Financial Reasoning Test

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

  • What are financial reasoning tests?

    Financial reasoning tests are designed to uncover your ability to work through complex financial problems, as well as numerical challenges such as graphs, ratios and percentages.

    The test will be set if you’re applying for a legal role with a heavy financial bias, as it helps employers to see whether you have the right skills for the job.

    Practising financial reasoning tests is the best way to familiarise yourself with the content you’re likely to see on the day, as well as increase your speed at answering questions.

  • Why do employers use financial reasoning tests?

    Employers use aptitude tests such as the financial reasoning test to help them find the best candidate for a specific role. If you’re applying for a finance-based role within the legal sector then it’s likely you’ll take a test such as this.

    As is widely publicised, the job market is getting more and more competitive; aptitude tests allow employers to get a more detailed picture of the large number of people applying for a certain role. And by the same token, the test allows you an additional chance to impress that employer.

    So as always, we recommend practising and preparing beforehand!

  • What is the financial reasoning test format?

    The financial reasoning test is wordeir than a numerical reasoning test; you’ll often have to read through passages of text to pull out the important information you need to answer the question.

    The content is varied - you can expect anything and everything from maths questions on fractions, percentages and ratios, to more specific financial queries about profit margins and financial markets.

    As always, the test will be timed so there’s a fine balance between speed and accuracy. But practising tests beforehand will help you to achieve this.

  • What skills does financial reasoning test?

    Employers in the legal sector will use this test if they’re hiring for a role which will involve in-depth financial knowledge. As well as more specific finance questions, you’ll also have to demonstrate your grasp of standard mathematical skills.

Sample Financial Reasoning Test question Test your knowledge!

Score: /5

Company X has an average of $200,000 in accounts receivable over the year. If it had sales of $1.6 million on terms that are net 30, what is its accounts receivable turnover ratio?

  • 6
  • 8
  • 10
  • 12

If the net profit margin of a company in 2021 was 18% and its net income was $126,000, calculate the revenue of the company for that year.

  • $700,000
  • $718,200
  • $684,000
  • $705,000

A business loan has an annual interest rate of 6%. If the principal amount of the loan is $50,000, what will be the interest amount paid after one year?

  • $2,000
  • $3,000
  • $3,500
  • $4,000

A portfolio manager invested 40% of the funds in bonds, 25% in stocks, and the remaining in a savings account. If the total amount invested was $60,000, how much was invested in the savings account?

  • $18,000
  • $24,000
  • $15,000
  • $21,000

An investor receives a quarterly dividend of $0.45 per share. If the investor owns 3,000 shares of the company, how much total dividend will be received in a year?

  • $5,400
  • $1,350
  • $540
  • $13,500

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Financial Reasoning Test Tips

Get Comfortable with Financial Data

Familiarize yourself with reading and interpreting data from various financial documents, graphs, and tables. It's not just about knowing how to calculate, but understanding the real-life implications of the numbers.

Brush Up on Your Math Skills

Make sure you're up to speed with basic arithmetic, ratios, percentages, and calculations involving interest. These fundamental skills are crucial when you're presented with financial reasoning problems.

Understand the Concepts

Beyond calculations, ensure you understand what financial concepts like averages and interest rates mean in the context of the legal sector. This helps you apply your reasoning more effectively to the questions.

Simulate Testing Conditions

Practice under conditions that mimic the actual test environment. Set time limits for yourself and minimize interruptions to build stamina and concentration for when you take the real test.

Review and Reflect

After practicing, always take the time to review your answers and understand your mistakes. Reflection helps you spot patterns in your errors and improve over time.

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Financial Reasoning Test FAQs

How are financial reasoning tests scored?

The scoring of financial reasoning tests varies from paper to paper, but it’s worth mentioning that in some tests, points are actually deducted for wrong answers.Yet another reason to boost your skills and your confidence by practising as much as you can in the lead up to the test!

What are financial reasoning tests used for?

The test is usually set by employers looking to hire someone, or multiple people, with strong financial and numerical skills. Obviously this is a common test in the financial sector, but many legal firms will also adopt it if needed.

What do financial reasoning tests involve?

The test will cover both maths and finance. So ratios, tables and graphs, as well as profit and loss accounts, balance sheets and margins.

What do financial reasoning tests measure?

You’ll be aware that you’re being tested on your financial knowledge and mathematical skills, but your ability to work quickly and calmly under pressure will also be under scrutiny. All of these skills will be vital in the role you’re applying for.

Where can I practice financial reasoning tests?

You’ll find lots of tests on our website. Practising will help you improve your skills and boost your confidence, and you’ll also pick up helpful tips along the way.

Which employers use financial reasoning tests?

If you’re applying for a legal role and have been asked to take the financial reasoning test it’s a good indicator (if you weren’t already aware!) that the role will require day-to-day financial skills. Reading up on the company and the role in more detail can also help you to prepare.