Practice · Profitability
Profitability questions
Profitability questions are the backbone of consulting case math. They test your ability to decompose profit into its components — revenue (price × volume), COGS, operating expenses — and reason about how changes to one driver affect the whole.
Why interviewers test this
Profitability is the most common case type at McKinsey, BCG, and Bain. The math usually isn’t the hard part — the challenge is structuring the decomposition cleanly and identifying which lever matters most. Interviewers want to see that you can move between the big picture and the specific numbers.
Worked examples
Revenue is €500M, COGS is 55%, OpEx is 20%. What is operating profit?
Profit = Revenue × (1 - COGS% - OpEx%) = 500 × (1 - 0.55 - 0.20) = 500 × 0.25 = €125M.
Price drops 5%, volume rises 8%. What is the net revenue change?
Net change = (1 - 0.05) × (1 + 0.08) - 1 = 0.95 × 1.08 - 1 = 1.026 - 1 = +2.6%. Not +3% — the effects compound.
Strategies
Revenue = Price × Volume. Always decompose revenue into these two drivers before analyzing changes.
For small simultaneous changes, the effects approximately add: Price +5%, Volume -3% ≈ Revenue +2%. Use multiplication for precision.
Margin waterfall: Revenue → Gross Profit (after COGS) → Operating Profit (after OpEx) → Net Profit (after tax/interest). Know which level the question is asking about.
When comparing scenarios, calculate each separately and compare absolute profit, not just percentage changes.
Difficulty 1-5. Easy: simple margin calculation. Hard: multi-lever scenario with simultaneous price, volume, and cost changes.
Practice profitability under pressure
CaseBlitz generates unique profitability questions every session, with per-question timers calibrated to interview difficulty. Start with a free diagnostic.
Start your diagnostic