Financial reasoning tests are actually numerical reasoning tests that present basic financial concepts through texts, tables, and graphs. Instead of receiving only a set of charts or tables that contain information required for answering the question, financial oriented tests include a short description of a scenario, accompanied by extracts of numerical data.

The mathematical basis for these tests is simple arithmetic: the four basic operations (+,-,÷,×), percentages, ratios, interests and averages. The time frames for these tests usually exceed those of standard numerical tests, since they introduce more textual information which is critical for understanding the question.

## Prepare For Your Financial Reasoning Assessments

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## The Difficulties of Financial Reasoning

Financial reasoning tests are considered more difficult than ordinary numerical tests for many reasons:

• Unlike standard numerical tests, data is presented both verbally and numerically. Passages of 150-220 words are likely to accompany each set of questions which demands an ability to discern, filter and extract relevant information.
• These tests introduce financial definitions and concepts that most people are not acquainted with. Terms like profit margin or market capitalization, which are universal conventions in the finance world, might turn a question to be seemingly more complex, regardless of how simple their mathematical representation is.
• Unlike numerical reasoning tests whose questions usually require no more than 3-5 mathematical calculations and rely on universal concepts, financial reasoning tests can ask for more elaborate calculations and application of newly introduced mathematical expressions.
• Psychology of course plays an important role in this test. Employers want to see if a person can draw conclusions and assumptions using pure logic even when he is not fully familiar with a specific field of knowledge.
• The scoring method of this test is also different. Wrong answers reduce points, while a 'new answer' choice allows the test taker to state that he does not know the answer.

## Relevant Companies

The type of companies who are likely to carry out this kind of assessment include mainly financial institutions, such as banks or firms of accountants and insurance companies.

At JobTestPrep we have included articles on many of these kind of companies who may use a Financial Reasoning test as part of their assessment. These organisations include:

## Practice Financial Reasoning Questions

While our testing teams are working on revamping our financial reasoning practice pack, you can try solve these challenge questions and post your answers below. Correct answers will entitle 15% off our product, once aired.JobTestPrep is proud to be the first institute that provides a complete financial reasoning practice test, tailored for the top finance sector, accompanied by our advanced numerical reasoning tests.

### Question 1

4 different companies competing over a single product have recently changed retail prices in order to increase their profits.

Company Retail Price Change Market Share Before Change Market Share After Change
A 20% increase 20% 30%
B 9% decrease 5% 9%
C 12% increase 30% 28%
D 19% increase 15% 33%

Assuming that the product's initial price was equal for all companies, which company experienced the greatest increase in revenues?

### Question 2

A company has set itself a goal to reach a 40% increase in monthly revenues. In order to do so, the company reduced the price of its product by 25%. What net increase in sales is needed in order to reach the desired goal?

BigMart is a British supermarket chain which retails food, clothing and general merchandise. As part of BigMart's efforts to reduce operational costs, it was decided to integrate self-checkout cashier systems, operated directly by the customers, allowing only credit card payments. With this change, for every three self-checkout posts only one human cashier would be required, functioning as backup in case of problems occurring during the automated process. Nevertheless, an automatic work station is expected to work slower than a station operated by a skillful cashier. Therefore, it was initially agreed that 50% of the work stations would remain human operated, while two automatic stations would replace each human operated station removed. Additionally, surveillance cameras would be required to prevent product theft attempts by customers.

Before deciding the ratio between human and automatized work stations, BigMart tried a variety of automatization percentages, each in one of 6 branches. Could it have been possible for BigMart to choose a better automatization rate, and by how much would it differ from the one chosen?

 Branch B 1 B 2 B 3 B 4 B 5 B 6 Automatization percentage rate 33 25 80 75 50 66 Net profit before pilot* 2M 1.9M 1.5M 2.1M 1.9M 2.3M Net profit thourghout pilot* 2.1M 1.8M 1.7M 2.4M 2.1M 2.6M

*quarterly, £

## What's Included

• 18 numerical and financial reasoning practice tests
• A drill for basic financial concepts
• 7 additional drills covering basic maths topics and currency exchange
• 2 PDF study guides
• 11 video tutorials which accompany these drills
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