Turnaround Case Interview Example: Runway Math and Answer

A turnaround case interview example gives you a company that is losing money and may run out of cash, and asks how to stop the cash drain and return it to profit. This turnaround case study example follows a made-up chain, Elmstead Department Stores: it has 6 months of runway, and six of its 25 stores lose $18M.

This guide covers the runway math, where the losses sit, which fixes go first and the do-nothing baseline, from the prompt to the recommendation.

Start with runway: cash plus undrawn credit, minus the cash floor, divided by monthly burn. Then rank fixes by speed to cash.

Practice it live: Voltigo FastCharge Turnaround is a different client with its own data: 60 EV charging sites in France that fell into an operating loss. It has 7 questions, 3 with math and 3 exhibits, and an AI interviewer runs it out loud.

Turnaround case study example: the Elmstead Department Stores prompt

Here is the case as an interviewer would give it. Elmstead is invented, and so are all of its numbers.

Revenue is down 13% in three years ($45M on $345M). That is a decline, not yet a diagnosis. Before you structure anything, ask clarifying questions. Here is a good set, with the interviewer's answers.

Q: What does success look like, and what limits us? A: Run-rate operating profit above zero within 12 months. Cash must never fall below $6M, which is what Elmstead needs for inventory and payroll. No new equity.

Q: How much cash is there, and what is the burn? A: $15M in cash. The credit line is fully drawn, so no undrawn credit. Cash burn equals the operating loss. The $20M credit line comes due in 15 months.

Q: Is the decline across all stores or in some of them? A: It varies. I will give you results by store group.

Q: Is it the market or Elmstead? A: Regional department store sales have been flat for three years. The decline is specific to Elmstead.

Q: What does it cost to close a store? A: $0.8M per store, after the lease buyout, severance and the sale of remaining inventory. Assume customers of a closed store are lost, with no spillover to other stores.

Two of those answers already shape the case. A flat market means the problem is structural, not cyclical, so waiting will not fix it. And the closing cost means a store closure is a cash expense before it is a saving.

What is a turnaround case interview?

Three signals in the prompt tell you it is a turnaround: the company is losing money, someone mentions cash, a loan or "bankruptcy", and there is a deadline. A profitability case lets you take your time with the diagnosis. A turnaround case adds a clock, so the order of your answer matters as much as its content. It also differs from a restructuring case, which leans toward debt and the balance sheet. This page uses the same four-phase logic in a compact form: runway, diagnose, fix, fund.

Turnaround and restructuring work is the core of firms such as AlixPartners and Alvarez & Marsal. Other cases in the case interview examples collection show the same skills in other settings.

Which turnaround cases can you practice?

These are real library cases where the client is losing money or needs to recover margin. They are different clients from Elmstead, with their own data. Each runs as a voice case with an AI interviewer that shows exhibits when you reach them.

Case (style, industry)	Quant difficulty	Qualitative difficulty	The math you run	Median time
Mustard Clinic (McKinsey, healthcare). 8 (3 with math), 2 exhibits.healthcareQuant difficulty hardQualitative difficulty mediumFewer than 10 runsTry free	hard	medium	Average stay, cost saving, freed capacity	Fewer than 10 runsFewer than 10 runs	Try free
Fruit Drink Turnaround (BCG, consumer packaged goods). 6 (1 with math), 1 exhibit.consumer packaged goodsQuant difficulty easyQualitative difficulty easy12 min· 25 voice runsTry free	easy	easy	Cost per pack gap, driver split	12 min25 voice runs12 min, 25 voice runs	Try free
MetroFresh Distribution Center Operations Turnaround (McKinsey, grocery distribution). 8 (4 with math), 4 exhibits.grocery distributionQuant difficulty easyQualitative difficulty hard23 min· 17 voice runsTry free	easy	hard	Picking capacity gap, EBITDA initiatives	23 min17 voice runs23 min, 17 voice runs	Try free
AuroraWater Bottling Margin Recovery (McKinsey, packaged beverages). 8 (4 with math), 4 exhibits.packaged beveragesQuant difficulty mediumQualitative difficulty medium22 min· 19 voice runsTry free	medium	medium	Unit-cost savings, EBITDA bridge	22 min19 voice runs22 min, 19 voice runs	Try free

Two are adapted from MBA consulting club casebooks; the other two were written for Road to Offer. More are in the case library, 92 cases in all. Every debrief scores seven categories: structure (25% of the score), quantitative analysis (20%), business judgment (15%), and problem understanding, exhibit reading, communication and synthesis (10% each), with feedback on every question. Median times come from completed runs between June 25 and September 22, 2026, and count runs, not people.

What do you calculate first in a turnaround case?

Calculate runway: how many months the company can keep operating before cash falls below the level it needs to function. Use cash on hand plus any undrawn credit, subtract the minimum cash the business must hold (inventory purchases, payroll), and divide by monthly cash burn.

A quick second example, so the formula is automatic. Pinecrest Cinemas, a made-up 14-screen operator, has $9M of cash, a $3M undrawn credit line, a $4M cash floor and a burn of $1.5M a month. Usable cash is $9M + $3M - $4M = $8M, so runway is $8M / $1.5M = 5.3 months. Now add a $4M loan installment due in month 3. By then burn has used $4.5M of the $8M, leaving $3.5M, and the $4M payment leaves the company $0.5M short. The payment, not the burn, sets the deadline, which is why you ask about debt before you start fixing anything.

What is the runway in the Elmstead case?

Burn is the operating loss: $18M / 12 = $1.5M a month. Usable cash is $15M + $0 - $6M = $9M. Runway is $9M / $1.5M = 6 months. Say it out loud and add the implication: "Anything that takes longer than six months to pay back does not help, and the $20M credit line in month 15 will need a refinancing conversation with a credible plan."

How would you structure the Elmstead case?

Keep the structure short and tied to the runway, and say which branch you will open first.

If you want a general profit tree for the diagnose branch, the profitability framework has one. The point of a turnaround structure is that every branch connects back to cash: the fix branch is ranked by speed, and the fund branch checks that you can afford the fixes.

How do you find where Elmstead is losing money?

The interviewer gives you Exhibit A: results by store group. "Four-wall contribution" means gross profit minus the costs of running the store itself (rent, labor, utilities). Gross margin is 34% in every group.

Exhibit B adds headquarters cost: $24.0M a year, made up of $14.4M of people, $6.0M of marketing and $3.6M of other spend (travel, consultants, IT contracts).

Now do the math out loud. Stores contribute +$6M (22 + 2 - 18). Headquarters costs $24M. The chain loses $6M - $24M = -$18M, which matches the prompt. Then make the observation that earns the points: group C loses $18M on its own, the whole chain's loss. Without group C, stores would contribute $24M, exactly covering headquarters. Six stores explain the loss, but headquarters is sized for 25 stores, so even after closing them the chain only reaches break-even, not profit.

Group C's store costs are 70% of its sales ($35M of $50M), against 19% in group A ($29M of $150M). Ask why before you close anything: in this case, the six stores sit in malls that lost their anchor tenants, and traffic is not coming back. If the interviewer had said the weak stores were poorly run rather than badly located, you would test a fix before closing.

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Which fixes go first, quick wins or structural?

Rank every lever by size, one-time cost and time to cash. Quick wins pay in weeks and buy time. Structural fixes pay more but cost cash first. The interviewer provides these estimates when you ask.

The scheduling saving is about 4% of A and B store costs ($2.4M of $61M). The marketing and other cuts are 30% of marketing ($1.8M) and 50% of other spend ($1.8M). The headquarters resize cuts $2.4M, or 17% of people cost. The closing cost is 6 stores x $0.8M = $4.8M.

Add it up. Run-rate savings are 2.4 + 3.6 + 18.0 + 2.4 = $26.4M, so the run-rate result moves from -$18.0M to +$8.4M. One-time costs are 0.5 + 4.8 + 1.2 = $6.5M. Closing group C alone pays back its $4.8M in $4.8M / $1.5M a month = 3.2 months, which is the single most valuable fact in the case.

How does the plan compare with doing nothing?

Always put a do-nothing baseline next to the plan. Doing nothing burns $4.5M a quarter ($1.5M x 3). The plan includes the savings as they ramp up and the one-time costs as they are paid. Assume the quick wins start in month 2, group C closes in two waves of three stores at the start of Q2 and Q3, and the headquarters resize happens at the start of Q4.

Check the plan's Q1: -4.5 burn + 1.0 of quick-win savings (two months at $0.5M) - 0.5 one-time cost = -$4.0M, so cash goes from $15M to $11.0M. Q2 is -4.5 + 1.5 (quick wins) + 2.25 (three stores, $9M a year over a quarter) - 2.4 (closing cost) = -$3.15M, leaving $7.85M. Q3 is -4.5 + 1.5 + 4.5 - 2.4 = -$0.9M, leaving $6.95M. Q4 is -4.5 + 1.5 + 4.5 + 0.6 - 1.2 = +$0.9M, leaving $7.85M.

Two readings matter more than the table. Without action, cash hits the $6M floor at the end of month 6, which matches the runway. With the plan, the low point is $6.95M in Q3, only $0.95M above the floor. Stress it: a one-month slip in the second wave costs $0.75M and leaves $0.2M of headroom, and a two-month slip drops cash to $5.45M, below the floor. That is why the recommendation includes a small cushion from the lender.

Quick wins alone burn $1.0M a month after month 3, so cash falls from $11.0M to the floor in 5 more months, month 8. That is the case for the structural moves: quick wins are necessary and not sufficient. For more on the cost side, see the cost reduction case interview guide and the break-even analysis page.

What is the recommendation?

Finish with the answer first, then the numbers, then risks and next steps. The synthesis should take about a minute. Here is what the interviewer wants to hear.

"I recommend a four-part plan. Elmstead has six months of runway, and group C's six stores lose $18M a year, the entire loss. First, start the quick wins now: scheduling and headquarters spend add $6.0M a year within two months. Second, close the six group C stores in two waves, at a one-time cost of $4.8M, which pays back in 3.2 months and takes the chain to break-even. Third, resize headquarters for 19 stores, which takes run-rate profit to $8.4M. Cash stays above the $6M floor in every quarter, with a low point of $6.95M in Q3. The main risks are a slip in the closures, which would breach the floor after two months, and the $20M credit line due in month 15. At $8.4M of run-rate profit that is 2.4 times profit, so I would open the refinancing conversation with the lender now, bring this plan and ask for a small cushion. Next steps: confirm lease buyout terms for the six stores and test the marketing cut on group A before committing."

Notice what it does: states the answer in the first sentence, uses three numbers, names the thinnest point of the plan and ends with actions. It also says what the plan does not do. The credit line is still $20M, and cash at the end of year one is $7.85M, so the plan buys time and strengthens the refinancing case rather than clearing the debt.

What does a strong turnaround answer look like next to a weak one?

What mistakes sink a turnaround answer?

The same discipline helps in an operations case or a retail case, where the store or site is the unit you diagnose. A good issue tree keeps the diagnosis MECE, and the case interview math practice page builds the speed you need for steps like the quarter-by-quarter cash table.

How do you practice a turnaround case?

Reading a worked case is not the same as running one. Practice in three passes: calculate runway from a prompt without notes, build the lever table with one-time costs and then deliver the recommendation out loud in under a minute. Pick a case from the table above, or start with Voltigo, a different client with its own exhibits. If you want to compare frameworks first, the case interview frameworks guide shows where turnaround fits among the types,.

How we checked the numbers

Elmstead Department Stores and Pinecrest Cinemas are invented for practice, and every figure in them was recomputed on November 7, 2026: the store group totals, the lever table, the quarter-by-quarter cash table and the stress test. The practice cases in the table are real Road to Offer cases; their prompts and data stay inside the product. For the page structure, we compared how Hacking the Case Interview, MBB Prep and CaseBasix present the topic (checked November 2026); the example and its math are our own.