Financial Reasoning Tests

Financial reasoning tests involve looking at graphs, tables and other numerical problems.

  • What are financial reasoning tests?

    Financial reasoning tests are not too dissimilar to numerical reasoning tests in that they both examine a person’s ability to process numerical information. In this case, the maths questions you’ll answer will also be interspersed with questions more specific to the world of finance.

    It might not be the most common aptitude test you’d expect to face if you’re applying for a role in the armed forces, however it’s a helpful employment tool for any job role that involves an above average amount of finance. Getting to grips with the question format and content is a good idea, so we recommend practising as many financial numerical reasoning tests as you can before the one you’re working towards.

  • What is the financial reasoning test format?

    The format of the test often varies, but you can expect to see questions on everything from basic mathematical principles to more specific financial issues. Often, the questions will be answered only by reading through long passages of text and extracting the information needed to make an informed answer.

    The test format typically consists of multiple-choice questions that focus on financial concepts such as accounting, budgeting, investment, financial statements, and risk management. The questions may range from easy to challenging, and a time limit is usually set to measure the test-taker's ability to work under pressure.

  • What skills do financial reasoning tests assess?

    Financial reasoning tests are designed to assess an individual's ability to work with financial data and make informed decisions. These tests evaluate several skills that are critical in the finance industry. One essential skill that financial reasoning tests assess is the ability to understand and analyze financial statements. Financial statements are critical for decision-making, and the ability to interpret them accurately is crucial for any finance-related position.

    However, all aptitude tests also give an employer the chance to see how well you cope under pressure as they come with challenging time limits in which you need to complete all the questions. The best way to hone your skills is to practise similar tests so you get to grips with the type of questions you’re likely to be asked.

  • What types of questions are on financial reasoning tests?

    Financial reasoning tests are designed to assess an individual's ability to work with financial data and make informed decisions. These tests evaluate several skills that are critical in the finance industry. One essential skill that financial reasoning tests assess is the ability to understand and analyze financial statements. Financial statements are critical for decision-making, and the ability to interpret them accurately is crucial for any finance-related position.

    Another skill that financial reasoning tests assess is the ability to manage financial data and identify trends. This skill involves analyzing financial information, such as revenue and expenses, and identifying areas where costs can be reduced or revenue can be increased. Additionally, the tests assess problem-solving and critical-thinking skills. These skills are vital in finance-related positions, where individuals are required to make quick and informed decisions based on financial data.

  • Why do military organizations use financial reasoning tests in their Recruitment?

    Military organizations use financial reasoning tests in their recruitment process to assess the financial acumen of potential recruits. This is because financial management is critical in the military, where managing resources, budgeting, and making informed financial decisions are essential for mission success.

    Military organizations typically have complex financial systems and require individuals who can work with financial data accurately and efficiently. The financial reasoning test helps to identify individuals who can perform financial analysis, interpret financial statements, and make informed financial decisions. In addition, the test evaluates the ability of potential recruits to work under pressure, which is crucial in the military.

    Furthermore, military organizations are also interested in identifying recruits who can be trained to become effective leaders. Effective leaders in the military must possess strong problem-solving, critical-thinking, and decision-making skills, which are all assessed in the financial reasoning test.

  • How To Prepare and Pass Your Financial Reasoning Test

    Preparing for and passing a financial reasoning test requires practice, knowledge, and confidence. Here are some tips on how to prepare and pass your financial reasoning test:

    1. Review financial concepts

    The first step in preparing for the test is to review financial concepts such as accounting, budgeting, investment, financial statements, and risk management.

    Familiarizing oneself with financial terms and calculations such as profit and loss, cash flow, return on investment, and ratio analysis is crucial.

    2. Practice sample questions

    Practicing sample questions and taking practice tests can help familiarize oneself with the test format and content. Many online resources offer practice tests, and it's essential to find credible sources.

    3. Learn to use a calculator

    If a calculator is allowed during the test, it is essential to become familiar with its functions and features.

    4. Read instructions carefully

    It's essential to read the instructions carefully and understand the requirements of each question.

    5. Eliminate wrong answers

    Eliminate the wrong answers first and then choose the best answer from the remaining options.

Sample Financial Reasoning Tests question Test your knowledge!

Score: /6

If both balls were dropped with the same force at the same time, which would hit the ground first?

  • A
  • B
  • Impossible to tell
  • They'd land at the same time

A weight of 10 kg is attached to a spring, causing the spring to stretch and the weight to drop by 5 cm. If the same spring is subject to a weight of 20 kg, by how much will the weight drop, assuming the spring follows Hooke's law?

  • 5 cm
  • 10 cm
  • 15 cm
  • 20 cm

A gear system consists of two gears. The smaller gear has 10 teeth and the larger gear has 15 teeth. If the smaller gear makes 30 revolutions per minute, how many revolutions per minute does the larger gear make?

  • 20 revolutions per minute
  • 30 revolutions per minute
  • 40 revolutions per minute
  • 45 revolutions per minute

A company has an annual revenue of $2.4 million and a cost of goods sold of $1.8 million. What is the gross profit margin percentage?

  • 25%
  • 33%
  • 75%
  • 60%

If a business took a loan of $50,000 with a 5% annual interest rate, how much interest will have to be paid in addition to the principal amount after a duration of 3 years?

  • $2,500
  • $7,500
  • $10,000
  • $15,000

An investor wants to calculate the future value of an investment worth $4,000 that is expected to grow at an annual interest rate of 7%. If the interest is compounded annually, what will be the investment value after 5 years?

  • $5,600
  • $4,000
  • $5,680
  • $5,750

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Financial Reasoning Tests Tips

Understand the Basics

Make sure you have a good grasp of basic arithmetic, ratios, percentages, averages, and interests as they form the foundation of financial reasoning tests.

Interpret Financial Data

Practice reading and interpreting data from graphs, tables, and texts to quickly analyze financial information.

Time Management

Prioritize your time during the test, ensuring you divide it appropriately to answer all questions without rushing.

Free Practice on Military Aptitude Tests

Take advantage of the free practice tests available here on Military Aptitude Tests to familiarize yourself with the question format and difficulty.

Review and Refine

After each practice test, review your answers to understand where you went well and where there’s room for improvement.

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Financial Reasoning Tests FAQs

What is this test used for?

These tests are utilized by employers in the armed forces sector to gauge a candidate's financial reasoning ability and to determine their aptitude in handling financial tasks.

What do these tests involve?

The Financial Reasoning tests involve assessing one’s ability to process and analyze financial information provided through various means like graphs, tables, and texts using core mathematical operations.

What do these tests measure?

Our Financial Reasoning tests employ advanced technology to constantly evolve, ensuring that we measure your financial aptitude with a reflection of current industry standards.

Where can I practice these tests?

Military Aptitude Tests offers a plethora of practice exams where you can hone your financial reasoning skills, and familiarize yourself with the types of questions employers might ask.

Which employers use these tests?

Numerous hiring managers within the armed forces sector incorporate Financial Reasoning tests as a part of their recruitment process to aid in selecting qualified candidates.