Practice · Sensitivity Analysis
Sensitivity analysis questions
Sensitivity questions ask: ‘what happens if this assumption changes?’ They test your ability to isolate the impact of one variable on an outcome — the skill that separates candidates who recite frameworks from those who can actually advise a client.
Why interviewers test this
Real consulting work is full of uncertainty. A partner will ask ‘what if volume is 10% lower than we assumed?’ and expect you to calculate the impact in real time. Sensitivity analysis is where case math meets business judgment.
Worked examples
Revenue €200M, costs €160M. Revenue drops 15%. By what % must costs fall to maintain the same profit?
Current profit = €40M. New revenue = €170M. Target costs = 170 - 40 = €130M. Cost reduction = (160 - 130) / 160 = 18.75%.
Revenue €100M. Volume drops 10%, price rises 5%. New revenue?
100 × 0.90 × 1.05 = €94.5M. Change one variable at a time: first volume (€90M), then price (€94.5M).
Strategies
Change one variable at a time. Apply the second change to the new base, not the original.
For ‘maintain the same profit’ questions: calculate current profit first, then solve for the variable that produces the same profit under new conditions.
Threshold analysis: ‘how much can X change before we lose money?’ = current profit / revenue exposed to X.
When comparing two levers, calculate the absolute profit impact of each separately. Percentages can be misleading.
Difficulty 2-5. Easy: single-variable impact. Hard: multi-variable scenario comparison with threshold identification.
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