In these case studies, we'll take a look at employee performance and retention, supply chain management, growth, ad spending, and more.
Break-Even Analysis is often applied when deciding whether to develop a new product or make a capital equipment investment, as well as helping in making decisions around how to price products and service and the number of units to produce. Note that the expression Revenue per unit — Variable Expenses per unit is often referred to as the Unit Contribution Margin.
An understanding of how to analyze Expenses and differentiate Fixed Expenses from Variable Expenses is useful in order to run a Break-Even Analysis of a company. Break-Even Analysis can get more complex, as there are microeconomic and macroeconomic considerations that can change both the Fixed and Variable Expenses, but the basic concept is an important one; therefore you will likely come across some form of Break-Even Analysis in Consulting Case Study interviews.
Note that this concept can also be translated into a question on Break-Even Price, i.
Variable Expenses Fixed Expenses or Fixed Costs are expenses that do typically fluctuate regardless of the production or sales levels. Variable Expenses or Variable Costs are impacted by changes in production or sales levels — typical examples include are Raw Materials, Direct Labor Expenses wages and benefitsand delivery costs.
Variable Cost structure is important in a variety of cases such as in Break-Even Analysis, discussed above. When analyzing a Case, always keep in mind that total Fixed Expenses remain constant as volume rises or fallsbut Fixed Expenses per unit decline as volume rises rise as volume falls.
Variable Expenses, meanwhile, rise proportionately as volume increases, so Variable Expenses per unit remain constant. Profit Margin or Net Income Marginhe or she will usually be referring to the total Net Income of a company or business line as a percentage of its Revenue: The interviewer could also refer to Gross Profit Margin, which is simply Gross Profit as a percentage of revenue: In both cases, thus is simply the figure in question Operating Profit, a.
ROI is used in consulting interviews as a way to evaluate the return of a particular investment or to assess the feasibility of a potential investment or acquisition. Many companies have an internal ROI metric for capital investments. Standard ROI is calculated as follows: Note that this is not the only growth path to grow from a beginning number to an ending number, but it is the only growth path that is the same growth rate every year.
The formula to calculate CAGR is: CAGR is very similar in concept to Internal Rate of Return IRRwhich is the annual rate of return on an investment if its value grows by a specific multiple over a specific amount of time. The rule of 72 simply states that a quantity will roughly double in value whenever the number of years times the annual growth rate equals The idea behind this microeconomic analysis is to determine the reasonable cost to win or acquire a customer or to maintain an existing customer, i.
It can also be used to determine level and type of customer service to provide, and as another way to estimate the value of a business. The steps to calculate the LCV are as follows: Estimate the remaining customer years; in other words, how long is a typical customer expected to last with the company?
It is often used by companies to project their own anticipated Revenue figures. It is also worth knowing the four steps in the Product Life Cycle Curve, as the concept could come up in a hypothetical product case.Dec 27, · How to Do a Case Study. In this Article: Article Summary Planning an Academic Case Study Conducting Academic Case Study Research Writing a Marketing Case Study Community Q&A Many fields require their own form of case study, but they are most widely used in academic and business contexts.
Peter shows how he got his powerwashing business to $13,/month with these flyers he created and posted on doors in neighborhoods (and failed fliers too). Guidelines for Writing a Case Study Analysis. A case study analysis requires you to investigate a business problem, examine the alternative solutions, and propose the most effective solution using supporting evidence.
How to Write a Business Case Study 1. Determine the case study's objective and format. All business case studies are designed to demonstrate the value of your services, but they can focus on several different client objectives and take a few different forms. A business case study research is a complex training based on the conditions of real-life economic, social and business situations.
A supervisor offers a task to a team, which implies finding solutions for the optimization of the enterprise on the concrete terms of a real-life financial and industrial situation. Sep 18, · A business case provides justification for a proposed business change or plan, and typically outlines the allocation of capital and resources required to 92%(49).