Glossary

Buckets that do not overlap and together cover everything.

A branching diagram that breaks a problem into smaller parts.

An issue tree built from the numbers that drive an outcome.

Your best early guess at the answer, which you then test.

Changing one assumption at a time to see which matters most.

A small share of causes often drives a large share of results.

Say the answer first, then the reasons.

Pulling the findings into a clear so-what and recommendation.

The single most important takeaway from a fact or exhibit.

Answer first, then grouped reasons, each backed by facts.

A chart or table the interviewer hands you to reason from.

A change in a rate is measured in points; its relative change in percent.

The steady yearly growth rate that links a start value to an end value.

Years to double is about 72 divided by the growth rate.

An average where each part counts in proportion to its size.

Indian number units: 1 lakh = 100,000 and 1 crore = 10 million.

Current performance scaled up to a full year.

Estimating how big a market or quantity is.

Start from a big total and narrow it down.

Start from a small unit and scale it up.

The money left over after costs. Revenue minus cost.

Money earned from sales, before costs.

What it takes to make and sell the product in a period.

A cost that stays the same when volume changes, within a normal range.

A cost that rises and falls with how much you make.

A cost with a fixed part and a part that moves with volume.

A cost that is flat over a range, then jumps.

The extra cost of making one more unit.

Profit on a sale, as an amount per unit or as a percent of price.

How much you add on top of cost to set the price.

The direct cost of making the products that were sold.

Revenue minus the cost of goods sold, as an amount or a percent.

What each sale adds after its own variable cost.

Revenue minus all variable costs, as an amount or a percent of revenue.

The volume or revenue at which profit is exactly zero.

Running costs that are not part of COGS.

Profit from operations, before interest and tax.

Earnings before interest, taxes, depreciation and amortization.

Profit after every cost, including interest and tax.

Spending on long-lived assets such as machines and buildings.

Spreading the cost of a long-lived asset over its useful life.

Revenue, costs and profit over a period.

What a company owns and owes at one point in time.

Where cash came from and where it went.

Cash from operations minus capital expenditure.

Cash tied up in running the business day to day.

How much profit swings when revenue changes, because of fixed costs.

Money already spent that cannot be recovered.

The value of the best option you give up.

Sales taxes collected by businesses for the government.

The gain from an investment relative to its cost.

How long until an investment earns back its cost.

Money today is worth more than the same money later.

The rate used to turn future cash into today's value.

The return a company must earn to satisfy its lenders and owners.

Today's value of all future cash flows, minus the upfront investment.

The discount rate at which NPV is exactly zero.

Valuing a business from the future cash it will generate.

The value of the whole business, to lenders and owners together.

Value as a multiple of a financial measure, based on similar companies.

How many times the money invested comes back.

Buying a company mostly with borrowed money.

Extra value created when two businesses combine.

Careful checking of a target before you buy it.

Total market, the part you can serve, and the part you can win.

Our sales as a share of total market sales.

Our share divided by the largest competitor's share.

The share of potential customers who already use the product.

Our share of what one customer spends in the category.

Revenue divided by the average number of users.

Revenue divided by the number of orders.

What it costs, on average, to win one new customer.

The profit a customer is expected to bring over the whole relationship.

The share of customers who leave in a period, and the share who stay.

How strongly the quantity sold reacts to a change in price.

The most a rational customer should pay, given their next best option.

Setting the price from what the product is worth to the customer.

Price = cost plus a fixed markup.

Charging different customers different prices for the same product.

Selling several products together for one price.

A new product taking sales from the company's own products.

The revenue and cost of one unit: one product, order or customer.

Cost per unit falls as volume rises.

Cost falls when related products share resources.

What makes it hard for new competitors to enter a market.

The cost or effort for a customer to change supplier.

A product becomes more valuable as more people use it.

What lets a firm earn more than its rivals over time.

Owning more stages of your own supply chain.

Combining with firms at the same stage, often competitors.

When products become interchangeable and compete mainly on price.

Five pressures that shape how profitable an industry is.

Compete on lowest cost, on being different, or by focusing on a niche.

Sorting businesses by market growth and relative market share.

Four growth routes: existing or new products in existing or new markets.

Seven parts of an organization that must fit together.

Strengths, weaknesses, opportunities and threats.

Political, economic, social, technological, environmental and legal factors.

The activities a firm performs to create and deliver value.

Customer, company, competitors: three angles on a market.

Product, price, place, promotion: the marketing mix.

A reusable way to break down a common kind of problem.

The slowest step, which limits the output of the whole process.

Actual output as a share of the most that could be produced.

Items in a system = arrival rate × time each item spends in it.

How many times stock is sold and replaced in a year.

The full cost of getting a product to your door, not just its purchase price.

How many days cash is tied up between paying suppliers and collecting from customers.

How reliably a supplier delivers what was ordered, measured by fill rate and on time in full.

Small changes in shopper demand grow into large swings in orders further up the supply chain.

Extra inventory held to protect against demand spikes or late deliveries.

The time from placing an order to receiving it.

The total profit earned across an industry, and how it splits between steps of the value chain.

The interviewer drives through set steps.

You drive the structure and the path.

A deep, structured dig into one of your real stories.

A clean shape for telling a story.

The personal half of the interview, about you.

The main hiring season versus hiring in between.

A timed, interactive screen that tests how you think.

A timed online case run by a chatbot, ending with a recorded video.

What a bank earns on its loans and investments after paying for its funding, as a share of those assets.

Operating costs as a share of operating income. Lower means a more efficient bank.

Loan loss charges as a share of loans, usually quoted in basis points.

The share of a bank's loans that borrowers have stopped paying.

A bank's highest-quality capital as a share of its risk-weighted assets.

Whether a bank holds enough easy-to-sell assets to survive 30 days of stress.

Loans divided by deposits: how much of its deposit base a bank has lent out.

The share of deposits held in low-cost current and savings accounts.

Net income as a share of shareholders' equity.

The share of a change in policy interest rates that a bank passes on to depositors.

An Islamic finance sale at cost plus an agreed profit, usually paid in instalments.

An Islamic finance lease: the bank owns the asset and rents it to the customer.

Islamic certificates that give investors a share in assets, used in place of bonds.

Claims as a share of premiums earned.

An insurer's costs of selling and running policies as a share of premiums.

Loss ratio plus expense ratio. Below 100 percent means an underwriting profit.

Insurance for insurance companies.

Premiums an insurer holds and invests before it pays claims.

The share of policies still in force and paying after a set time.

Islamic insurance built on mutual help, where members share each other's losses.

The fee the merchant's bank pays the cardholder's bank on each card payment.

The total fee a merchant pays to accept a card or digital payment.

The bank or firm that gives a customer a card and, for credit cards, takes the credit risk.

The bank or firm that lets a merchant accept card payments.

The network that sets the rules and connects issuers and acquirers, such as Visa or Mastercard.

The share of each transaction's value that a platform keeps as revenue.

One hundredth of a percent: 100 basis points make 1 percent.

Paying for a purchase in a few interest-free instalments, with the merchant paying a fee.

Account-to-account transfers that settle in seconds, at any hour.

The total market value of the money a firm manages for clients.

New client money coming in minus money taken out.

Trying to beat the market versus simply tracking it at low cost.

A state-owned investment fund, often built from oil revenues or reserves.

The firm that raises and runs a private equity or venture fund.

An investor that puts money into a private equity or venture fund.

The general partner's share of a fund's profits, usually 20 percent.

The minimum return a project or fund must beat before it counts as worth doing.

Money investors have committed to funds but that has not yet been invested.

Checking the market and competitive case behind an investment before the deal.

In venture capital, a few big winners produce most of the returns.

The yearly value of all active subscription contracts at a point in time.

How much recurring revenue a group of existing customers brings in a year later.

How many months of gross profit it takes to earn back the cost of winning a customer.

A software company's growth rate plus its profit margin should add up to at least 40 percent.

The total value of goods or services sold through a platform.

The price an advertiser pays for 1,000 views of an ad.

The price an advertiser pays each time someone clicks an ad.

Revenue earned for each unit spent on advertising.

One app that bundles many services, such as messaging, payments, rides and shopping.

When users or sellers use several competing platforms at the same time.

The radio frequencies mobile operators license from governments to carry signals.

Capital spending as a share of revenue.

The share of homes or customers who could buy a service that actually do.

A chip company that designs chips but has them made by someone else.

A company that manufactures chips designed by other firms.

The share of units made that come out good enough to sell.

Total data center power divided by the power used by the computing equipment.

Sales growth from stores open in both periods, leaving out new and closed stores.

Store sales divided by selling space: how productive the space is.

Inventory lost to theft, damage, errors or spoilage.

A lasting price cut to clear stock that is not selling.

The share of stock received that has been sold within a period.

Products sold under the retailer's own brand rather than a manufacturer's.

The money brands pay retailers and distributors to stock, display and discount their products.

The gap between list price and the net price a company actually keeps.

Organized retail chains such as supermarkets, hypermarkets and e-commerce.

Small independent shops, such as kiranas in India, reached through distributors.

The share of all relevant stores that stock a product.

The share of total category sales made by the stores that stock a product.

How many units a product sells per store per week, in the stores that stock it.

The highest price, including all taxes, at which a packaged product can legally be sold in India.

Selling your own stock versus letting other sellers sell on your platform for a fee.

A small warehouse, closed to shoppers, used only to fill online orders quickly.

Delivering groceries and daily items in about 10 to 30 minutes.

The final step of delivery, from a local hub to the customer's door.

The share of items sold that customers send back.

Food and drink cost plus labour cost, the two biggest restaurant costs.

How many times each table is used by a new group in a meal period or day.

One guest served a meal: the unit restaurants count.

The US name for like-for-like sales: growth at restaurants or stores open in both periods.

Average yearly sales per restaurant or store.

The ongoing fee a franchisee pays the brand, usually a percentage of sales.

The right to develop a brand across a whole country or region, including signing sub-franchisees.

An app that lists many restaurants and delivers their food for a commission.

The share of available rooms (or beds) that are filled over a period.

The average price paid per hotel room sold.

Rooms revenue divided by all rooms available: occupancy times ADR.

A hotel's profit after the costs of running it, before fees, rent and ownership costs.

A website or app that sells rooms and flights from many providers, such as Booking.com or Expedia.

A deal where a hotel company runs a hotel it does not own, in return for fees.

Growing a business without owning the heavy assets, by franchising, managing or leasing them.

One seat flown one kilometre: the standard measure of airline capacity.

One paying passenger flown one kilometre: the standard measure of airline traffic.

The share of seats filled with paying passengers: RPK divided by ASK.

Passenger revenue per revenue passenger kilometre: the average fare per kilometre.

Total airline revenue divided by ASKs.

Total airline operating cost divided by ASKs.

The load factor at which revenue exactly covers costs at current fares.

Locking in the price of part of future fuel to reduce the risk of price swings.

Permission to use a busy airport at a set time to land or take off.

Monthly aircraft rent as a share of the aircraft's value.

An airline network that routes passengers through a central airport to connect many cities.

An airline built for the lowest cost per seat, selling cheap fares plus paid extras.

The international rights that let airlines fly over, land in and carry passengers between countries.

Streaming paid for by subscription (SVOD) versus paid for by advertising (AVOD).

The share of available ad slots that are actually sold and shown.

Spreading the cost of films and shows as an expense over the years they are expected to earn.

Revenue divided by only the users who pay, not all users.

The share of users who pay for something in a period.

Daily active users divided by monthly active users: how often people come back.

A store the brand owns and runs itself, rather than selling through another retailer.

Selling goods to other retailers, such as department stores, which resell them.

Shops in airports, on aircraft and at borders, often selling duty free.

Growth measured as if exchange rates had not changed, to show the real business trend.

School from kindergarten to grade 12, the final year of secondary school.

The number of students for each teacher.

The share of eligible students who return to the same school or course the next year.

The share of learners who finish the course or program they started.

When a drug's patents and other protections end and cheaper copies can launch.

A near copy of a biologic medicine, approved as having no meaningful clinical difference.

A system that pays hospitals a fixed amount per admission, based on the diagnosis and treatment.

Paying a provider a fixed amount per person per period, whatever care they use.

The share of health insurance premiums spent on medical care and quality improvement.

A cost or revenue figure divided by the number of members and months, used by health plans.

Hospital revenue divided by occupied bed days, a key measure for Indian hospital chains.

The average number of days patients stay in hospital per admission.

A long-term contract in which a private company builds, finances or runs public infrastructure or services.

A regular payment from government to a PPP partner for keeping an asset open and up to standard.

A chain from inputs to activities, outputs, outcomes and impact that shows how a program is meant to work.

The part of an outcome that would not have happened without the program or investment.

A unit that converts gas into barrels of oil by energy content, so oil and gas can be added together.

The cost of producing oil or gas from wells that already exist, per barrel.

The oil price a project needs to cover all its costs, including building it, and earn its required return.

The oil price a government needs to balance its budget.

The gap between the price of crude oil and the prices of the fuels made from it.

What a producer keeps per barrel after transport, royalties and production costs.

How fast production from existing oil and gas wells falls each year without new investment.

An oil and gas company owned or controlled by a government.

A group of oil-producing countries, OPEC members plus other producers, that coordinate production targets.

A deal in which an oil company pays to find and produce oil and is repaid with a share of the output.

Natural gas cooled into a liquid so it can be shipped across oceans.

A contract clause that excuses a party when an extraordinary event outside its control stops it from performing.

A power plant's actual output as a share of what it could produce running at full power all the time.

The average cost of each unit of electricity over a plant's life, including the cost of building it.

Running power plants from cheapest to most expensive running cost until demand is met.

A long-term contract to buy electricity from a generator at an agreed price.

A private company that owns power plants and sells electricity to utilities or large buyers.

The value of a regulated utility's assets on which the regulator lets it earn a return.

Deliberately cutting wind or solar output because the grid cannot take all of it.

The share of electricity put into a network that is never paid for, a key measure for Indian power distributors.

The share of energy put into storage that comes back out.

How much metal a tonne of ore contains.

The share of metal in the ore that processing actually captures.

Tonnes of waste rock removed for each tonne of ore in an open-pit mine.

A mine's direct cash cost to produce one unit of metal, after by-product credits.

A gold miner's full cost to keep producing an ounce, including sustaining capital.

All producers ranked from lowest to highest cost, showing who is the marginal producer.

Iron made by removing oxygen from iron ore with gas or hydrogen, without melting it.

A furnace that makes steel by melting scrap or DRI with electricity.

The raw material fed into a process, such as naphtha or ethane for a chemical plant.

A plant that breaks hydrocarbons into ethylene and other building-block chemicals using steam and heat.

High-volume standard chemicals sold on price versus smaller-volume chemicals sold on performance.

In autos and machinery, the company that designs, assembles and brands the final product.

A supplier that sells complete parts or systems directly to the carmaker.

A shared set of engineering underpinnings used for many car models.

The cost of an electric vehicle's battery pack, usually quoted per kWh of capacity.

The number of a company's machines or systems currently in use at customers.

Parts, service, repairs and upgrades sold after the original equipment.

The value of orders a company has received but not yet delivered.

New orders received divided by revenue billed in the same period.

Availability x performance x quality: how much truly good output a machine makes versus its potential.

Choosing whether to produce something in-house or buy it from a supplier.

The standard measure of container volume: one 20-foot container.

A company that arranges shipping for customers by buying space from carriers, without usually owning ships or aircraft.

A company a business pays to run its warehousing, fulfilment or transport.

How long a container, truck or shipment waits at a port or terminal before moving on.

A port where containers are moved between ships on their way to other destinations.

An area with special customs, tax or ownership rules to attract trade and investment.

The cost of each delivery stop in last-mile logistics.

A property's income after operating costs, before debt payments, depreciation and income tax.

A property's net operating income divided by its value: its yield at today's price.

A company that owns income-producing property and pays out most of its income to investors.

A loan as a share of the value of the property securing it.

A contract where one contractor designs, buys and builds a project and hands it over ready to run.

The longest chain of dependent tasks in a project, which sets how fast it can finish.

The difference between what farms actually harvest and what they could harvest with better practices.

Food lost between harvest and the shop, through poor storage, handling and transport.

A temperature-controlled supply chain for food, medicines and other perishables.

Kilograms of feed needed to produce one kilogram of animal weight or output.

The price at which the Indian government offers to buy certain crops from farmers.