Financial Analysis puzzles, solved step by step

About 2,000 sit-down cafés, as a range of roughly 1,000 to 4,000. Take about 1.3 crore people, 70% of them aged 15 to 64, and assume 20% of those visit a café twice a week. That is about 5.2 lakh cups a day; at 250 cups a café a day, about 2,080 cafés. A supply check, 150 commercial clusters with 10 cafés each plus 500 neighbourhood ones, gives about 2,000.

What exactly are you counting?

Say the definition before any number. In Bengaluru the answer changes several times over depending on whether small standing filter coffee counters count, so define a coffee shop as a sit-down café selling espresso-style coffee and say you are leaving the counters out. Then state the population as an assumption, about 1.3 crore for the metro area, and tell the interviewer you would confirm it. In a market sizing nobody is marking the population figure; they are marking whether your chain of reasoning holds.

How do you build it from demand?

Think of a single café first: how many cups does it need to sell to pay its rent? Then ask how many cups the city drinks. Of 1.3 crore people, about 70% are aged 15 to 64, so 91 lakh. Assume 20% of them use cafés, 18.2 lakh people, at two cups a week each: 36.4 lakh cups a week, or about 5.2 lakh a day. A café open 12 hours selling around 20 cups an hour serves about 250 cups a day, so the city supports about 2,080 cafés.

How do you check it, and which assumption matters most?

Count from the other side: supply. Picture the tech parks, malls and busy high streets, say 150 of them, with about 10 cafés each, plus about 500 standalone neighbourhood cafés. That is about 2,000, close to the demand answer. Then name the swing factor. The 20% share of café users is the softest input: halve it and the answer falls to about 1,040. Say the range out loud, roughly 1,000 to 4,000, because a single precise number from soft inputs sounds less credible, not more.

About 2,520 ATMs, on stated assumptions. Of one crore people, 70 lakh are adults and 60% of them, 42 lakh, use ATMs about three times a month: 4.2 lakh withdrawals a day. If 12% fall in the busiest hour, that is 50,400 an hour. A machine handles 30 an hour at two minutes each; plan for two-thirds busy, 20 an hour, and you need about 2,520.

Where do you start, demand or supply?

Think of a canteen deciding how many counters to open. It does not divide the day's meals by 24 hours; it counts the lunch rush and opens enough counters for that. Size a service network to its peak load, so the estimate runs from people to withdrawals to the busiest hour, and only then to machines. Start with demand: 70% of one crore are adults, 70 lakh; assume 60% of them use ATMs for cash, 42 lakh, and that each withdraws three times a month. That is 1.26 crore withdrawals a month, or 4.2 lakh a day.

How much does the peak assumption change the answer, and how do you check it?

Machines stand idle at 3 a.m. and have queues at 6 p.m. If you spread 4.2 lakh withdrawals evenly over 24 hours, you would size for 17,500 an hour and buy 875 machines. The peak-hour share is the assumption that moves the answer most: at 12% of the day in one hour, the city needs nearly three times what the average implies. The same logic explains the planning margin: a machine busy 100% of the time has a queue that never clears, so plan for two-thirds use. Then sanity check the result: 2,520 machines for one crore people is about 25 per lakh, a ratio you can compare with the published ATMs-per-lakh figure for the city, which you should look up rather than quote from memory.

Say what you left out. Salary days bring a bigger rush at the start of the month; digital payments are shrinking cash use, so the user share and the withdrawals per month are both falling; and machines sit where people work and shop, so a city with a dense business district needs more than population alone suggests.