Profitability Framework 2026: Every Number Computed

The profitability case framework is already in the prompt

A profit case hands you a change and asks for its cause. The change lives in four terms: price, volume, variable cost per unit, and fixed cost. A cause is a term that moved. That is the whole diagnostic, and it means the first question is arithmetic rather than judgment.

Two habits follow from it. Ask for the two years before asking for explanations. And ask for volume in the unit the business actually sells, because a total can rise while the unit yield collapses.

L.E.K. publishes the same instruction as its first step. Its preparation page tells candidates to "repeat or paraphrase to be sure you understand; state your assumptions and restate the facts", checked 29 September 2026 at lek.com. Restating the facts is where the four terms get written down.

One more test belongs at the front. A decline inside a growing market is a different problem from a decline inside a shrinking one. The Census Bureau put United States retail and food services sales at 773.9 billion dollars in August 2026, up 1.2 percent on July, in release CB26-153 of 16 September 2026, published at census.gov. Against a sector moving at that rate, a flat top line is a loss of share. Ask what the market did before you open the client.

A profitability case prompt, with the data Cedar Line hands over

Cedar Line runs 60 express car washes in the United States Southeast. Store count did not change over the two years in question. It sells two things: a single wash at 15 dollars, and a monthly unlimited membership at 30 dollars.

The chief executive says revenue grew and profit fell, and wants to know which of those two facts to act on.

Here is everything the interviewer gives you, in the order you would ask for it.

1. Revenue. 54.0 million dollars last year, 57.6 million this year.
2. Operating profit. 8.1 million dollars last year, 6.3 million this year.
3. Single washes sold. 2.4 million last year, 1.8 million this year.
4. Average members. 50,000 last year, 85,000 this year.
5. Member usage. Two washes a member a month last year, three this year.
6. Variable cost. 3 dollars a wash, water, chemicals and labor, unchanged.
7. Fixed cost. 35.1 million dollars last year, 36.72 million this year.

Nothing here is an exhibit yet. It is a list of the four terms, twice, plus the one operational fact that connects them, which is how often a member uses what they bought.

A profitability framework derived from the equation

Write the four terms and hang the client's two products under each. That is the structure, and it took no framework.

• Price. Single wash price. Member price. Realized revenue per wash, which is a consequence of the first two and of the mix.
• Volume. Single washes. Member-driven washes, which equal members times usage times twelve.
• Variable cost. Cost per wash times total washes, including the washes members take at no extra charge.
• Fixed cost. Site, equipment, payroll floor, and overhead.

The member product breaks the usual habit. A membership is sold by the month and consumed by the wash, so it has a price the customer sees and a yield the operator earns. Those two numbers separate the moment usage moves.

That is also where a bought framework fails. A profit tree copied from a book gives you revenue and cost, then stops before the unit that revenue is earned on. Bain's recruiting blog makes the point from the other side of the table. Alice Scully, who recruits for the firm in the EMEA region, wrote on 11 March 2026: "Pause, structure your thinking, and talk us through your logic." The structure that survives being talked through is the one you can derive.

Posing the calculation, unit by unit

Work volume first, because every cost line depends on it.

Member washes last year: 50,000 members times 2 washes times 12 months is 1.2 million washes. Add the 2.4 million single washes and total volume is 3.6 million washes. This year: 85,000 times 3 times 12 is 3.06 million, plus 1.8 million single washes, so 4.86 million washes.

Variable cost follows. 3.6 million washes at 3 dollars is 10.8 million dollars. Then 4.86 million at 3 dollars is 14.58 million dollars.

Now contribution, which is revenue minus variable cost. Last year, 54.0 minus 10.8 is 43.2 million dollars. This year, 57.6 minus 14.58 is 43.02 million dollars. Contribution moved by 180,000 dollars on a 3.6 million dollar revenue increase.

Fixed cost rose from 35.1 to 36.72 million dollars, a rise of 1.62 million.

Check the profit against both years. 43.2 minus 35.1 is 8.1 million. Then 43.02 minus 36.72 is 6.3 million. Both match the prompt, so the split is complete and nothing is hiding.

The profit fall is 1.8 million dollars. Of that, 1.62 million is fixed cost growth and 180,000 is the contribution decline. 1.62 divided by 1.8 is 0.90. Fixed cost carries 90 percent of it.

Per-unit yield, which is the actual finding

Totals hid the interesting part, so go per member. A member paying 30 dollars and taking two washes leaves 30 minus 6, so 24 dollars a month, or 288 dollars a year. At three washes the same member leaves 30 minus 9, so 21 dollars a month, or 252 dollars a year.

Multiply out. 50,000 members at 288 dollars is 14.4 million dollars of contribution. Then 85,000 at 252 dollars is 21.42 million. The member line added 7.02 million dollars.

Single washes went the other way. Each leaves 15 minus 3, so 12 dollars. 2.4 million at 12 dollars is 28.8 million. Then 1.8 million at 12 dollars is 21.6 million. The retail line lost 7.2 million dollars.

Add them: 21.42 plus 21.6 is 43.02 million, which matches the contribution computed above. The membership absorbed the retail decline and 180,000 dollars more.

So the mix shift is close to neutral in dollars, while being alarming in structure. A single wash leaves 12 dollars. A wash taken by a member leaves 21 dollars a month spread over three washes, which is 7 dollars a wash. The business is converting its best unit into its worst one and calling it growth.

The exhibit, two years on one page

Revenue per wash is the line to read out loud. 54.0 million over 3.6 million washes is 15 dollars. Then 57.6 million over 4.86 million is 11.85 dollars. The business sells a third more washes for a fifth less each.

This is the kind of table the published cases leave out. Bain's own profit case, FashionCo, states its prompt and its two option assumptions in text, then publishes both computed totals as images, checked 29 September 2026 at bain.com. The assumptions and the conclusion are readable. The arithmetic between them is not, and a candidate cannot check what they cannot see.

A priced recommendation, and the number that cancels it

Two levers, both quantified, in the order their size demands.

Fixed cost, 1.62 million dollars. It grew 4.6 percent with store count flat, and it carries 90 percent of the profit fall. Recovering half of it returns 810,000 dollars. That is a line-by-line argument to have with the operators. No strategy is involved.

Member price, from 30 to 33 dollars. At three washes a month the yield becomes 33 minus 9, so 24 dollars a month, or 288 dollars a year. With 85,000 members that is 24.48 million dollars of contribution, an increase of 3.06 million, if nobody leaves.

Now the risk, priced. Assume 10 percent of members quit. 76,500 members at 288 dollars is 22.032 million, so the gain shrinks to 612,000 dollars. Add the fixed cost recovery and the pair returns 1.422 million against a 1.8 million dollar hole, which is roughly 79 percent of it.

The risk that matters is worse than churn volume, and it is selection. A price rise pushes out light users first, and a light member is the profitable one, because the fee is fixed and the washes are what cost money. Work it in the order the numbers arrive. Members take 85,000 times 3, so 255,000 washes a month. If each of the 8,500 leavers averaged one wash, they remove 8,500 washes, leaving 246,500 across 76,500 members, which is 3.22 washes each. Yield becomes 33 minus 3 times 3.22, so 23.33 dollars a month, or 280.00 a year. Then 76,500 at 280.00 is 21.42 million dollars, the same figure the membership earns today.

One wash a month is therefore the exact break-even profile for a leaver. Above it the rise gains, below it the rise loses. At half a wash a month the remaining base holds 250,750 washes, yield falls to 278.00 a year, and 76,500 at 278.00 is 21.267 million, which sits 153,000 dollars under today.

So the recommendation is conditional, and the condition is measurable. Price the membership up only where usage data shows few members under one wash a month, and cap included washes before touching the headline price.

Where the points go, and what each label costs

Our own rubrics score these answers, and the weights below are ours rather than any firm's. No consulting firm publishes a rubric. The math rubric we run, read from the code in src/lib/grading, splits a numeric answer into Answer 40, Working 25, Units 15 and Interpretation 20. The structuring rubric splits into Coverage 45, Separation 25, Depth 20 and Concision 10. Each is reported as its own number, with the correction named. Every weight and the reasoning behind it is set out on how an answer is assessed.

Three failures recur on this case type, and each maps to one of those lines.

1. Totals without a unit yield. The candidate reports revenue up and profit down, then guesses. Working 25 and Interpretation 20 both drop, because the split was never posed.
2. The wrong denominator. Dividing revenue by members instead of washes gives 677 dollars and a story about loyalty. Units 15 goes, and the Answer follows it.
3. A recommendation with no number. Saying to raise prices without sizing churn leaves the client unable to act. On the synthesis rubric, which weights Answer first 35, Evidence 25, Risk 20 and Next step 20, the Risk line is the one that empties.

The correction is the same in all three cases. Write the unit before the number, and write the number before the sentence that interprets it.

Repeating this case under a clock

Take the prompt above, cover everything from the calculation section down, and give yourself eight minutes to produce the four-term split and the profit reconciliation. You have the answers here to mark yourself against.

Then change one input and redo it. Set member usage to four washes a month and the yield becomes 30 minus 12, so 18 dollars a month, or 216 a year. At 85,000 members that is 18.36 million dollars of contribution, which is 3.06 million below this year's 21.42 million. Total contribution falls to 39.96 million, and profit against 36.72 million of fixed cost drops to 3.24 million. The structure holds and only the conclusion moves.

Our math drill runs timed arithmetic of this shape and returns the four rubric lines with the first correction named, and the structuring drill does the same for the split. Both are free and need no account. Neither of them teaches you an industry, and neither will tell you which unit a client sells, which is the judgment this page has been about. Our assessment simulators cover firm built formats, and that page states itself that none of the six is live yet.

For a case where the same equation is read per customer rather than per unit, see customer profitability cases. For the version where the question is whether to enter at all, see market entry.