Estimations Flashcards
1
Q
Why is estimations an important part of the consulting job?
A
E.g. test a financial model, or get a first understanding of a specific market or industry
2
Q
Estimations: the 5-step approach
A
- Clarify scope
- Structure problem
- Choose assumptions
- Calculate
- Check answer
3
Q
Clarify scope
A
- Ask any scope related questions you may have
- E.g. $ per year or customers per year
- Beware of grey areas in the scope
- E.g. what’s included in the market or not (for example B2B vs B2C or what products are included in the scope)
4
Q
Structure problem
A
- Show your plan to get to your answer
- Have your interviewer understand the full logic of what you are going to do before start estimating
- Use top-down structure to make sure that you’re not leaving anything out and that the interviewer understands your ideas easily
- Explicitly state the algebra in your structure
5
Q
Choose assumptions
A
- Use data and logic to back up your assumptions
- Focus on what matters
- Get creative
- It’s OK to ask
6
Q
Calculate
A
- Calculations must be precise and efficient
- Always reality check before you start calculating
7
Q
Check answer
A
- Compare your value to something to get an idea of wether it makes sense or not
- You can get creative with your number
- If you can’t find a way, say what you would like to do
- If you have to adjust your value, go for variables that can change more
- Don’t just check your math