Three years Quote by Victor Cheng
““Candidate: This is a pretty broad problem, so I’d like to start with an arbitrary hypothesis. Because the client wants both sales and profits to increase, let’s hypothesize that the client has a sales growth problem. To test that hypothesis, I’d like to break down the client’s profits into its component parts: sales and costs. Specifically, I’d like to understand how each has changed in the past three years, because we know that’s the duration in which sales and profits have remained flat.””
About This Quote
Source Interview: Consulting case interview, Victor Cheng, 2015
The speaker proposes a hypothesis that the client’s stagnant profits stem from sales growth issues, suggesting analysis of sales and cost trends over three years to diagnose the problem.
In simple terms: Suggest sales may be the cause of flat profits, so examine sales and costs over three years.
Key Takeaway
Analyze sales and cost trends to identify growth issues.
Themes
consulting
analysis
problem solving
Mood
analytical
inquisitive
Type
strategic
diagnostic
When to use this quote
- business review
- profit analysis
- sales strategy
- cost management
Key Concepts
hypothesis testing
financial diagnostics
Questions to Reflect On
- What other factors could be affecting profits?
- How can cost structure be evaluated alongside sales?
A Different Perspective
Assumes sales are the primary issue without considering market or operational factors.
