This package prepares for a practice oral case-analysis component associated with Japan's SME Consultant second-stage examination. It uses spoken diagnosis drills, quantified recommendations and follow-up questioning, supported by a 20-question knowledge check that does not simulate the oral assessment. Published schedule information for the 2026 cycle lists a second-stage examination in October across seven regions, but current assessment structure, scoring and whether an oral component is used must be confirmed with J-SMECA. Materials are subject to review against current official guidance. Use this package as a spoken case-analysis workout, not a script. In each drill, state a conclusion, support it with two or three quantified facts, name the key assumption, and close with the next decision or referral. The 20-question knowledge check supports this work but is not an oral simulation.
What this practice component tests
The core practice challenge is whether you can turn a messy business case into a defensible decision under follow-up questioning.
This guide covers a practice oral case-analysis component in Japan's SME consultant second-stage pathway. It is not a first-stage multiple-choice drill. In a spoken case you must extract financially relevant facts, separate symptoms from underlying causes, rank competing issues, form a recommendation, justify it with numbers, and respond when an assumption is challenged. The supporting MCQ bank checks knowledge and application; it does not simulate an oral board.
Published schedule information alone does not establish the current oral format, scoring, or whether an oral element is used in a given year. Confirm the current second-stage structure, eligibility, application details and assessment method with J-SMECA, the designated testing body. Treat this material as subject to review against current official guidance.
A preparation priority order
Prepare in decision order, not topic order: facts, diagnosis, priority, recommendation, follow-up, boundaries.
Start with fact-to-issue mapping, then contribution and cash diagnosis, then prioritization, then recommendation justification, then oral structure and follow-ups. Professional boundaries come last but should be rehearsed because they prevent overreach under pressure.
For every case, build a decision spine: one-sentence conclusion, three evidence points, two assumptions or risks, and one next step. Practise delivering it in six to eight minutes. This transfers better than memorising phrases because the examiner can change one fact and test whether your logic still holds.
From narrative to decision: fact identification
Read for decisions, not for a summary; record each fact with its so-what and the missing information.
Use three columns: fact, financial or strategic implication, missing information. A falling gross margin is a symptom. Frequent discounting, a shift in product mix, or an inventory mismatch may be causes. Flat sales do not prove collapse; they may indicate market maturity, lost share, or a changed customer mix.
Quantify only what changes the decision. Relevant facts often include contribution per unit, fixed cash costs, receivables days, inventory turnover, customer concentration, capacity, and contract timing. If a case says a customer is important but gives no share of sales or contribution, that is a missing fact to state before recommending a discount or a growth push.
Diagnosis with contribution, break-even and cash conversion
Use contribution and cash timing to explain why an accounting profit can coexist with a cash problem.
Worked scenario: sales are ¥100 million, variable costs ¥62 million, fixed cash costs ¥30 million, and depreciation ¥4 million. Contribution is ¥38 million, or 38%. Accounting profit is ¥4 million. Cash before working-capital movements is contribution minus fixed cash costs, or ¥8 million. If receivables rise by ¥6 million and inventory by ¥3 million, operating cash becomes minus ¥1 million. Cash break-even sales are 30 divided by 0.38, about ¥78.9 million; accounting break-even including depreciation is 34 divided by 0.38, about ¥89.5 million. The case is not merely about profit; it is about timing and cash absorption.
Worked scenario: Product A has contribution ¥20 million and avoidable fixed costs ¥12 million, leaving a segment margin of ¥8 million. Product B has contribution ¥14 million and avoidable fixed costs ¥18 million, leaving minus ¥4 million. Shared fixed costs are ¥10 million. B has positive contribution but erodes value after its avoidable fixed costs. Before funding growth, the priority is to fix or exit the value-destroying activity, protect cash, and then reassess. Customer concentration works similarly: if one customer is 45% of sales, a renewal threat must be quantified in contribution and cash terms, not treated as a general reputation risk.
Recommendation logic: justify, sequence and quantify
Recommendations should be conditional, quantified and sequenced cash first.
Price-concession scenario: price is ¥10,000, variable cost ¥6,000, so contribution is ¥4,000. A 10% discount lowers price to ¥9,000 and contribution to ¥3,000. To keep total contribution unchanged at current volume, volume must become 4,000 divided by 3,000, or about 1.333 times current volume—a 33.3% increase. If current volume is 1,000 units and capacity is 1,100, the required volume is about 1,333 units, which is infeasible. The defensible recommendation is not an unconditional discount; it is a conditional package tied to volume commitment, shorter payment terms, or verified cost reduction.
Payback scenario: equipment costs ¥15 million and additional working capital is ¥5 million, so the initial cash commitment is ¥20 million. If annual net cash after added fixed costs is ¥5 million, simple payback on total initial commitment is four years. If working capital is recovered at the end and excluded, payback on equipment alone is three years. State the assumption. Sequence corrective actions cash first: stabilise liquidity, remove cash-destroying commitments, then fund restructuring or growth only when the funding case is quantified.
Answer structure and follow-up under challenge
Answer conclusion-first, then give evidence, assumptions, sensitivity and next action.
A reliable oral pattern is: recommendation; because of two or three quantified reasons; the main assumption and what would change the answer; next step. Do not narrate every calculation. Use the number that carries the decision and say what it means. If the case is incomplete, label the recommendation provisional and name the missing fact.
When challenged, isolate the variable. For example: if the cost estimate is 10% higher, show the revised contribution or payback and identify the threshold at which the recommendation flips. Then name the evidence needed to verify it. This is stronger than defending a precise number or abandoning the analysis. Sensitivity reasoning shows professional judgement under uncertainty.
Professional boundaries and referral
Stay within analysis and advice; refer tax, legal and other licensed determinations appropriately.
A consultant can quantify cash impact, compare options, frame decision criteria and identify questions for advisers. A consultant should not issue a definitive tax filing position, legal interpretation, or regulated professional determination. If a client asks for one, explain the business implication you can assess and refer the matter to a licensed tax or legal professional. Similar discipline applies to insolvency, employment-law disputes, safety obligations, or suspected fraud: identify the issue, protect the decision process, and escalate to the appropriate specialist.
Integrated practice task and self-check rubric
Deliver a timed oral case answer with calculations, conditions and a follow-up response.
Prompt: a machining supplier has sales ¥120 million, variable costs ¥78 million, fixed cash costs ¥32 million, depreciation ¥6 million, receivables ¥25 million, inventory ¥18 million, and cash ¥5 million. One customer provides 45% of sales and asks for an 8% discount on its ¥54 million annual purchases. Capacity is 90% utilised. You have eight minutes.
Prepare: contribution is ¥42 million, or 35%. Cash break-even is 32 divided by 0.35, about ¥91.4 million; accounting break-even including depreciation is 38 divided by 0.35, about ¥108.6 million. Current accounting profit is ¥4 million; cash before working-capital changes is ¥10 million. At current volume the 8% discount on ¥54 million reduces contribution by about ¥4.32 million. That loss must be covered by volume growth, cost reduction or improved payment terms. Because capacity is already 90% utilised, volume growth is constrained. A sound answer recommends no unconditional discount; offer a conditional package, protect cash, and quantify the top-customer dependency before pursuing growth.
Follow-up response: if the top customer leaves, lost sales are 45% of ¥120 million, or ¥54 million; at a 35% contribution ratio, contribution at risk is about ¥18.9 million before any cost removal. State that the actual figure depends on product mix and avoidable costs. Close with the next evidence needed: contract terms, customer profitability, capacity constraints and a 13-week cash plan.
Practice rubric, not an official score: facts and missing data 0–2; calculations and interpretation 0–3; prioritisation and sequencing 0–2; recommendation with conditions 0–3; follow-up, sensitivity and boundaries 0–2. Total 12. A strong answer earns high marks for clear assumptions and decision relevance, not for reciting every figure.
A four-week study sequence
Use short repeated drills and finish with timed, challenged oral answers.
Week 1: practise fact extraction on five short cases. For each, list three decision-relevant facts, two symptoms, one likely cause and two missing facts. Review contribution, break-even, payback, receivables days and inventory turnover relationships.
Week 2: diagnose three cases with segment, customer-concentration and cash-flow issues. Force yourself to rank issues by urgency, financial impact and feasibility. Week 3: write and speak recommendations using price concessions, investment payback and turnaround sequencing. Include one boundary case requiring tax or legal referral.
Week 4: run three timed oral drills of six to eight minutes, each followed by two challenge questions. Use the integrated task and rubric, record key weaknesses, and repeat one case after 48 hours. Check current dates, application windows and second-stage requirements with J-SMECA before relying on any administrative detail.
References and further reading
Use these references to explore the concepts and check the latest information from the relevant organizations.