prices in those markets relative to the median family income in that area. Once you have that ratio, you can apply it to your new market by finding the median family income in the new area.

Q: Identify the bottleneck of the car manufacturing line given XYZ data

This question will likely require you to use simple math to figure out which stage in the production line is taking up the most time. Once you figure out the bottleneck, the interviewer might ask you a follow-up question modifying the figures of the original scenario.

For example, your interviewer might say: “If you were presented with the opportunity to invest $X amount of dollars to cut down the bottleneck time by 25%, would you proceed with the project?”

To approach this problem, you would likely have to calculate how much more product you would be able to produce and the dollar value of that additional product. From there, you could calculate the payback period or essentially how long it would take for the additional profits to cover the cost of the initial investment.

#5 Job Offer!

If you make it past the final round of interviews, congratulations, you’ll likely receive an email and a call from the HR team.

If you don’t get the job offer, don’t worry and keep your chin up. It’s already quite an accomplishment to make it to the final round of interviewers. Even if you don’t end up at Tesla, you can still apply to many other great companies like Apple, Amazon, Visa, and more.

If you're fishing around for a new job, consider signing up for our weekly newsletter for more career news and interesting job opportunities that we find at fortune 500 companies across the globe.

Additional Resources

If you’re looking to better prepare your technical skills for any competitive business or finance interviews, consider checking out our courses using the get started button below!

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Building a cash flow statement from scratch using a company income statement and balance sheet is one of the most fundamental finance exercises commonly used to test interns and full-time professionals at elite level finance firms.

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5 Key Case Interview Questions

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There are types of case study interview questions that you’ll run across more frequently than others. Once you start recognizing these patterns, you will be able to create  frameworks  more accurately and efficiently. In this article, Management Consulted provides case study interview questions and answers for the top 5 most common business problems presented during case study interview questions. See a breakdown of the 5 key case interview questions and answers here

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280 Free Case Interview Examples

Do you want to get access to over 280 free case interview examples (with answers)?

If you have interviews planned at McKinsey ,  The Boston Consulting Group , or any other consulting firm, you are probably looking for case interview examples.

So, to help you prepare, I have compiled a list of 280 free case interview examples:

• Over 30 free case interview examples (+ interview prep tips) from the websites of top consulting firms
• More than 250 free case interview examples from top business school case books

Moreover, you’ll get  my take on which case studies you will likely have in interviews.

In short, the resources listed hereafter will be very helpful if you are starting out or have already made good progress in preparing for your case interviews.

One last word : check out this free case-cracking course to learn how to crack the most recent types of case questions consulting firms use in actual interviews.

Let’s get started!

Table of Contents

Get the latest data about salaries in consulting, mckinsey: tips and case interview examples.

McKinsey & Company’s website is definitely one of my favorites.

Because this gives so much insightful information about the role of a consultant and what the hiring process looks like.

Therefore, I highly recommend spending time on their website, even if you are not targeting McKinsey.

In the meantime, here are 8 McKinsey case interview examples

• Electro-light
• GlobaPharma
• National Education
• Talbot trucks
• Shops corporation
• Conservation forever

Check out the McKinsey Hub : A library of 20+ free resources that cover everything you need to secure a job offer at McKinsey.

Besides, here is another McKinsey case interview example.

This case interview question has been recently asked in a real interview:

𝘦𝘊𝘢𝘳𝘊𝘰, 𝘢 𝘑𝘢𝘱𝘢𝘯𝘦𝘴𝘦 𝘭𝘦𝘢𝘥𝘪𝘯𝘨 𝘮𝘢𝘯𝘶𝘧𝘢𝘤𝘵𝘶𝘳𝘦𝘳 𝘰𝘧 𝘦𝘭𝘦𝘤𝘵𝘳𝘪𝘤 𝘱𝘢𝘴𝘴𝘦𝘯𝘨𝘦𝘳 𝘷𝘦𝘩𝘪𝘤𝘭𝘦𝘴, 𝘩𝘢𝘴 𝘣𝘦𝘦𝘯 𝘴𝘵𝘳𝘶𝘨𝘨𝘭𝘪𝘯𝘨 𝘸𝘪𝘵𝘩 𝘢 𝘭𝘰𝘸 𝘮𝘢𝘳𝘬𝘦𝘵 𝘴𝘩𝘢𝘳𝘦 𝘪𝘯 𝘵𝘩𝘦 𝘉2𝘉 𝘴𝘦𝘨𝘮𝘦𝘯𝘵. 𝘛𝘩𝘦𝘺 𝘦𝘯𝘫𝘰𝘺 𝘴𝘵𝘳𝘰𝘯𝘨 𝘱𝘰𝘴𝘪𝘵𝘪𝘰𝘯𝘴 𝘪𝘯 𝘵𝘩𝘦 𝘉2𝘊 𝘴𝘱𝘢𝘤𝘦, 𝘣𝘰𝘵𝘩 𝘥𝘰𝘮𝘦𝘴𝘵𝘪𝘤𝘢𝘭𝘭𝘺 𝘢𝘯𝘥 𝘪𝘯 𝘵𝘩𝘦 𝘪𝘯𝘵𝘦𝘳𝘯𝘢𝘵𝘪𝘰𝘯𝘢𝘭 𝘮𝘢𝘳𝘬𝘦𝘵. 𝘏𝘰𝘸𝘦𝘷𝘦𝘳, 𝘦𝘊𝘢𝘳𝘊𝘰’𝘴 𝘴𝘢𝘭𝘦𝘴 𝘵𝘰 𝘴𝘮𝘢𝘭𝘭 𝘢𝘯𝘥 𝘮𝘦𝘥𝘪𝘶𝘮 𝘴𝘪𝘻𝘦 𝘣𝘶𝘴𝘪𝘯𝘦𝘴𝘴𝘦𝘴 𝘤𝘰𝘯𝘵𝘪𝘯𝘶𝘦 𝘴𝘵𝘢𝘺𝘪𝘯𝘨 𝘧𝘢𝘳 𝘣𝘦𝘭𝘰𝘸 𝘦𝘹𝘱𝘦𝘤𝘵𝘢𝘵𝘪𝘰𝘯𝘴. 𝘛𝘩𝘦 𝘊𝘌𝘖 𝘩𝘢𝘴 𝘪𝘯𝘷𝘪𝘵𝘦𝘥 𝘺𝘰𝘶 𝘵𝘰 𝘩𝘦𝘭𝘱 𝘵𝘩𝘦𝘮 𝘰𝘶𝘵.

How would you approach this business problem?

When ready, check this video below where I present how to approach this problem.

BCG: Tips And Case Interview Examples

The Boston Consulting Group website  states something very important: the goal of the hiring process is to get to know you better, which means, in the context of Consulting interviews, understanding how you solve problems .

Remember this: in case interviews,  to show how you think is MUCH MORE IMPORTANT than to find an answer to the case .

As a result, you will have case study questions to showcase your problem-solving skills. Likewise, fit interviews have the same purpose: to show what problems you faced and how you resolved them.

• BCG interview prep tips
• BCG’s interactive case tool
• BCG case interview example: climate change challenge
• BCG case interview example: GenCo
• BCG case interview example: FoodCo

Check out the BCG Hub : A library of 20+ free resources that cover everything you need to secure a job offer at BCG.

Bain: Tips And Case Interview Examples

Bain & Company’s website highlights something very important: successful applicants manage to turn a case interview into a conversation between two consultants .

In other words, you don’t want to appear as a candidate but as a consultant !

To do this, you need to master the main problem-solving techniques that consulting firms want to see.

• Bain interview prep tips here and here
• Bain case interview examples: coffee , fashioco
• Bain case interview sample videos: a first video , a second video

Check out the Bain Hub : A library of 20+ free resources that cover everything you need to secure a job offer at Bain & Company.

Deloitte: Tips And Case Interview Examples

As for the BCG’s section above, the Deloitte website clearly states that in case interviews , it is much more important to show how you think and interact with your interviewer than to find the right answer to the case.

• Deloitte interview prep tips
• Deloitte case interview examples: here (more than 15 case interview examples)
• Deloitte case interview example: Federal Agency
• Deloitte case interview example: Recreation Unlimited
• Deloitte case interview example: Federal benefits Provider
• Deloitte case interview example: Federal Civil Cargo protection Bureau

Get 4 Complete Case Interview Courses For Free

You need 4 skills to be successful in all case interviews: Case Structuring, Case Leadership, Case Analytics, and Communication. Join this free training and learn how to ace ANY case questions.

Oliver Wyman: Tips And Case Interview Examples

Like the Deloitte website, Oliver Wyman’s website points out that, above all,  you must demonstrate your ability to think in a structured, analytical, and creative way.

In other words, there are no right or wrong answers, but only showing how you solve problems matters.

• Oliver Wyman interview prep tips
• Oliver Wyman case interview examples: here (Aqualine) and here (Wumbleworld)

Kearney: Tips And Case Interview Examples

Now it’s time to tell you something you could have heard a hundred times.

Yet too many candidates do it.

Do NOT force your solution to adapt to a standard framework . As a result, this will only take you to a place you don’t want to go: the pool of rejected candidates .

To learn more about this, check the “What Not To Do” section on the AT Kearney website .

• Kearney interview prep tips
• Kearney case interview examples: here and here
• Kearney case book: here

Strategy&: Interview Prep Tips

Strategy& doesn’t provide case study examples on its website, but it shares insights on career progression, which I recommend reading when you prepare for your fit interviews.

• Strategy& interview prep tips

Roland Berger: Tips And Case Interview Examples

I like the examples of case studies presented on the Roland Berger website .

Because the two examples of case studies are very detailed and illustrate the kind of solutions your interviewers expect during case discussions.

• Roland Berger interview prep tips
• A first Roland Berger case interview example: part 1 and part 2
• A second Roland Berger case interview example: part 1 and part 2

Alix Partners: Interview Prep Tips

Like Strategy&, Alix Partners doesn’t provide case study examples on its website.

However, they give an overview of what they are looking for: they want entrepreneurial, self-starter, and analytical candidates, which are skills that all consulting firms highly appreciate .

• Alix Partners interview prep tips

OC&C: Interview Prep Tips

Here are two case study examples from OC&C:

• Imported spirit
• Leisure clubs

253 Case Studies From Business School Case Books

Most of these 253 case study examples are based on case interviews used by consulting firms in real job interviews .

As a result, you can have a good idea of the case study questions you can have when interviewing at these firms .

The Full List Of 253 Free Case Study Examples

• Chicago business school
• Australian Graduate School of Management
• Columbia business school
• Harvard business school
• Wharton business school (2009)
• Wharton busines school (2017)
• Darden business school

Do you want to practice a specific type of case study? Now you can…

I have sorted this list of 253 case studies by type:  profitability, market expansion, industry analysis, pricing, investment or acquisition,  and guesstimates (also known as market sizing questions).

Bonus #1: Know The Types Of Cases You Are Likely To have During Your Interviews

• Profitability cases (29% of cases from that list)
• Investment cases (19% of cases from that list)
• Market sizing questions (15% of cases from that list)

As a result, assuming you’ll have 6 interviews (and therefore 6 case interviews) during the recruitment process:

• “Profitability cases are 29%”  means that chances to have 2 profitability case studies during your recruitment process are very high
• “Investment cases are 19%”  means that chances to have 1 investment case study during your recruitment process are very high.
• “ Guesstimates are 15%”  means that chances of having  1 market sizing question during your recruitment process are high.

Bonus #2: The 10 Cases I Recommend You Doing Now

Over 250 examples of case interviews are a great list, and you may not know where to start.

So, I’ve compiled a list of my 10 favorite case studies.

The 5 case studies I recommend doing if you are a BEGINNER

1. stern case book: drinks gone flat (starting at page 24).

This is a good introduction to a common type of case (declining sales here). I liked the solution presented for this case, particularly how it started by isolating declining sales (what range of products? Volumes or prices, or both?).

2. Stern case book: Sport bar (starting at page 46)

This is an investment case (should you invest in a new bar). Even if the solution presented in this case book is not MECE , it covers the most common quantitative questions you might have in such a case. I recommend doing this case.

3. Stern case book: MJ Wineries (starting at page 85)

This is a profitability case. I liked the solution presented in this case because it illustrates how specific good candidates should be. The case concerns wine, so a good candidate should mention the quality of lands and grapes as important factors.

4. AGSM case book: Piano tuners (starting at page 57)

This is a typical market sizing question. How to answer this type of question is a must-know before going to your interviews.

5. Darden case book: National Logistics (starting at page 49)

Again, this is a very common case (how to reduce costs). I liked the broad range of questions asked in this case, covering key skills assessed by consulting firms during case interviews: brainstorming skills (or creativity), quantitative skills, and business sense.

The 5 case studies I recommend if you are more ADVANCED in your preparation

1. stern: the pricing games (starting at page 55).

This case study asks you to help your client assess different business models. I liked this case because the range of issues to tackle is quite broad.

2. Wharton 2017: Engineer attrition at SLS Oil & Gas Services (starting at page 55)

I liked this case study because the case prompt is uncommon: your client has been facing a very high attrition rate among its population of Engineers. As a result, it’s very unlikely that your solution fits a well-known framework, and you’ll have to demonstrate your problem-solving skills by developing a specific solution.

3. Wharton 2017: Pharma Company Goes International, Outsources Benefits, Integrates New Technology (starting at page 95)

This case is about a client considering outsourcing a part of their activity. Even though I don’t know if this type of case study is very common, I had many case studies like this when I passed my interviews a few years ago. And I always found them difficult!

4. Insead: Gas retail case (starting at page 73)

The question in the problem statement is very broad, making this case difficult. So, only good candidates can have a structured case discussion here.

5. Darden: Fire Proof (starting at page 84)

This is a market entry case. Try to solve it by developing a structure as MECE as possible.

CareerInConsulting.com's Free Resources

Access my exclusive free training to help you prepare for your case interviews .

Besides, you can learn my step-by-step guide to answering market sizing questions .

You’ll get my formula to solve all market sizing questions.

Moreover, if you are a beginner, you can read my article on how to solve business cases (+ a 4-week prep plan to get case interview ready).

Also, check these 11 must-know frameworks to ace your case interviews.

Finally, you can read the articles in the blog section of my website.

That’s quite a list.

To complete this list, check this free case interview course , where you’ll find case questions recently asked in actual interviews.

Now, I’d like to hear from you.

Which key insights were new to you?

Or maybe I have missed something.

Either way, let me know by leaving a comment below.

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You need 4 skills to be successful in all case interviews: Case Structuring, Case Leadership, Case Analytics, and Communication. Enroll in our 4 free courses and discover the proven systems +300 candidates used to learn these 4 skills and land offers in consulting.

Financial Due Diligence Case Study Interview

How to ace the Transaction Advisory (TAS) case study

Table of contents

• Intro to the financial due diligence case study interview

Why is the FDD case study interview important?

• What to expect

How to prepare

Note: There are many different names and acronyms for “financial due diligence” including FDD, transaction advisory (TAS), deal advisory, accounting diligence, and M&A due diligence. These terms are used interchangeably throughout the article.

Intro to the financial due diligence case study

The financial due diligence case study is an important part of the interview process. The idea of having to complete a case study during the interview process often causes anxiety among interviewees. 

The case study interview is often a difficult part of the interview process because it tests your ability to think critically about a business and articulate your findings in a time-sensitive environment. Additionally, this portion of the interview process is difficult due to its variability. There are a number of different scenarios that can be presented. For example, the exercise could just be a review and subsequent discussion/presentation or could test your understanding of accounting and your ability to perform key excel skills. 

The case study is often the most nerve-racking part of the transaction advisory interview process because it represents the “unknown”. Luckily, Financialduediligenceinterview.com is here to help calm your nerves. 

The financial due diligence case study is an important step in the interview process because it tests a candidate’s ability to think critically about a business in a time-sensitive environment, basic accounting knowledge, understanding of the financial due diligence process, and key excel skills. 

If a candidate does not understand the basics, then companies will have to spend extra time teaching new hires in an already busy/stressful job. 

However, don’t let this scare you. If you aren’t an experienced hire, then the interviewers will not expect you to perform like one. As stated above, the goal of the case study interview (for non-experienced hires) is to make sure the candidate understands the basics, which financialduediligenceinterview.com can teach you. Additionally, a candidate’s understanding of the basics proves that he or she has done their research and is serious about the opportunity. 

What to expect from a transaction advisory case study?

There are a few different forms of case studies that can be presented in a transaction advisory interview. Generally, the case study will fall into one of the below categories (by order or probability):

• Review of a ~5-10 page business scenario/overview and presentation of findings
• Review of a ~5-10 page business scenario, basic excel model, and subsequent presentation of findings

You will have ~1-2 hours to complete the case study and will present for ~30 minutes. The typical case study will include a 5-10 page business scenario/summary as well as one page of instructions. 

First, the business scenario will be a fictional M&A transaction (i.e., your client is buying a business). The business scenario will include a detailed summary of the transaction, a summary of the business type and operating model, a summary of the business performance and history, and monthly trended financial statements. Buried throughout the summary (similar to a real-world project) and financial statements will be items to consider in the financial due diligence process. Specifically, you will be instructed to focus on the potential quality of earnings adjustments and red flags that should be brought up to your client. 

If the case study involves a modeling test, this will generally require you to leverage trial balance data to build a basic income statement and balance sheet that tie together via equity. From there you will be asked to build a basic adjusted EBITDA table. See our complete financial due diligence interview guide for a full example case study and excel model to help you prepare.

Practice makes perfect. The best way to prepare for the case study interview is to practice. First, you will need to nail down your understanding of the process and goals of financial due diligence. Next, you will need to learn how to analyze a business with an eye toward identifying red flags and potential quality of earnings adjustments. Finally, you will need to work on your ability to present your findings in a clear, concise, and confident manner. 

Leverage our free resources or complete financial due diligence interview guide to help you prepare for all of these items.

Full interview guide

Learn how to master the interview process for for roles at big 4 and other elite FDD firms.​

Free resources

Leverage our free resources to help you prepare for the FDD interview process.

The transaction advisory case study can feel like a daunting task, but there is no reason to be worried. The goal of the case study is not to stump you, but to confirm that the candidate has the basic skillsets needed for the job. If you prepare adequately then there should be no problem. 

Hacking the Case Interview

Although case interviews do not require any technical math or finance knowledge, there are basic formulas that you should know in order to do well in order to master case interview math .

This article will cover the 26 formulas you should know for case interviews. These formulas are organized into the following categories:

• Profit Formulas
• Investment Formulas
• Operations Formulas
• Market Share Formulas
• Accounting, Finance, and Economics Formulas

If you’re looking for a step-by-step shortcut to learn case interviews quickly, enroll in our case interview course . These insider strategies from a former Bain interviewer helped 30,000+ land consulting offers while saving hundreds of hours of prep time.

Profit Formulas for Case Interviews

1. Revenue = Quantity * Price

Revenue is the amount of money a company brings in from selling its products. This can be calculated by taking the number of units sold and multiplying it by the price per unit.

Example: Your company sells shirts for $20 each. Last year, your company sold 1,000 shirts. So, your total revenue last year was 1,000 * $20 = $20,000.

2. Total Variable Costs = Quantity * Variable Costs

Costs are payments that a company needs to make in order to run and operate its business. There are two different types of costs, variable costs and fixed costs.

Variable costs are costs that directly increase for each additional unit of product made. It represents the cost of raw materials needed to make the product.

Total variable costs are calculated by taking the number of units produced or sold and multiplying it by the raw material cost per product.

Example: It costs your company $5 to purchase the raw materials needed to make a shirt. If your company sold 1,000 shirts last year, the total variable costs are 1,000 * $5 = $5,000.

3. Costs = Total Variable Costs + Fixed Costs

Total costs for the company can be calculated by adding total variable costs and fixed costs.

Fixed costs are costs that do not directly increase for each additional unit of product made. They may include costs such as rent for the building or equipment needed to make the product.

Example: Your company pays annual rent of $10,000. It also leases the equipment it needs to make its shirts for $2,000 a year. Therefore, fixed costs are $10,000 + $2,000 = $12,000. Total variable costs were calculated to be $5,000 from the previous example. So, total costs are $12,000 + $5,000 = $17,000.

4. Profit = Revenue – Costs

Profit is the amount of money the company keeps after paying for all of its costs. Profit is calculated by subtracting total costs from total revenue.

Example: Last year, your shirt company generated revenues of $20,000 and had costs of $17,000. The profit last year was $20,000 - $17,000 = $3,000.

5. Profit = (Price – Variable Costs) * Quantity – Fixed Costs

This formula summarizes the previous four formulas into one concise and simplified equation.

6. Contribution Margin = Price – Variable Cost

Contribution margin represents how much money each product sold brings into the company after accounting for the cost of raw materials needed to make the product.

Example: If your company’s shirts sell for $20 and raw materials cost $5, then the contribution margin is $20 - $5 = $15 per shirt.

7. Profit Margin = Profit / Revenue

Profit margin represents the percentage of revenue that a company keeps as profit after taking into account all of its costs.

Example: Last year, your company generated $20,000 in revenue and had $17,000 in costs. Its profit was $3,000. Therefore, your company’s profit margin is $3,000 / $20,000 = 15%.

Investment Formulas for Case Interviews

8. Return on Investment = Profit / Investment Cost

Companies make investments by spending money in the hopes of earning even more money in the future as a result of the investment. Return on investment, or ROI or short, represents how much additional money a company generates relative to the size of its initial investment.

ROI is calculated by taking the profit that the company generated from the investment and dividing it by the investment cost.

Example: Your company spent $5,000 on marketing to advertise its shirts. As a result, the company generated an additional $6,000 in profits from selling shirts. This profit does not yet take into account the costs of the marketing campaign.  Therefore, the company has a net increase in profits of $1,000 from its original $5,000 investment. The ROI is $1,000 / $5,000 = 20%.

9. Payback Period = Investment Cost / Profit per Year

Payback period represents how long it would take a company to recoup the money it spent on an investment. It is usually specified in years.

Example: Your company invested in redesigning its shirts for $5,000. As a result, the company expects annual profits to increase by $1,000 for every year going forward. Therefore, the payback period for this investment is $5,000 / $1,000 = 5 years.

Operations Formulas for Case Interviews

10. Output = Rate * Time

The output of production can be calculated by taking the rate of production and multiplying it by time.

Example: The machine that your company uses to produce shirts can produce 5 shirts per hour. If the machine runs for 12 hours, then it will produce 60 shirts.

11. Utilization = Output / Maximum Output

Utilization represents how much a factory or machine is being used relative to its maximum possible output.

Example: The machine that your company uses to produce shirts can produce 5 shirts per hour. Therefore, its maximum capacity in a day is 5 shirts per hour * 24 hours = 120 shirts. If your machine is being used to only produce 60 shirts per day, then it is at 60 / 120 = 50% utilization.

Market Share Formulas for Case Interviews

12. Market Share = Company Revenue in the Market / Total Market Revenue

Market share measures the percentage of total market sales a particular company has. Market shares can range from 0%, no presence in the market, to 100%, complete dominance in the market.

Example: Your company sells shirts and generates $100M in annual revenues. The market size of shirts is $500M. Therefore, your company has a market share of $100M / $500M = 20%. 

13. Relative Market Share = Company Market Share / Largest Competitor’s Market Share

Relative market share compares a company’s market share to the largest competitor’s market share. It measures how strong of a presence a company has relative to the market leader. If the company is the market leader, relative market share measures how much of a lead they have over the next largest player.

Instead of using company market share and the largest competitor’s market share, you can use company revenue and the largest competitor’s revenue. This will give you the same answer.

Example: Your company has a 20% market share in the shirts market. Your largest competitor has a 50% market share. Therefore, your relative market share is 20% / 50% = 0.4.

Example 2: Your company is the market leader and has a 50% market share in the shirts market. Your largest competitor has a 25% market share. Therefore, your relative market share is 50% / 25% = 2.

Accounting, Finance, and Economics Formulas for Case Interviews

These formulas are much less commonly seen in case interviews than the previous formulas. You likely won’t need to use these formulas since they require more technical knowledge of accounting, finance, and economics.

However, you should still be familiar with these formulas in the small chance that one of these concepts shows up in your case interview.

14. Gross Profit = Sales – Cost of Goods Sold

Gross profit is a measure of how much money a company makes from selling its product after taking into account the costs associated with making and sellings its product. These costs are often called the cost of goods sold.

Compared to the previous profit formula, which was simply revenue minus costs, gross profit is always higher since it does not take into account all of the costs of the business.

Example: Your company sold $20,000 of shirts last year. The cost to produce these shirts was $5,000. Therefore, your gross profit is $20,000 - $5,000 = $15,000.

15. Operating Profit = Gross Profit – Operating Expenses – Depreciation – Amortization

Operating profit is calculated by taking gross profit and subtracting all operating expenses and depreciation and amortization.

Operating expenses may include rent, utilities, maintenance and repairs, advertising and marketing, insurance, and salaries and wages. So, operating profit is always less than gross profit.

Depreciation is the spreading of a fixed asset’s cost over its useful lifetime.

For example, let’s say that a company purchases a new machine for $10,000 that it expects to last for 5 years. Instead of stating that it incurred $10,000 in costs in its first year, the company may choose to state that the new machine costs $2,000 per year for the next five years.

Amortization is the spreading of an intangible asset’s cost over its useful lifetime. It is the exact same principle as depreciation except that it deals with intangible assets, or assets that aren’t physical.

For example, let’s say that a company purchases a patent for $10,000 and expects the benefits of the patent to last for 20 years. Instead of stating that it incurred $10,000 in costs in its first year, the company may choose to state that the patent costs $500 per year for the next twenty years.

Example: You sold $20,000 of shirts last year. Cost of goods is $5,000, operating expenses are $10,000, depreciation of a machine is $2,000, and amortization of a patent is $500. Therefore, your operating profit is $20,000 - $5,000 - $10,000 - $2,000 - $500 = $2,500.

16. Gross Profit Margin = Gross Profit / Revenue

This is the exact same formula as the profit margin formula except that gross profit is used. Gross profit margin measures how much money a company keeps from selling its products after taking into account cost of goods sold.

Example: Your company has a gross profit of $15,000 from $20,000 of revenue. Therefore, your gross profit margin is $15,000 / $20,000 = 75%.

17. Operating Profit Margin = Operating Profit / Revenue

This is the exact same formula as the profit margin formula except that operating profit is used. Operating profit margin measures how much money a company keeps from sellings its products after cost of goods sold, operating expenses, depreciation, and amortization is taken into account.

Example: Your company has an operating profit of $2,500 from $20,000 of revenue. Therefore, your operating profit margin is $2,500 / $20,000 = 12.5%.

18. EBITDA = Operating Profit + Depreciation + Amortization

EBITDA stands for earnings before interest, taxes, depreciation, and amortization. It is a financial metric used to measure a company’s cash flow or the amount of cash that a company has generated in a period of time.

To calculate EBITDA, start with operating profit and add back depreciation and amortization expenses.

Example: Your company has an annual operating profit of $2,500. Depreciation expenses are $2,000 and amortization expenses are $500. Therefore, your EBITDA is $2,500 + $2,000 + $500 = $5,000.

19. CAGR = (Ending Value / Beginning Value)^(1/Time Period) – 1

CAGR stands for compounded annual growth rate. It measures how quickly something is growing year after year.

Example: Your company generates $144M in annual revenue. Two years ago, your company only generated $100M. Over this time period, your CAGR was ($144M / $100M)^(1/2) - 1= 20%. In other words, your company grew by 20% each year for two years.

20. Rule of 72

The Rule of 72 is a shortcut used to estimate how long a market, company, or investment would take to double in size. To use it, simply divide 72 by the annual growth rate to get an estimate for the number of years needed to double in size.

Example: Your company is growing steadily at 9% per year. Using the Rule of 72, we’d expect it to take 72 / 9 = 8 years for your company to double in size if it maintains its current growth rate.

21. NPV = Cash Flow / [(1 + Discount Rate)^(Time Period)]

NPV stands for net present value. It measures how much future cash flow is worth today.

Receiving $1,000 right now is not the same as receiving $1,000 five years from now. If you received $1,000 right now, you could invest it and grow your money. Therefore, it is better to receive $1,000 right now than to receive the same amount in the future.

Net present value takes this into account.

Cash flow is the amount of money you expect to receive in the future. Time period is how many years in the future you will receive that amount of money. The discount rate is the return you expect to get from investing your money.

Example: You expect to receive $1,000 five years from now. You expect that you will be able to get 8% annual returns by investing in the stock market. Therefore, the net present value of your future cash flow is $1,000 / [(1 + 0.08)^5] = $680.58.  In other words, receiving $680.58 today would give you the same value as receiving $1,000 five years from now.

22. Perpetuity Formula: Present Value = Cash Flow / Discount Rate

An annuity is a fixed sum of money paid at regular intervals such as every year. Perpetuity is an annuity that lasts forever.

The present value of a perpetuity is calculated by taking the cash flow of each payment and dividing it by the discount rate.

Example: You are expecting to receive $1,000 per year for the rest of your life. You expect that you will be able to get 8% annual returns by investing in the stock market. Therefore, the present value of this perpetuity is $1,000 / 0.08 = $12,500.  In other words, receiving $12,500 today would give you the same value as receiving $1,000 each year for the rest of your life.

23. Return on Equity = Profit / Shareholder Equity

Return on equity , or ROE for shirt, measures how effectively a company is using its assets to create profits. It is calculated by taking profit and dividing by shareholder equity, which represents the net worth of a company.

In other words, shareholder equity is the value of a company’s total assets minus its total liabilities.

Example: Your company’s profit this year is $100M. Shareholder equity, or the net worth of the company is $1B. Your company has a ROE of $100M / $1B = 10%.

24. Return on Assets = Profit / Total Assets

Return on assets , or ROA for short, measures how profitable a company is relative to its total assets. In other words, it shows how efficiently a company is using its assets to generate income.

Assets can be anything that has value that can be converted into cash. This includes cash, property, equipment, inventory, and investments.

Example: Your company’s profit this year is $100M. Your company as $400M worth of assets. Your company has a ROA of $100M / $400M = 25%.

25. Price Elasticity of Demand = (% Change in Quantity) / (% Change in Price)

Elasticity is a measure of how much customer demand changes for a product given a change in the product’s price. In almost all cases, an increase in a product’s price results in a decrease in customer demand. Therefore, price elasticity of demand is usually negative.

Example: Your company has decreased its product’s price by 10%. As a result, the number of units sold has increased by 20%. Therefore, the price elasticity of demand is 20% / -10% = -2.

26. Cross Elasticity of Demand = (% Change in Quantity for Good #1) / (% Change in Price for Good #2)

Cross elasticity of demand measures how much customer demand changes for a product given a change in price of a different product.

If two products are complements, an increase in price of one product will result in a decrease in demand of the other product. Complementary products have a negative cross elasticity of demand.

If two products are substitutes, an increase in price of one product will result in an increase in demand of the other product. Substitute products have a positive cross elasticity of demand.

Example: A competitor has decreased the price of a competing product by 20%. As a result, the demand for your product has dropped by 10%. The cross elasticity of demand is -10% / -20% = 0.5.

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The Venture Capital Case Study: What to Expect and How to Survive

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There’s plenty of information online about case studies in finance interviews (IB, PE, etc.), but the venture capital case study remains a bit mysterious.

Depending on your source, a VC case study might consist of a “ cap table ” exercise where you calculate the company’s ownership over many investment rounds and the proceeds to each group upon exit…

…but it could also be a qualitative discussion of a market, an evaluation of a specific startup, or even a simple 3-statement model .

But if you’re interviewing at an early-stage VC fund (i.e., Seed and Series A investments), the most common type is the “Evaluate a startup and recommend investing or not investing” one.

The VC firm might give you a short investment memo or slide deck for the company, ask you to read it, and then say “yes” or “no” based on your analysis and interpretation.

We’ll go through a short example for a fictional startup called PitchBookGPT , which comes directly from our new Venture Capital & Growth Equity Modeling course .

This is a summary version, but it should be enough to give you some practice:

The Video Tutorial and the Files

If you prefer to watch or listen to this tutorial, you can get the 14-minute video walkthrough below:

If you prefer to read, you can continue with this article.

You can get the files, including the company’s pitch deck, here:

• PitchBookGPT – Seed Round Pitch Deck (PDF)
• Venture Capital Case Study Prompt (PDF)
• Venture Capital Case Study Solutions and Investment Recommendation (PDF)
• Case Study Walkthrough and Explanation – Slides (PDF)
• SaaS Valuation Multiples and Historical Data (PDF)

Video Table of Contents:

• 0:00: Introduction
• 1:58: Part 1: What to Expect in VC Case Studies
• 3:10: Part 2: What Do VCs Want in Early-Stage Investments?
• 4:51: Part 3: “The Numbers” for PitchBookGPT
• 8:16: Part 4: The Market, Product, and Team
• 11:45: Part 5: Recommendation and Counter-Factual
• 13:04: Recap and Summary

This Venture Capital Case Study Example: PitchBookGPT

In short, this startup is riding the AI hype train and plans to offer a subscription service that will automate parts of the pitch book creation process at investment banks.

It won’t replace Analysts or Associates because it can’t create entire presentations with all the correct details.

But it speeds up the process by generating slide templates based on your queries, presentation data, and free examples on the sec.gov site .

For example, if you type in “ SPAC vs. IPO ” or “Market overview slide with monetary and fiscal factors,” the software will generate sample slide images, and you can click the one you want to get an editable PowerPoint version:

The “artificial intelligence” part comes in because simple keyword searches do not work well when searching for specific slides; a slide’s purpose often differs from its text .

Also, machine learning could work well for a problem such as converting slide images into editable PowerPoint templates.

This is much trickier than it sounds for moderately complex slides, and a rules-based system is less efficient than using huge data sets for the image-to-slide translation.

This startup claims that its service can boost Analyst productivity by 30% and generate millions in extra fees for the average bank, and it plans to sell it to boutique banks for $2,000 per month.

They want a $2 million seed investment at a $20 million post-money valuation, meaning that we (the VCs) will own 10% if we invest.

So, should we do the deal?

What Do Venture Capitalists Look for in an Early-Stage Investment?

To answer this question, you need to think about what early-stage VCs look for in deals.

Most early-stage companies do not have revenue, but they do have markets and teams .

Since early-stage investing is so risky, VCs seek opportunities with the potential for very high cash-on-cash multiples , such as 10x in Series A rounds or 100x in Seed rounds.

To be clear, these are the targeted multiples.

Most startups fail, and even the ones that succeed do not come close to a 100x multiple in most cases.

Since this failure rate is so high, early-stage VCs need to aim high by finding companies with the potential to serve huge markets.

Here’s a summary of the different stages:

Since the asking valuation is $20 million, we can reframe this case study as:

“Could this company potentially reach 100x that valuation, or $2 billion? If not, what about something like 10 – 20x, for a $200 – $400 million valuation?”

You can answer this question by doing some quick math and qualitatively evaluating the market, product, and team.

Venture Capital Case Study, Part 1: The Numbers

In its slide deck, this company claims that there are ~4,000 boutique banks worldwide with 1 – 20 employees and that these banks alone can support a $100 million market size (since 4,000 * $2,000 / month * 12 months = $96 million).

They plan to target these smaller and mid-sized banks because they’re easier to reach and they have fewer resources for pitch book creation.

But this company makes a common mistake with this claim: it assumes it will capture 100% of this market.

That never happens in real life, even in a narrow niche like this one – because there are competitors and many firms that don’t need the product.

In large markets (tens or hundreds of billions of dollars), capturing even a tiny percentage might be a good result.

In a narrower market like this one, something like 10 – 20% might be plausible if the company executes well.

That means a more realistic revenue estimate is $10 – $20 million.

Startup / SaaS Valuation

Subscription software companies are usually valued based on a multiple of annual recurring revenue (ARR) , and this multiple is typically between 5x and 10x for public companies (more on SaaS accounting ):

If we apply these multiples to the company’s revenue estimates, we get a valuation range of $50 million (5x * $10 million) to $200 million (10x * $20 million).

This is a great result for the company, but it’s far below what most seed-stage VCs want.

A $50 million exit value would be a 2.5x multiple, while a $200 million exit value would be a 10.0x multiple.

And these numbers represent the potential outcomes and assume that everything goes well.

Also, these numbers do not account for the dilution in future funding rounds.

This 10% ownership will likely fall to 7%, 5%, or even 3% as the startup raises money in the Series A, B, and C rounds, which means even lower returns multiples.

You might say, “OK, but couldn’t this company’s revenue go much higher? They should charge per user , not per firm, for this service” (so the Average Revenue per User would be higher).

And that leads us to the next point about the qualitative evaluation of the market, product, and team.

Venture Capital Case Study, Part 2: The Market, Product, and Team

I wouldn’t say this company’s product is “terrible” – I’ve seen much worse startup ideas.

But it faces a “no man’s land problem” because the ideal customers differ from the reachable customers .

Boutique banks tend to be much more cost-conscious than large firms and don’t necessarily want to add a $2,000 monthly expense for multiple employees.

If a boutique bank needed this service for 5 Analysts, $2,000 per user per month would mean $120K per year , which is about the cost of hiring a full-time Analyst.

Many small banks would look at this and say, “OK, it speeds up presentations… but for that price, we could hire another Analyst and get client support, Excel work, and more.”

Also, small banks depend far less on long and detailed pitch books than large banks.

Most new deals come from longstanding relationships, not inbound inquiries or bake-offs / beauty pageants .

PitchBookGPT could target large banks ( the bulge brackets ) instead, as they are more willing to pay for training and productivity tools.

This service would be more useful for large firms because they tend to produce the 100+ slide pitch books where automation tools could save time.

However , it’s also much more difficult to close deals in this market, and compliance concerns mean these banks are less willing to share their data with external parties.

Could you imagine Goldman Sachs or Morgan Stanley uploading all their pitch books and slides to a VC-funded startup that may not even exist in a year?

Here’s my summary of the product/market fit problem:

Other Points in This Venture Capital Case Study

We don’t have time to analyze the team or the expected use of funds for this $2 million investment, but you would consider both in real life.

In short, they’re “fine but not amazing” – some of the budget numbers seem a bit too low (e.g., for the engineers), while others are on the high side (sales & marketing), but nothing seems completely crazy.

Similarly, the team (all fake names and bios) has relevant experience but looks a bit “junior,” so we’re neutral on them.

Our Final Decision

In short, we’d say no to this deal because we think a 100x multiple in any reasonable time frame – such as 5 or even 10 years – is implausible.

A 5 – 10x multiple might be feasible, but that’s not a great “stretch goal” for a seed-stage deal.

To reach a $1 – 2 billion valuation, the company would need hundreds of millions in annual revenue, and we don’t think that’s realistic for its business model and market.

The company could develop a different product or offer higher-end services to larger firms, but it doesn’t even have a “Version 1.0” yet, so that would be putting the cart before the horse.

You can view the full recommendation here .

What Would Change Our Mind?

If a few factors were different, we might be more inclined to recommend this deal:

• Per-Seat Pricing – Maybe they can’t charge $2,000 / user / month, but even something like $1,000 / user / month could increase potential revenue at many firms.
• Lower Asking Price – While a $2 million seed investment at a $20 million post-money valuation is not unheard of, it is aggressive. If the asking valuation were only $5 – 10 million, the deal math would be more feasible (maybe not for a 100x multiple, but something like 20 – 30x).
• Higher-End Product – For example, banks might be willing to pay more if this product could replace employees rather than just boost their productivity. But that would require far more capital to develop and might require technology that doesn’t exist.

The Venture Capital Case Study: Final Thoughts

In short, unlike many startups, this PitchBookGPT idea isn’t necessarily “bad.”

There are proven markets for productivity tools, slide templates, and reference models in both PowerPoint and Excel.

But the problem is that this isn’t a great early-stage VC idea – at least not for the deal terms the company wants.

That’s not great news for this fictional company, but it is reassuring if you’re a junior banker worried about getting replaced by AI anytime soon.

It probably won’t happen – and in the near term, these new tools might even improve your life.

If you liked this article, you might be interested in:

• The Growth Equity Case Study: Real-Life Example and Tutorial
• The Full Guide to Healthcare Private Equity, from Careers to Contradictions
• Healthcare Investment Banking: The Best Group to Check Into When Human Civilization is Collapsing?

About the Author

Brian DeChesare is the Founder of Mergers & Inquisitions and Breaking Into Wall Street . In his spare time, he enjoys lifting weights, running, traveling, obsessively watching TV shows, and defeating Sauron.

Free Exclusive Report: 57-page guide with the action plan you need to break into investment banking - how to tell your story, network, craft a winning resume, and dominate your interviews

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2 thoughts on “ The Venture Capital Case Study: What to Expect and How to Survive ”

This was a good read!

I noticed that you have a typo under the “slide dick”, right after the header of part 1 case study – or was that meant to be intentional ?

Thanks for pointing that out (fixed now). Nope, not intentional, somehow both spelling and grammar check missed it, and so did I (one issue when you stare at these documents all day…).

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Master Cap Tables and Startup Modeling

Learn VC and growth equity financial modeling via 5 short case studies and 4 extended case studies on everything from AI to SaaS to biotech.

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Analysts at Cornerstone Research start contributing to casework upon their arrival. Therefore, it is important that candidates have skills that translate into strategic thinking and quality work product. Not only will the case interview provide you with awareness of our work, it is another tool that provides us with insight into your thought process, comprehension skills, and your ability to articulate ideas.

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Top 10 FinTech Case Studies [A Detailed Exploration] [2024]

In the dynamic realm of financial technology—often abbreviated as FinTech—groundbreaking innovations have revolutionized how we interact with money, democratizing access to myriad financial services. No longer confined to traditional banking and financial institutions, today’s consumers can easily invest, transact, and manage their finances at their fingertips. Through a deep dive into the top five FinTech case studies, this article seeks to illuminate the transformative power of financial technology. From trailblazing start-ups to industry disruptors, we will unravel how these companies have reshaped the financial landscape, offering invaluable lessons for consumers and future FinTech leaders.

Top 10 FinTech case studies [A Detailed Exploration] [2024]

Case study 1: square – democratizing payment processing.

Launched in 2009 by Twitter co-founder Jack Dorsey, Square sought to fill a gaping hole in the financial services market—accessible payment processing for small businesses. In an industry overshadowed by high costs and complexity, Square introduced a game-changing point-of-sale (POS) system, using a tiny card reader that could be plugged into a smartphone.

Key Challenges

1. High Costs: The financial burden of traditional payment systems made it difficult for small businesses to participate, affecting their growth and market reach.

2. Complexity: Legacy systems were cumbersome, requiring hefty upfront investments in specialized hardware and software, with a steep learning curve for users.

3. Limited Accessibility: Many small businesses had to resort to cash-only operations, losing potential customers who preferred card payments.

Related: Important FinTech KPIs Explained

Strategies Implemented

1. User-Friendly Hardware: Square’s portable card reader was revolutionary. Easy to use and set up, it integrated seamlessly with smartphones.

2. Transparent Pricing: A flat-rate fee structure eliminates hidden costs, making budgeting more predictable for businesses.

3. Integrated Business Solutions: Square went beyond payment processing to offer additional services such as inventory management, analytics, and loans.

Results Achieved

1. Market Penetration: As of 2023, Square boasted over 4 million sellers using its platform, solidifying its market position.

2. Revenue Growth: Square achieved significant financial gains, reporting $4.68 billion in revenue in Q2 2021—a 143% year-over-year increase.

3. Product Diversification: Expanding its ecosystem, Square now offers an array of services from payroll to cryptocurrency trading through its Cash App.

Key Learnings

1. Simplicity is Key: Square’s user-centric design proved that simplifying complex processes can open new markets and encourage adoption.

2. Holistic Ecosystems: Offering integrated services can foster customer loyalty and increase lifetime value.

3. Transparency Builds Trust: A clear, straightforward fee structure can differentiate a FinTech solution in a market known for its opaqueness.

4. Accessibility: Providing easy-to-use and affordable services can empower smaller businesses, contributing to broader economic inclusion.

Related: Benefits of Green FinTech for Businesses

Case Study 2: Robinhood – Democratizing Investment

Founded in 2013, Robinhood burst onto the financial scene with a disruptive promise—commission-free trading. Unlike traditional brokerage firms that charged a fee for every trade, Robinhood allowed users to buy and sell stocks at no direct cost. The platform’s user-friendly interface and sleek design made it particularly appealing to millennials and Gen Z, demographics often underrepresented in the investment world.

1. High Commissions: Traditional brokerages often had fee structures that discouraged individuals, especially younger investors, from participating in the stock market.

2. Complex User Interfaces: Many existing trading platforms featured clunky, complicated interfaces that were intimidating for novice investors.

3. Limited Access: Entry-level investors often felt the investment landscape was an exclusive club beyond their financial and technical reach.

1. Commission-Free Trading: Robinhood’s flagship offering eliminated the financial barriers that commissions presented, inviting a new cohort of individual investors into the market.

2. User-Friendly Design: A sleek, intuitive interface made stock trading less intimidating, broadening the platform’s appeal.

3. Educational Resources: Robinhood provides educational content to help novice investors understand market dynamics, equipping them for more informed trading.

1. Market Disruption: Robinhood’s model has pressured traditional brokerage firms to rethink their fee structures, with several following suit by offering commission-free trades.

2. User Growth: As of 2023, Robinhood has amassed over 23.2 million users, a testament to its market penetration.

3. Public Scrutiny: Despite its success, Robinhood has not been without controversy, especially regarding its revenue model and lack of transparency. These issues have sparked widespread debate about ethical practices in fintech.

1. User-Centricity Drives Adoption: Robinhood’s easy-to-use platform illustrates that reducing friction encourages higher user engagement and diversifies the investor base.

2. Transparency is Crucial: The controversies surrounding Robinhood serve as a cautionary tale about the importance of transparent business practices in building and maintaining consumer trust.

3. Disruption Spurs Industry Change: Robinhood’s entry forced a reevaluation of longstanding industry norms, underscoring the influence a disruptive FinTech company can wield.

Related: How to Get an Internship in the FinTech Sector?

Case Study 3: Stripe – Simplifying Online Payments

Founded in 2010 by Irish entrepreneurs Patrick and John Collison, Stripe set out to solve a significant problem—simplifying online payments. During that time, businesses looking to accept payments online had to navigate a complex labyrinth of banking relationships, security protocols, and regulatory compliance. Stripe introduced a straightforward solution—APIs that allow businesses to handle online payments, subscriptions, and various other financial transactions with ease.

1. Complex Setup: Traditional online payment methods often require cumbersome integration and extensive documentation.

2. Security Concerns: Handling financial transactions online raised issues about data safety and compliance with financial regulations.

3. Limited Flexibility: Most pre-existing payment solutions were not adaptable to specific business needs, particularly for start-ups and SMEs.

1. Simple APIs: Stripe’s suite of APIs allowed businesses to integrate payment gateways effortlessly, removing barriers to entry for online commerce.

2. Enhanced Security: Stripe implemented robust security measures, including tokenization and SSL encryption, to protect transaction data.

3. Customization: Stripe’s modular design gave businesses the freedom to tailor the payment experience according to their specific needs.

1. Broad Adoption: Stripe’s intuitive and secure payment solutions have attracted a diverse client base, from start-ups to Fortune 500 companies.

2. Global Reach: As of 2023, Stripe operates in over 46 countries, testifying its global appeal and functionality.

3. Financial Milestone: Stripe’s valuation skyrocketed to $50 billion in 2023, making it one of the most valuable FinTech companies globally.

1. Ease of Use: Stripe’s success proves that a user-friendly, straightforward approach can go a long way in attracting a wide range of customers.

2. Security is Paramount: Handling financial data requires stringent security measures, and Stripe’s focus on secure transactions sets an industry standard.

3. Scalability and Flexibility: Providing a modular, customizable solution allows businesses to scale and adapt, increasing customer satisfaction and retention.

Related: FinTech Skills to Add in Your Resume

Case Study 4: Coinbase – Mainstreaming Cryptocurrency

Founded in 2012, Coinbase set out to make cryptocurrency trading as simple and accessible as using an email account. At the time, the world of cryptocurrency was a wild west of complicated interfaces, murky regulations, and high-risk investments. Coinbase aimed to change this by offering a straightforward, user-friendly platform to buy, sell, and manage digital currencies like Bitcoin, Ethereum, and many others.

1. User Complexity: Before Coinbase, cryptocurrency trading required high technical know-how, making it inaccessible to the average person.

2. Security Risks: The lack of centralized governance in the crypto world led to various security concerns, including hacking and fraud.

3. Regulatory Uncertainty: The absence of clear regulations concerning cryptocurrency created a hesitant environment for both users and investors.

1. User-Friendly Interface: Coinbase developed a sleek, easy-to-use platform with a beginner-friendly approach, which allowed users to start trading with just a few clicks.

2. Enhanced Security: The platform incorporated advanced security features such as two-factor authentication (2FA) and cold storage for digital assets to mitigate risks.

3. Educational Content: Coinbase offers guides, tutorials, and other educational resources to help demystify the complex world of cryptocurrency.

1. Mass Adoption: As of 2023, Coinbase had over 150 million verified users, contributing significantly to mainstreaming cryptocurrencies.

2. Initial Public Offering (IPO): Coinbase went public in April 2021 with a valuation of around $86 billion, highlighting its commercial success.

3. Regulatory Challenges: While Coinbase has succeeded in democratizing crypto trading, it continues to face scrutiny and regulatory hurdles, emphasizing the sector’s evolving nature.

1. Accessibility Drives Adoption: Coinbase’s user-friendly design has played a pivotal role in driving mass adoption of cryptocurrencies, illustrating the importance of making complex technologies accessible to everyday users.

2. Security is a Selling Point: In an ecosystem rife with security concerns, robust safety measures can set a platform apart and attract a broader user base.

3. Regulatory Adaptability: The ongoing regulatory challenges highlight the need for adaptability and proactive governance in the fast-evolving cryptocurrency market.

Related: Top FinTech Interview Questions and Answers

Case Study 5: Revolut – All-In-One Financial Platform

Founded in 2015, Revolut started as a foreign currency exchange service, primarily focusing on eliminating outrageous foreign exchange fees. With the broader vision of becoming a financial super-app, Revolut swiftly expanded its services to include digital banking, stock trading, cryptocurrency exchange, and other financial services. This rapid evolution aimed to provide users with an all-encompassing financial solution on a single platform.

1. Fragmented Services: Before Revolut, consumers had to use multiple platforms for various financial needs, leading to a fragmented user experience.

2. High Costs: Traditional financial services, particularly foreign exchange and cross-border payments, often have hefty fees.

3. Slow Adaptation: Conventional banking systems were slow to integrate new financial technologies, leaving a gap in the market for more agile solutions.

1. Unified Platform: Revolut combined various financial services into a single app, offering users a seamless experience and a one-stop solution for their financial needs.

2. Competitive Pricing: By leveraging FinTech efficiencies, Revolut offered competitive rates for services like currency exchange and stock trading.

3. Rapid Innovation: The platform continually rolled out new features, staying ahead of consumer demand and forcing traditional institutions to catch up.

1. User Growth: As of 2023, Revolut has amassed over 30 million retail customers, solidifying its reputation as a financial super-app.

2. Revenue Increase: In 2021, Revolut’s revenues climbed to approximately $765 million, indicating its business model’s viability.

3. Industry Influence: Revolut’s multi-functional capabilities have forced traditional financial institutions to reconsider their offerings, pushing the industry toward integrated, user-friendly solutions.

1. User-Centric Design: Revolut’s success stems from its focus on solving real-world consumer problems with an easy-to-use, integrated platform.

2. Agility Wins: In the fast-paced world of fintech, the ability to innovate and adapt quickly to market needs can be a significant differentiator.

3. Competitive Pricing is Crucial: Financial services have always been a cost-sensitive sector. Offering competitive pricing can draw users away from traditional platforms.

Related: Surprising FinTech Facts and Statistics

Case Study  6 : Chime – Revolutionizing Personal Banking

Essential term: digital banking.

Digital banking represents the digitization of all traditional banking activities, where financial services are delivered predominantly through the internet. This innovation caters to a growing demographic of tech-savvy users seeking efficient and accessible banking solutions.

Founded in 2013, Chime entered the financial market with a bold mission: to redefine personal banking through simplicity, transparency, and customer-centricity. At a time when traditional banks were mired in fee-heavy structures and complex service models, Chime introduced a revolutionary no-fee model complemented by a streamlined digital experience, challenging the status quo of personal banking.

1. Fee-Heavy Structure: Traditional banks heavily relied on various fees, including overdraft and maintenance charges, alienating a significant portion of potential customers, particularly those seeking straightforward banking solutions.

2. Complexity and Inaccessibility: Conventional banking systems were often marred by cumbersome procedures and lacked user-friendly interfaces, making them less appealing, especially to younger, more tech-savvy generations.

3. Customer Service: The traditional banking sector frequently struggled with providing proactive and responsive customer service, creating a gap in customer satisfaction and engagement.

1. No-Fee Model: By eliminating common banking fees such as overdraft fees, Chime positioned itself as a customer-friendly alternative, significantly attracting customers frustrated with traditional banking penalties.

2. User-Friendly App: Chime’s app was designed with user experience at its core, offering an intuitive and accessible platform for everyday banking operations, thereby enhancing overall customer experience.

3. Automatic Savings Tools: Chime innovated with features like automatic savings round-up and early paycheck access, designed to empower customers in their financial management.

1. Expansive Customer Base: Chime successfully captured a broad market segment, particularly resonating with millennials and Gen Z, evidenced by its rapid accumulation of millions of users.

2. Catalyst for Innovation: The company’s growth trajectory and model pressured traditional banks to reassess and innovate their fee structures and service offerings.

3. Valuation Surge: Reflecting its market impact and success, Chime’s valuation experienced a substantial increase, marking its significance in the banking sector.

1. Customer-Centric Approach: Chime’s journey underscores the importance of addressing customer pain points, such as fee structures, and offering a seamless digital banking experience, which can be instrumental in rapid user base growth.

2. Innovation in Features: The introduction of genuinely helpful financial management tools can significantly differentiate a FinTech company in a competitive market.

3. Disruptive Influence: Chime’s success story illustrates how a digital-first approach can disrupt and challenge traditional banking models, paving the way for new, innovative banking experiences.

Related: Is FinTech Overhyped?

Case Study  7 : LendingClub – Pioneering Peer-to-Peer Lending

Essential term: peer-to-peer (p2p) lending.

Peer-to-Peer (P2P) lending is a method of debt financing that enables individuals to borrow and lend money without using an official financial institution as an intermediary. This model directly connects borrowers and lenders through online platforms.

LendingClub, founded in 2006, emerged as a trailblazer in the lending industry by introducing a novel P2P lending model. This innovative approach offered a substantial departure from the traditional credit system, typically dominated by banks and credit unions, aiming to democratize access to credit.

1. High-Interest Rates: Traditional loans were often synonymous with high-interest rates, rendering them inaccessible or financially burdensome for many borrowers.

2. Limited Access to Credit: Conventional lending mechanisms frequently sidelined individuals with lower credit scores, creating a significant barrier to credit access.

3. Intermediary Costs: The traditional lending process involves numerous intermediaries, leading to additional costs and inefficiencies for borrowers and lenders.

1. Direct Platform: LendingClub’s platform revolutionized lending by directly connecting borrowers with investors, reducing the overall cost of obtaining loans.

2. Risk Assessment Tools: The company employed advanced algorithms for assessing the risk profiles of borrowers, which broadened the spectrum of loan accessibility to include individuals with diverse credit histories.

3. Streamlined Process: LendingClub’s online platform streamlined the loan application and disbursement processes, enhancing transparency and efficiency.

1. Expanded Credit Access: LendingClub significantly widened the avenue for credit, particularly benefiting those with less-than-perfect credit scores.

2. Influencing the Market: The P2P lending model introduced by LendingClub prompted traditional lenders to reconsider their rates and processes in favor of more streamlined, borrower-friendly approaches.

3. Navigating Regulatory Hurdles: The journey of LendingClub highlighted the intricate regulatory challenges of financial innovation, underscoring the importance of adaptive compliance strategies.

1. Efficiency of Direct Connections: Eliminating intermediaries in the lending process can lead to substantial cost reductions and process efficiency improvements.

2. Broadening Credit Accessibility: FinTech can play a pivotal role in democratizing access to financial services by implementing innovative risk assessment methodologies.

3. Importance of Regulatory Compliance: Sustainable innovation in the FinTech sector necessitates a keen awareness and adaptability to the evolving regulatory landscape.

Related: Who is a FinTech CTO?

Case Study  8 : Brex – Reinventing Business Credit for Startups

Essential term: corporate credit cards.

Corporate credit cards are specialized financial tools designed for business use. They offer features like higher credit limits, rewards tailored to business spending, and, often, additional tools for expense management.

Launched in 2017, Brex emerged with a bold vision to transform how startups access and manage credit. In a financial landscape where traditional corporate credit cards posed steep requirements and were often misaligned with the unique needs of burgeoning startups, Brex introduced an innovative solution. Their model focused on the company’s cash balance and spending patterns rather than relying on personal credit histories.

1. Inaccessibility for Startups: Traditional credit systems, with their reliance on extensive credit history, were largely inaccessible to new startups, which typically lacked this background.

2. Rigid Structures: Conventional corporate credit cards were not designed to accommodate rapidly evolving startups’ fluid and dynamic financial needs.

3. Personal Guarantee Requirement: A common stipulation in business credit involves personal guarantees, posing a significant risk for startup founders.

1. No Personal Guarantee: Brex innovated by offering credit cards without needing a personal guarantee, basing creditworthiness on business metrics.

2. Tailored Financial Solutions: Understanding the unique ecosystem of startups, Brex designed its services to be flexible and in tune with their evolving needs.

3. Technology-Driven Approach: Utilizing advanced algorithms and data analytics, Brex could assess the creditworthiness of startups in a more nuanced and comprehensive manner.

1. Breaking Barriers: Brex made corporate credit more accessible to startups, removing traditional barriers.

2. Market Disruption: By tailoring its product, Brex pressures traditional financial institutions to innovate and rethink its credit card offerings.

3. Rapid Growth: Brex’s unique approach led to rapid adoption within the startup community, significantly growing its customer base and market presence.

1. Adapting to Market Needs: Brex’s success underscores the importance of understanding and adapting to the specific needs of your target market.

2. Innovative Credit Assessment: Leveraging technology for credit assessment can open new avenues and democratize access to financial products.

3 Risk and Reward: The move to eliminate personal guarantees, while riskier, positioned Brex as a game-changer, highlighting the balance between risk and innovation in FinTech.

Related: Is FinTech a Dying Career Industry?

Case Study  9 : SoFi – Transforming Personal Finance

Essential term: financial services platform.

A financial services platform offers a range of financial products and services, such as loans, investment options, and banking services, through a unified digital interface.

SoFi, short for Social Finance, Inc., was founded in 2011 to revolutionize personal finance. Initially focused on student loan refinancing, SoFi quickly expanded its offerings to include a broad spectrum of financial services, including personal loans, mortgages, insurance, investment products, and a cash management account. This expansion was driven by a vision to provide a one-stop financial solution for consumers, particularly catering to the needs of early-career professionals.

1. Fragmented Financial Services: Consumers often had to navigate multiple platforms and institutions to manage their various financial needs, leading to a disjointed financial experience.

2. Student Loan Debt: Many graduates needed more flexible and affordable refinancing options with student debt escalating.

3. Accessibility and Education: A significant segment of the population lacked access to comprehensive financial services and the knowledge to navigate them effectively.

1. Diverse Financial Products: SoFi expanded its product range beyond student loan refinancing to include a suite of financial services, offering more holistic financial solutions.

2. Tech-Driven Approach: Utilizing technology, SoFi provided streamlined, user-friendly experiences across its platform, simplifying the process of managing personal finances.

3. Financial Education and Advice: SoFi offered educational resources and personalized financial advice, positioning itself as a partner in its customers’ financial journey.

1. Expanding Consumer Base: SoFi succeeded in attracting a broad customer base, especially among young professionals looking for integrated financial services.

2. Innovation in Personal Finance: The company’s expansion into various financial services positioned it as a leader in innovative personal finance solutions.

3. Brand Recognition and Trust: With its comprehensive approach and focus on customer education, SoFi built a strong brand reputation and trust among its users.

1. Integrated Services Appeal: Offering a broad array of financial services through a single platform can attract customers seeking a unified financial management experience.

2. Leveraging Technology for Ease: Using technology to simplify and streamline financial services is key to enhancing customer experience and satisfaction.

3. Empowering Through Education: Providing users with financial education and advice can foster long-term customer relationships and trust.

Related: FinTech vs Investment Banking

Case Study  10 : Apple Pay – Redefining Digital Payments

Essential term: mobile payment system.

A mobile payment system allows consumers to make payments for goods and services using mobile devices, typically through apps or integrated digital wallets.

Launched in 2014, Apple Pay marked Apple Inc.’s foray into the digital payment landscape. It was introduced with the aim of transforming how consumers perform transactions, focusing on enhancing the convenience, security, and speed of payments. Apple Pay allows users to make payments using their Apple devices, employing Near Field Communication (NFC) technology. This move was a strategic step in leveraging the widespread use of smartphones for financial transactions.

1. Security Concerns: The rising incidences of data breaches and fraud in digital payments made consumers skeptical about the security of mobile payment systems.

2. User Adoption: Convincing consumers to shift from traditional payment methods like cash and cards to a digital platform requires overcoming ingrained habits and perceptions.

3. Merchant Acceptance: For widespread adoption, a large number of merchants needed to accept and support Apple Pay.

1. Enhanced Security Features: Apple Pay uses a combination of device-specific numbers and unique transaction codes, ensuring that card numbers are not stored on devices or servers, thereby enhancing transaction security.

2. Seamless Integration: Apple Pay was designed to work seamlessly with existing Apple devices, offering an intuitive and convenient user experience.

3. Extensive Partnership with Banks and Retailers: Apple forged partnerships with numerous banks, credit card companies, and retailers to ensure widespread acceptance of Apple Pay.

1. Widespread Adoption: Apple Pay quickly gained a significant user base, with millions of transactions processed shortly after its launch.

2. Market Leadership: Apple Pay became one of the leading mobile payment solutions globally, setting a standard in the digital payment industry.

3. Influence on Payment Behaviors: The introduction of Apple Pay substantially accelerated the shift towards contactless payments and mobile wallets.

1. Trust Through Security: The emphasis on security can be a major driving force in user adoption of new financial technologies.

2. Integration and Convenience: A system that integrates seamlessly with users’ daily lives and provides tangible convenience can successfully change long-standing consumer habits.

3. Strategic Partnerships: Building a network of partnerships is key to the widespread acceptance and success of a new payment system.

These stories of globally renowned FinTech trailblazers offer invaluable insights, providing a must-read blueprint for anyone looking to make their mark in this rapidly evolving industry.

1. Square shows that focusing on user needs, especially in underserved markets, can drive innovation and market share.

2. Robinhood serves as both an inspiration and a cautionary tale, advocating for democratization while emphasizing the importance of ethical practices.

3. Stripe proves that simplifying complex processes through customizable, user-friendly solutions can redefine industries.

4. Coinbase highlights the transformative potential of making new financial instruments like cryptocurrency accessible while reminding us of regulatory challenges.

5. Revolut sets the bar high with its user-centric, all-in-one platform, emphasizing the need for agility and competitive pricing in the sector.

The key to FinTech success lies in simplicity, agility, user focus, and ethical considerations. These case studies serve as guiding lights for future innovation, emphasizing that technological superiority must be balanced with customer needs and ethical responsibilities.

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4 Ways a Settlement Could Change the Housing Industry

The influential National Association of Realtors agreed to make several changes to its policies to settle class-action lawsuits brought by home sellers who say they were forced to pay inflated commissions to real estate agents.

By Debra Kamin

In the early hours of Friday morning, the National Association of Realtors agreed to a global settlement deal that would resolve several lawsuits against the trade group.

A group of Missouri home sellers sued N.A.R. over their policies on agent compensation, arguing that a N.A.R. rule requiring home sellers to pay commissions to their agents and the agents of their buyers led to inflated fees and price fixing. The lawsuit also called into a question another rule requiring agents to list homes on N.A.R.-affiliated databases in order to sell them. In October, a jury agreed that both practices were anticompetitive, and a judge ordered damages of at least $1.8 billion.

More than a dozen copycat cases, all accusing N.A.R. of stifling competition and violating antitrust laws, have followed.

With the settlement agreement, N.A.R. will pay $418 million in damages , but more important, it has agreed to rewrite a number of rules that have long been central to the U.S. housing industry. Here’s how things stand to change, pending court approval.

Home prices will drop.

In the United States, most agents specify a commission of 5 or 6 percent, paid by the seller. That means that someone with a $1 million home should expect to spend up to $60,000 on real estate commissions alone, with $30,000 going to his agent and $30,000 going to the agent who brings a buyer. Even for a home that costs $400,000 — close to the current median for homes across the United States — sellers are still paying around $24,000 in commissions, a cost that is baked into the final sales price of the home.

With the settlement agreement, sellers’ agents will no longer be required to make offers of commission to buyers’ agents, a practice called decoupling. This will save homeowners billions.

“Decoupling will allow commissions to be removed and negotiated down, lowering both housing prices and overall consumer costs,” said Steve Brobeck, the retired executive director of the Consumer Federation of America. Mr. Brobeck said that Americans spend about $100 billion a year in real estate commissions, and with the settlement, that number is expected to dip by at least $20 billion and up to $50 billion.

Since commissions are tacked onto the price of a home, “Over time, both sellers and buyers will force rates down through negotiation and comparison shopping in a more price-transparent marketplace,” he said.

The 6 percent commission will cease to be the norm.

The lawsuits argued that N.A.R., and brokerages that required their agents to be members of N.A.R., had set rules that led to an industrywide standard commission of 5 or 6 percent — one of the highest rates in the world. Without that guaranteed rate, agents will now most likely be forced to lower their commissions to compete for business.

“U.S. commissions are unlikely to decline to the 1 or 2 percent rate level in England, where only one agent and an attorney are usually involved in a home sale. But they certainly will decline substantially, and commissions will also increasingly reflect the competence and efforts of agents on sales,” Mr. Brobeck said in an email.

Steering — the practice of agents directing buyers to more expensive houses — will be less common.

Most of the databases where homes are listed for sale in the United States are restricted to dues-paying members who belong to N.A.R., a dominance that has led to antitrust allegations against N.A.R.

One N.A.R. rule demands that a listing agent, when posting a home on the database, clearly state the amount of compensation that a buying agent will receive should they bring a buyer. This is a practice that critics say has long led to “steering,” in which buyers’ agents direct their clients to pricier homes in a bid to collect a bigger commission check.

Under the settlement, any fields displaying broker compensation will be eliminated entirely, which will help damper the practice.

About one million real estate agents could leave the profession.

The number of real estate agents swelled during the pandemic, when mortgage rates plummeted and the housing market boomed. In 2020 and 2021, more than 156,000 people got their real estate licenses, and membership in the National Association of Realtors hit a peak of 1.6 million members in 2022.

A lot of that growth was predicated on the idea of easy money.

But now a lot of those agents are struggling, and a reduction in commission rates will only increase the pain. Half of the agents in the country sold one house — or no house s at all — last year. With the industry now staring down a massive overhaul, veteran agents predict their less experienced peers will leave the field all together.

Some analysts predict a mass departure. One widely cited report from investment banking firm Keefe, Bruyette & Woods projects 1 million agents leaving the field as shared commissions vanish.

“Veteran agents have built strong relationships, established reputations and extensive networks. Newer real estate agents may struggle,” said Jen McDonald, who leads LPT Realty in Reno, Nev., and has spent 24 years in the industry. “Without established reputations or strong clients bases, they are going to find it challenging to retain clients or attract new ones.”

Debra Kamin reports on real estate, covering what it means to buy, sell and own a home in America today. More about Debra Kamin