andrew@agcapitalcfo.com

Stage 2 (2023) – “Stolen Stars”

Professional Excel Templates for your Business

Stage 2 (2023) - "Stolen Stars"

This is an actual case study that was presented to the participants of the Financial Modeling World Cup 2023, Stage 2 (March 10-13, 2023).

Case study description:

The year is 2003. You are a financial modeler at a young internet retail platform called ‘Nile’. To help convince companies to sign up and sell through your platform, Nile has an incentive where retailers earn money based on the reviews they receive. Due to a security breach, data on the number of stars for 2003 has been temporarily lost. A news story has gone live about fake reviews online and the CFO needs an urgent estimate of the incentive payment for 2003 to reassure the shareholders.

This case is about what you can do when you have some information about inputs for your financial model, but don’t have precise numbers. Therefore, you need to use available information and apply statistical techniques such as Bayes’ Rule, purity calculations, and classification trees to estimate the incentive payment for 2003 based on the distribution of stars in the 2002 reviews. The challenge is to make accurate estimates despite the lack of precise data for 2003 and potential differences in the distribution of reviews between 2002 and 2003.

The downloadable file consists of the following:
Task: PDF file with Case Materials; PDF file with Questions; Excel file with initial data and case assumptions
Solution: Excel file with full Solution Model; PDF file with correct Answers in Bold

You can also buy tickets to participate in the future FMWC Stages here.

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