 Online Tests

# How to pass a numerical reasoning test

Overview

Probably the most popular form of online testing is the numerical reasoning format. It tests candidates ability to consume, digest, and manipulate numbers quickly.

Since the 90s employers have used numerical methods to assess candidates as it is a cost-effective way of reducing the applicant pool to a manageable number. It is also a quick way to gain an indication of whether the candidate has the fundamental skills to be able to do the job.

Many entry level jobs now require a basic level of numerical ability whether it is building spreadsheets or interpreting website traffic, the world is becoming increasingly more data-driven. This is because some of the most successful companies in the world, such as Amazon and Google, have successfully used data to fuel their impressive growth.

Even jobs that are creative at their core are becoming informed by numbers. Graphic designers are creating images with the aim of maximum social media engagement and sales man are tracking the email templates that generate the most replies.

What is included

The focus of each question is to interpret the data presented and then manipulate it in some way. That could be to find a missing data point, convert a number into a different currency or convert the data points into a common measurement.

The good news is that you don’t need anything more than GCSE maths to pass a numerical reasoning test. The maths involved in numerical reasoning is usually constrained to a select few:

• Subtraction

• Multiplication

• Division

• Percentages

• Ratios

All of which can be mastered by themselves with practice but numerical reasoning places as much importance on being able to extract the right information as being able to use it to find the right answer.

The first thing that practice will teach you is that attention to detail is crucial during a numerical reasoning test. That is because there is often a variation in the unit of measurements used in order to catch out applicants. In this scenario, if you don’t convert all the data points into a common unit then you won’t be able to calculate the right answer.

Once you do have the right numbers to work with you must have solid calculation skills. That is to do the right thing with the right numbers. All numerical reasoning tests allow the use of a calculator so as long as you are comfortable adding, subtracting, dividing and multiplying on a calculator you will be able to do the required calculations.

There are a variety of numerical test providers used by employers and the more questions you have practised the better your brain is likely to be at consuming and digesting the information presented. In the case of numerical reasoning tests, practice really does make perfect. The most common providers of online tests are SHL, Kenexa, Cubiks are just a few providers of online tests.

Pay attention to whether the test is negatively marked or not. A test that is negatively marked punishes wrong answers and in this case you are in fact better to only answer the questions where you are sure of the answer. This is because even very able candidates that guess score low on these tests and so you do not need many right answers to beat the average. For example, Oliver Wyman, a top tier consultancy uses a negatively marked test and the pass requirement is not much more than 50% as a result.

The final dimension of the test to be aware of (and probably the most important) is time. All numerical reasoning tests are timed and allow 1-2 minutes per question. Inevitably there will be questions that you get stuck on during a numerical reasoning test and good applicants are disciplined with their time and comfortable moving on when they have spent enough time on a single question. Of course, you will be able to answer some questions faster than average and others you will be slower but keeping an eye on your progress through the test versus the time taken is important. Using 50% of your time on 20% of the questions is inefficient and actually you are better off moving forward and attempting another question, which you may be able to answer quicker.

Example Questions:

1) Which companies employees stock options were the most valuable at series C?

2) Which companies founders stock options were the most valuable at series C?

3) To the nearest 10m how much investment has Nightly AI raised in total?

4) If the current investors in Borrow my Budgie received no new shares at D, how much were they diluted by?

5) By what percentage did the amount raised increase for Borrow my Budgie from series D to E?

As can be seen from the example above there is a variety of information provided and the complexity of the maths required coupled with the allowance of a calculator (usually) means that the variance in performance between candidates on the calculations is minimal. The area where you can significantly improve performance is the understanding of the question as well as the reading and identifying of the relevant information.

Many candidates are not strong mathematically but because they have practiced enough questions prior to taking an online test they are good at interpreting the data. In the example above the common mistakes that candidates make are:

• Misinterpreting the data - questions 1,2 and 4 require the use of the table whilst 3 and 5 only require the graph. Making sure you know where to find the right data for the right question is critical

• Misreading the numbers - whilst all of the valuations are in millions, the total number of shares is different for each company (and is missing from the table)

For question 1 and 2 there is a common set of numbers that you need to calculate in order to answer the question. Both require you to know the total shares of each company and to then multiply a shareholders percentage share by the valuation. It is often the case that workings from a previous question will help you work out another question so it is important to keep your notes clear and well written so that you can revert back to them quickly if needed.

Question 1

Method

Work out the percentage of total shares held by the employees in each company

Borrow my budgie: (1.2m/18m) x £20m = £1.3m

Nightly AI: (13,000/50,000) x £75m = £19.5m

Healthy Brussells: (113,000/778,000) x £32m = £4.64m

Question 2

Method

Work out the percentage of total shares held by the founders in each company

Borrow my budgie: (5.4m/18m) x £20m = £6m

Nightly AI: (10,000/50,000) x £75m = £15m

Healthy Brussells: (400,000/778,000) x £32m = £16.45m

Question 3

Method

Sum the total of each fundraising round for Nightly AI (blue)

5+10+27+35+80 = £157m = £160m to the nearest £10m

Question 4

Method

Calculate the ratio of the value of fundraising amount with the valuation at series C and apply this to the total shares of Borrow my Budgie to calculate the new number of shares issued, then calculate the new percentage share of investors.

£20m fundraise at series E versus £20m valuation at series D is a 1:1 ratio

18 million new shares takes total to 36m. 18/36 = 50% dilution

Question 5

​Method

Using the two fundraising amounts from the bar graph, divide the difference between the series D and series E amounts by the series D amount to find the percentage increase.