Interviewer view · keep this screen to yourself

Profitable, but short of cash

You run the case. Read the prompt, answer questions from the notes below, and share data only when the candidate asks for it or gets stuck. Score at the end.

Case timer

00:00

Target length:

1. Read the prompt aloud

Read it slowly, then pause. Let the candidate ask questions before they structure.

A distributor in Mumbai made a net profit of INR 60 lakh this year, with depreciation of INR 20 lakh. Its customers now pay much later: receivables rose from INR 100 lakh to INR 300 lakh. It also holds more stock: inventory rose from INR 50 lakh to INR 120 lakh. What happened to its cash from operations?

2. Answers to clarifying questions

This case has no scripted clarifying answers. Answer from the prompt, and say "assume what you think is reasonable" if the prompt does not cover it.

3. A model structure

Compare the candidate's structure with this one. A different split can be just as good if it is clean and fits the problem.

Cash from operations = profit + depreciation - increase in receivables - increase in inventory + increase in payables
- Add back depreciation: a cost, but no cash left the business
- Subtract money now waiting in receivables and stock
- Add any increase in payables (here payables did not change)

4. The working, step by step

Each step shows how a strong candidate works it out. Share a new fact from it only when the candidate asks or is stuck, and let them do the math: the result in the dark box is what they should reach.

Step 1: Increase in receivables
What a strong candidate does: From 100 to 300.
Increase in receivables (INR lakh): 300 - 100 = 200
Step 2: Increase in inventory
What a strong candidate does: From 50 to 120.
Increase in inventory (INR lakh): 120 - 50 = 70
Step 3: Cash from operations
What a strong candidate does: Profit plus depreciation, minus both increases.
Cash from operations (INR lakh): 60 + 20 - 200 - 70 = -190

The recommendation to listen for

At the end, say: "The CEO walks in. What is your recommendation?"

Cash from operations was minus INR 190 lakh, even though the business made a profit of INR 60 lakh. This is because customers now pay much later, so receivables rose by INR 200 lakh, and inventory rose by INR 70 lakh, together far more than the INR 80 lakh of profit plus depreciation. The risk is that the business runs short of cash while it still reports profits. As a next step, collect from customers faster, starting with the largest late payers, and cut slow-moving stock.

Score the candidate

Score each criterion from 1 to 5. A 2 or a 4 sits between the descriptions.

This case has no exhibit. Score Exhibit reading on how the candidate used the data you gave them: did they pick out the number that matters and say what it means?

Structuring

1: No clear structure, or a memorized framework that does not fit the problem.
3: A sensible structure, but with some overlap, a gap, or no clear priority.
5: A structure built for this problem, with no overlap and no gaps, a stated hypothesis, and a clear first step.

Math

1: Frequent errors, no units, or needed heavy help to finish.
3: Right answers but slow or messy working, or one error caught late.
5: Accurate and clearly narrated, with units, a sense check, and what the number means.

Exhibit reading

1: Read the chart aloud without finding the number that matters.
3: Found the key number but gave only part of the so-what.
5: Pulled the right number quickly and said what it means for the case.

Synthesis

1: Summarized what was done, with no clear answer.
3: Gave an answer, but with weak reasons or no next step.
5: Answer first, then two or three reasons with numbers, the main risk, and next steps.

Communication

1: Hard to follow: long silences, no signposting.
3: Clear most of the time, with some rambling.
5: Calm and concise, signposted each step, and checked in with the interviewer.

Total

0 out of 25

Score all five criteria to see the band and the feedback template.