Financial Analysis puzzles, solved step by step
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- 100
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- Hard
- 30
037Estimate how many new narrow-body aircraft India's airlines will need each year over the next decade.Rothschild & CoParis · 2026Rothschild & CoParis · 2026
Try it first
Which split gives you the cleanest structure for this estimate?
Show the worked solution
About 106 a year, on stated assumptions. Assume 15 crore domestic trips a year. A 180-seat jet, 85% full, flying 5 sectors a day for 350 days carries about 2.68 lakh passengers, so the fleet is about 560 jets. At 8% traffic growth it needs 1,209 in ten years, 65 more a year, plus about 41 retirements a year on a 20-year life.
How do you turn passengers into aircraft?
Think of a school deciding how many buses to buy. It counts the children who need a seat, divides by how many one bus can carry in a day, then adds buses for next year's bigger intake and for the old ones being scrapped. Aircraft demand is the same: fleet size is passenger trips divided by what one jet carries in a year, and new orders are fleet growth plus replacement. State each number as an assumption, because the interviewer cares about the structure first and the inputs second.
Start with traffic. Assume about 15 crore domestic passenger trips a year, and tell the interviewer you would check the current figure in the aviation regulator's monthly traffic data. A narrow-body has about 180 seats; assume 85% of them are filled, 5 sectors a day and 350 flying days. That is 267,750 passengers a jet a year, so today's fleet is about 560 jets.
Fifteen crore trips at about 2.68 lakh passengers per jet need about 560 jets today and 1,209 in ten years at 8% growth, which adds 65 jets a year, and replacing jets on a 20-year life adds about 41 more, for roughly 106 new narrow-bodies a year. Which assumption moves the answer most, and what did you leave out?
Growth carries more of the answer than replacement: at 8% a year the fleet more than doubles in ten years, adding 65 jets a year, while retirements on a 20-year life add 41. The number most worth defending is passengers per jet, because a sixth sector a day would cut the fleet by a sixth and every later number with it. Then name what you left out: international short-haul routes also fly narrow-bodies, airlines hold spare aircraft for maintenance, and engine problems can ground jets for months. Each pushes the true need above 106. Also say that orders and deliveries differ: airlines order years ahead, so order books can be far larger than a decade's need.
Where candidates lose it
Candidates jump to a number they half remember from a news story about a record order. That is not an estimate, and it is often an order book spread over many years, not annual demand. Build it from passengers and the interviewer can follow every step.
The second loss is forgetting replacement entirely, or adding it as a fraction of today's fleet instead of the growing one. Average the fleet over the decade, or at least say that retirements grow with it.
What the interviewer asks next
- How does the answer change if load factors rise to 90%?
- What share of the demand would one airline with a third of the market need?
- How would you size wide-body demand differently?
Asked at Rothschild & Co, Asset Management, Paris, 2026 (Wall Street Oasis):
Can You estimate number of flights solds by airbus
Asked at Rothschild & Co, Asset Management, Paris, 2026 (Wall Street Oasis):first part was more about market sizing and logic reasoning
079Estimate the value of two-wheeler loans disbursed in India in a year.Oaktree Capital ManagementLos Angeles · 2022
Try it first
Which three quantities, multiplied, give the annual disbursement?
Show the worked solution
Roughly Rs 70,000 to 75,000 crore a year, on the assumptions below. Start from an assumed 1.8 crore two-wheelers sold a year, assume a little over half are bought on credit, and lend about three quarters of the price. Splitting the market into commuter motorcycles, scooters and premium bikes gives about 99 lakh loans averaging Rs 73,600, or Rs 72,832 crore. Every input is an assumption to state and then confirm.
What is the structure before any number?
To estimate what a college canteen sells on credit, you would count meals, the share put on a tab, and the average tab. Loans work the same way. A finance market size is units times financing penetration times ticket size, and saying that structure first lets the interviewer follow every number after it. Here the units are new two-wheelers sold in a year, penetration is the share bought on a loan, and the ticket is the price less the down payment.
Assume about 1.8 crore two-wheelers are sold in India a year. Treat that as an assumption to confirm against the industry body's current sales data, never a fact to quote. Prices range from a basic commuter bike to a premium motorcycle, so one average price is fragile; split the market three ways instead.
Segment Share of units Price, Rs Bought on a loan Loan to price Loans, lakh Disbursed, Rs crore Commuter motorcycles 55% 85,000 60% 75% 59.4 37,868 Scooters 35% 1,00,000 50% 75% 31.5 23,625 Premium and electric 10% 2,00,000 45% 70% 8.1 11,340 Total 100% 55% 99.0 72,832 Every price, share and loan ratio is an illustrative assumption, not a market statistic. Multiplying units by the share financed and by the loan size in each segment gives about Rs 37,868 crore from commuter motorcycles, Rs 23,625 crore from scooters and Rs 11,340 crore from premium bikes, about Rs 72,832 crore in all. How do you check it a second way?
Run it top-down in one line: 1.8 crore units x 55% financed x 75% of an average Rs 1,00,000 price is Rs 74,250 crore. Two routes landing within about 2% of each other is the check, and the segment split earns its place by showing where the uncertainty lives. The softest input is the financed share: every 5 points on it moves the answer by about Rs 6,621 crore. Then a feel check: 99 lakh loans a year is about 27,123 loans a day across the country, which is plausible for a mass market sold through thousands of dealers.
Say what the number is not. It is a yearly flow of new loans. The loan book outstanding at any time is a stock: with loans running about two and a half years and repaid evenly, the average loan is half outstanding for that period, so the book is roughly 1.25 times a year's disbursement, about Rs 91,041 crore. Used-vehicle loans are excluded.
Where candidates lose it
The fast wrong answer multiplies units by the full price and calls it the loan market: 1.8 crore x Rs 1,00,000 = Rs 180,000 crore, more than double the estimate. It forgets that many buyers pay cash and that borrowers put down a deposit.
The second loss is quoting industry figures as if you knew them. Say 'assume about 1.8 crore units a year' and move on; the interviewer is marking the structure, the second route and the sanity check, not your memory of a statistic.
What the interviewer asks next
- How does the answer change if electric two-wheelers rise to a quarter of units?
- What is the outstanding loan book, rather than the annual disbursement, and why does the difference matter to a lender?
- Which input would you research first, and where would you look?
Asked at Oaktree Capital Management, Corporate Finance, Los Angeles, 2022 (Wall Street Oasis):
First round with recruiter, mostly behavioral with a few questions about market sizing
