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ABLE® Financial Appraisal

Target groups: graduates, management, accountancy and business analyst trainees, business consultants, middle managers, finance staff

The ABLE (Aptitude for Business Learning) Series of exercises combines the richness of a work simulation with the objectivity of a psychometric instrument. Ground-breaking contextualised exercises teach and then test, giving a dynamic measurement of the candidate's ability to learn.

Skills measured

Applicants need to demonstrate some of the skills involved in analysing financial information and other business statistics and then apply them to various applications to make preliminary evaluations and decisions.

Qualification required

BPS Test User, Occupational: Ability

What is Financial Appraisal?

The Financial Appraisal test demonstrates methods for analysing and evaluating a range of fictional accounting ratios and other commercial data to enable the candidate to assess the potential risks and returns of applications and to make preliminary recommendations on whether or not to advance funds.

How will candidates be assessed?

The test is set in the context of a venture capital company that makes speculative investments in other companies.

An example task

Candidates are given a fictional company and then asked to make a preliminary evaluation and recommendation for venture capital.

In the guidance booklet the candidate is given a number of factors to consider in the preliminary evaluation, different options of recommendations, other factors to take into account, eg financial cover ratio, cash risk and negative asset risk, in addition to guidance tables. From these different bases of information, and from the details about the company found in the question and answer booklet, the candidate is expected to build up a pattern of knowledge enabling them to analyse and come to a conclusion about the investment risk, return potential and recommendations for the fictional company.

The task is completed when the candidate has indicated, in the separate answer booklet, the result of their evaluation of the investment risk, return potential and recommendations for the company.

What information will be provided

The information provided in the guidance booklet is presented in either a written, tabular or graphical form in the different sections. There are 21 cases in the question and answer booklet and five guidance notes and four special notes within the guidance booklet. Candidates are assessed on their skill in assessing the potential risks and returns associated with each application and making preliminary recommendations on whether or not to advance funds.

No prior knowledge of the mentioned business is required and candidates with knowledge of these sectors will not have an unfair advantage: the test assesses learning, not prior knowledge. A preparation leaflet is available which briefs candidates on what to expect.

What skills will be assessed?

  • Analytical skills in a financial context
  • Comprehension of financial language
  • Ability to discover data relevant to financial decisions
  • Decision-making using financial data
  • Ability to learn and apply new financial ratios and other indicators
  • Concept development (for non-accountants)

What comparison groups are available?

In occupational testing we interpret individuals’ scores by comparing them against samples of applicants, incumbents, etc. The following samples or norm tables are available:

  • Graduate applicants for positions in a multi-national management consultancy
  • Graduate applicants for positions within a regulatory body
  • Graduate applicants for positions within an international banking organisation

What are the business applications?

The test is useful within recruitment and selection or, with a focus on development, to highlight strengths within people and areas which may need attention.

How long does it take to complete?

The test itself is timed and lasts for 45 minutes. Practitioners should allow 15 minutes beforehand to brief the candidate and to account for two practice questions which the candidate is asked to work through before the start of the exercise. A suggested allocation time for one full assessment, including briefing, completion of the timed test and collection of the test would be one hour.

What materials do I need?

For the practitioner:

For the candidate: