If you ever browsed psychometric tests you most certainly came across numeric reasoning tests. They are often used in the body of general IQ tests where you need to complete sequences or solve a problem using basic arithmetic’s. Financial reasoning tests are very similar to numeric reasoning tests with the only difference: they feature more detailed financial situations. Solving financial reasoning tests requires specific knowledge and skills; therefore, it’s very unlikely you will have to solve this type of test unless understanding finances is a part of your job description.
Just like mechanical reasoning tests, financial reasoning tests are aimed at assessing potential workers whose responsibilities are tied to a certain field. Such examination is highly popular among employers looking for a person to fill the vacancy of a financial analytic, director or other executive position in fields of banking, business consulting, credit financing, etc. If this rings a bell with you, what follows is the detailed description of financial reasoning tests so you could get ready to pass them successfully.
How Do Financial Reasoning Tests Look?
The financial and economic concepts are a foundation of such tests. On top of that, financial reasoning tests require you to have some basic arithmetic’s skills. The majority of the questions look like passages of text describing a problem. For instance, financial reasoning tasks can describe a potential financial issue that may occur in a company or prompt you to calculate profit summaries for a reported period. Prepare to see some spreadsheets, tables, and graphs as a part of problem description. For most employers, testing the candidates with such tasks will serve as proof of their ability to handle the day-to-day work with data presented in the format of charts and the like. The textual description always includes business or economics terminology. Therefore, it’s crucial that your vocabulary includes such notions so that seeing them on the test doesn’t stall you during the assessment. Usually, the textual description will be transparent enough for you to understand the topic of the problem. However, in some cases, your task will also be to spot a small piece of data crucial to finding a solution.
What Do Financial Reasoning Tests Measure?
Financial reasoning tests measure versatile parts of the personal profile of a potential employee whose work routine will be closely related to financial management. Since financial reasoning is the variation of numerical reasoning tests, the first thing it measures is your mathematical skills. Yet, unlike numerical reasoning tests, financial reasoning tests don’t require advanced calculus skills. Almost all the math within these assessments is elementary, featuring addition, subtraction, multiplication, division (+, - ,× , ÷), and percentages (%). Also, financial reasoning tests measure how good you are with financial and economical operations and money management. Through versatile graphs, charts, and descriptive tasks financial reasoning tests can evaluate your abilities in revenue calculation, market analysis, and decision-making based on given economic or financial data. These tests will also serve as a testament to your knowledge of business and industry terminology such as profit margin or market capitalization. Besides, such tasks will quickly reveal if you are skilled enough for a role you’re applying for since you will also need to employ this vocabulary to express your opinion to complete the test.
Tips For Passing Financial Reasoning Tests
The majority of tasks in financial reasoning tests look like dense text passages so you will be provided with more time for such an assessment than for any other test. Yet it doesn’t mean that you will have some additional time for thinking, therefore don’t get stuck on one question. Read every description carefully, often situations are over-described to trick a test-taker, so it’s crucial to be able to spot only essential data regarding the question. In addition, even if the math you need to employ is very simple the description might be hard to get through at a first sight.
Remember that financial reasoning tests have a unique scoring system, too. In spite of the incorrect answer, your thinking logic might give you some bonus points since an employer might see that you have a deep understanding of the industry and its processes.