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*Precise Math*
In many parts of a case interview, precise math is required. This
commonly occurs when calculating optimal price points, changes in volume
shipments, gross margin %, shifts in revenue mix from one segment to
another, break-even price points, and others.
It is VERY important to achieve 100% accuracy in these precise math type
questions that are typically embedded within a case interview (and
sometimes tested separately in an actual math exam).
No calculator or paper/pen is permitted. You must do all calculations in
your head.
*A passing grade is 100% accuracy.*
A failing grade is any score less than 100% accurate.
In addition, it is important that you are able to be this accurate
while under the pressure of a real-life interview. To simulate this
stress, these practice tests are TIMED.
On your scoreboard, you will see your scores vs. other benchmark.
These benchmarks include other people who have take the same test, the
top 20% of those who have taken the test, and my (Victor Cheng's) personal
typical score.
With the exception of an explicit math test given by an employer, in
real life it is okay to slow down the pace (compared to the benchmarks
established here) to double check your math.
We use an aggressive timeframe in practice to simulate STRESS (which
tends to cause people to make mistakes). So if you can get used the
stress of the clock, it is easier to do math with the stress of an
interviewer looking at you.
*Estimation Math*
There are also times during a case where estimation math is the
preferred level of accuracy. An acceptable estimate is one where the
answer you give is within +/- 20% of the actual answer.
In many cases, this level of precision is "good enough".
This typically occurs when you are explicitly given an "estimation"
problem during a case. Typically this is phrased along these lines,
"Estimate the # of tires sold in this country last year".
Other times you will find a math computation that is just too difficult
to solve mentally. And the expectation is to keep the flow of the
conversation going, just estimate the correct answer to see if it
changes the business decision being considered.
For example, if we know that a profit margin more than 20% is considered
attractive, and under 20% is unattractive, then for a given project it
doesn't make much difference if the estimated profit margin is 30% -
40%... because both ends of the range are considered attractive.
For practice purposes, the goal in tackling estimation math question is
to achieve a rating of 100% of responses being "acceptable".
An acceptable response is one where your estimated answer is within +/-
20% of the precise answer.
Note the questions provided in the estimation test are significantly
more difficult than for precise math.
No calculator or paper/pen is permitted. You must do all calculations in
your head.
Good luck!
