Market Sizing
If a popular campus coffee shop sells 500 drinks a day at an average price of $5 per drink, what is their total revenue in a 30-day month?
$75,000
(500 × $5 = $2,500/day; $2,500 × 30 days = $75,000)
You sell custom t-shirts for $25 each. It costs you $10 to make each shirt. What is your profit on each shirt sold?
$15
($25 - $10)
A local boutique's total sales went up 20% this month, but their total profit went down. What is the most likely reason?
Their costs/expenses increased faster than their sales (or they discounted heavily to drive sales).
Which financial statement tells a consultant how much money a business brought in, spent, and kept as profit over a specific period?
The Income Statement
What is the rough population of the United States that consultants use for quick estimates: 30 million, 330 million, or 1 billion?
~330 million
A student bakery has $1,000 in monthly kitchen rent (fixed cost). If each box of cookies sells for $4 and costs $2 in ingredients to make, how many boxes must they sell to break even?
500 boxes
($1,000 rent / $2 profit per box)
In consulting, you structure problems into categories that don't overlap. Which of these two buckets overlaps and is NOT clean:
Option A: In-store sales vs. Online sales
Option B: Food sales vs. Breakfast sales
Option B (Breakfast already includes food sales).
Which financial statement acts like a snapshot showing what a company owns (assets) versus what it owes (liabilities)?
The Balance Sheet.
If a local gym has 1,000 members who each pay $100 per month, how much revenue does the gym make in one year?
$1,200,000 (or $1.2M)
($100,000/month × 12 months)
A food truck generates $100,000 in sales and incurs $70,000 in total costs. What is their profit margin percentage?
30%
($30,000 profit / $100,000 sales = 30%)
A smoothie shop wants to cut costs. Between monthly store rent and strawberries/fruit, which one is a Fixed Cost and which is a Variable Cost?
Rent is Fixed; Strawberries/Fruit is Variable.
If a client asks a consultant, "Can our company afford to expand into a second store next month?", which statement will show if they have the actual liquid cash on hand?
The Cash Flow Statement.
To estimate how many pizzas are ordered on a Friday night in a college town, what are two basic factors or assumptions you would need to estimate?
Any two reasonable drivers: (e.g., Number of students/residents, percentage ordering pizza, or average number of people sharing a pizza)
A company wants to increase revenue. Name the two basic levers in the formula: Revenue = ___ × ___.
Price × Quantity (or Units Sold)
A ride-share company wants to attract more drivers during peak rainstorms. What pricing strategy do they use to balance supply and demand?
Surge pricing (or dynamic pricing).
An accountant records that a business has $500,000 in Accounts Receivable. If that number keeps growing every month while cash drops, what operational problem is the business facing?
Customers aren't paying their bills on time (poor collections/invoicing).
If an airline has a 200-seat plane that is 80% full, and tickets cost an average of $250 each, what is the ticket revenue for that single flight?
$40,000
(200 seats × 80% = 160 passengers; 160 × $250 = $40,000)
A store offers a "Buy One, Get One 50% Off" sale on $40 jackets. If a customer buys two jackets, what is the average discount percentage they received?
25% off
(First jacket = $40, second = $20; total paid = $60 on an $80 regular value, saving $20 / $80 = 25%)
When presenting to a busy corporate executive or client, should you give your main recommendation at the very beginning of the presentation or save it for the final slide?
At the very beginning (Bottom-Line Up Front / Executive Summary).
If a company has positive Net Income on its Income Statement, it is impossible for them to run out of cash and go bankrupt that same year.
False (A company can be profitable on paper but run out of cash if receivables aren't collected or too much cash is tied up in inventory/debt payments).