Consulting · figures from each school’s own report
Case interview examples, solved with every number shown
Three practice cases written for this site, each with its assumptions stated, its arithmetic shown and a recommendation at the end.
Units needed to break even
80,000
| Contribution per unit | $25 |
| Fixed costs | $2,000,000 |
| Break-even revenue | $3.2 million |
State each assumption out loud, round to friendly numbers, then sanity-check the result against something you know. How this is calculated.
Built by Radif Partners · figures checked · Method · Editorial policy
These three case interview examples cover the shapes that come back most often after the profit case: a break-even, a market entry and an acquisition. Every figure is an assumption of the exercise, the kind an interviewer hands you, and is stated as such. A fitness club with $0.9 million of fixed costs and a $50 monthly fee breaks even at 1,875 members, 37.5% below its capacity of 3,000. An electric scooter service entering a city of 1,500,000 adults faces a market of $15.1 million a year; with a quarter of it, the fleet of $2.0 million is paid back in 1.4 years. A bakery chain priced at $30.0 million is worth $25.0 million on its own profit and $35.0 million with the synergies, so the deal makes sense only if the synergies are real. Each case ends with the sentence a candidate would say to close it. The calculator on this page runs the break-even with your own numbers.
Case 1: does the new fitness club cover its costs?
Assumptions of the exercise: the client plans a fitness club with fixed costs of $0.9 million a year (rent, staff, equipment), a membership fee of $50 a month, a variable cost of $120 per member per year (towels, cleaning, card fees) and room for 3,000 members. The question: how many members does it need to break even, and is that realistic?
Step 1. Yearly revenue per member: $50 times 12 is $600.
Step 2. Margin per member: $600 minus $120 is $480.
Step 3. Break-even: $0.9 million divided by $480 gives 1,875 members.
Step 4. Sanity check: that is 62.5% of capacity, so the club has a safety margin of 37.5%. Full, it would earn $0.5 million a year.
Close. "The club breaks even at about 1,875 members, 62.5% of capacity. I would go ahead if the local market supports that many members within the first year; the next step is to check the number of people living within a short drive and the clubs already there."
Interviewers often follow up with a change: the rent rises, the fee falls, a competitor opens. Rerun the division with the new number; the calculator at the top does it for you.
Case 2: should a scooter service enter a new city?
Assumptions of the exercise: the city has 1,500,000 adults; 4% of them would use rented scooters, 6 rides a month each, at $3.50 a ride. The client expects to win 25% of rides, each costs it $2.20 in charging, repairs and staff, and the fleet costs $2.0 million.
Step 1, size the market. 1,500,000 adults times 4% is 60,000 users; times 6 rides times 12 months is 4,320,000 rides a year; at $3.50, $15.1 million.
Step 2, the client's share. 25% of rides is 1,080,000 rides and $3.8 million of revenue.
Step 3, profit. Each ride earns $1.30 after its cost, so $1.4 million a year before overheads.
Step 4, payback. $2.0 million divided by $1.4 million is 1.4 years.
Close. "On these assumptions the city repays the fleet in about 1.4 years. The answer is most sensitive to the share of adults who ride; before entering, I would check usage in a comparable city and the city's permit rules, which can cap the fleet."
Market sizing in four steps
Market per year
$3.1 billion
| Buyers | 26,000,000 |
| Purchases | 104,000,000 |
Case 3: should the client buy a bakery chain?
Assumptions of the exercise: a food group can buy a bakery chain for $30.0 million. The chain earns $2.5 million a year and is not growing; combining purchasing and delivery would save $1.0 million a year. The group requires a 10% return.
Step 1, value alone. A steady profit valued as a perpetuity is the profit divided by the return: $2.5 million divided by 10% is $25.0 million, less than the price.
Step 2, value with synergies. $3.5 million a year divided by 10% is $35.0 million, more than the price.
Step 3, payback. The price divided by the combined yearly profit is 8.6 years.
Close. "The chain is worth $25.0 million on its own, so at $30.0 million we would be paying for synergies. With the $1.0 million of savings, the deal is worth $35.0 million. I would recommend it only after checking those savings line by line, and I would offer less than the asking price."
How to use these cases
Read the question, close the page and solve it aloud before reading the steps. Then change one assumption and solve again: interviewers rarely stop at the first answer. The profit tree, the most common shape, is solved on the case interview page, and estimation drills are on market sizing questions. At schools where consulting takes a large share of the class, 37.3% at UVA Darden, students run these drills in pairs through the first months of the program; the consulting rubric explains when the interviews come.