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GMAT vs CAT | How to choose the right test?

How do you decide between taking the GMAT vs CAT? Most Indian MBA aspirants face a dilemma in deciding between the GMAT vs CAT in their journey to business school for management education. Both serve as a stepping stone to gaining admission into an MBA program. However, your career goals should factor into the decision making process of determining which test to choose i.e. GMAT v.s. CAT.

In this article, we will focus on:

GMAT vs CAT - how to choose

1.   GMAT vs CAT – Primary Differences in Format and Structure:

Both the GMAT and the CAT serve as an entrance test for admission into some of the most competitive graduate management degree programs. They are both designed to provide a measure of skills such as:

  • Quantitative ability
  • Reasoning skills
  • Data Interpretation

However, there are quite a few fundamental differences between these exams. We will discuss the differences under the following heads:

  1. Format and duration
  2. Score validity
  3. Eligibility and attempts
  4. Exam fees and average salaries
  5. Relative Difficulty

Format and Duration:

The CAT consists of 3 sections, whereas the GMAT has 4 sections which include an analytical writing assessment. Though both the GMAT and the CAT are computer-based tests, the GMAT is adaptive in nature whereas the CAT isn’t. This means that the difficulty level of the next question is decided based on your performance in the previous question.

The CAT lasts for 3 hours while the GMAT lasts for 3 hours and 7 minutes.

The GMAT is delivered on demand around the year via Pearson Vue testing facilities at 39 centers in 34 cities across India. Read our other article to know more about GMAT Test centers and the testing environment.

The CAT is conducted by one of the 6 oldest IIMs in a rotational fashion. The dates of the test are announced by the convening IIM in either July or August of every year.

Score Validity:

Your GMAT score is valid for 5 years from the date of your test. This is because GMAC (the organization that conducts the GMAT) believes your reasoning skills and abilities would not erode substantially over a 5-year period. However, business schools may have their own policies with regards to the score that they accept. Make sure you check with your target school before you apply.

On the other hand, CAT scores are valid for just 1 year from the date of the test. Also, if you are not able to score well in an attempt, you would have to wait for a year to take it again. This is not the case with the GMAT as it can be taken on demand. The opportunity cost of waiting for a year would be a consideration for a lot of candidates.

Eligibility and Attempts:

Anyone over 18 years of age can take the GMAT. If you’re below the age of 18 i.e. 13-17 years of age, then, with parental permission you can take the GMAT. You can take the GMAT up to 5 times in a year. The minimum duration between any attempt should be at least 16 days. There is an 8-attempt overall lifetime limit.

The CAT can be taken only once every year on a date specified by the convening IIM. The dates on which the CAT will be conducted is announced by the convening IIM in July or August of every year. There is no restriction on the number of attempts you can take the CAT and no upper age limit. However, to attempt the CAT you need to have a bachelor’s degree from a recognized institution or its equivalent. Students in the final year of their respective degree programs can also appear and take the CAT.

Thus, the GMAT due to its on-demand nature and opportunity for score improvement and scheduling flexibility is the better option.

Exam Fees and Average Salaries:

It costs $250 (INR 17500/-) to take the GMAT. You can schedule and book an appointment after creating and registering an account on mba.com.

The registration and test fee for CAT 2018 is INR  1900/-. The convening IIM releases a notification generally in the months of July or August. The details related to the dates of registration, exam fees, and other information are included in this notification. Since the CAT is not administered on demand you have to be careful about the deadlines for registration. Here is the link to the notification of CAT 2018.

The average salary offered to IIM graduates of the Top -10 IIMs is between the range of INR 22-25 lakhs The highest international offer made to an IIM graduate stands at INR 82 lakhs. Whereas, the average salary offered to graduates of the top 25 MBA programs globally are significantly higher ~ INR 1.05 Crore.

In the following table, we summarize the key difference between the GMAT v.s. CAT.

Parameter GMAT CAT
Sections 4 Sections

·         Quantitative reasoning (QR)

·         Verbal reasoning (VR)

·         Analytical writing (AWA)

·         Integrated Reasoning (IR)

3 Sections

·         Verbal ability and reading comprehension (VARC)

·         Data Interpretation and logical reasoning (DILR)

·         Quantitative Ability (QA)

No. of Questions/ Time limit 80 Questions in total

·         QR – 31 Questions / 62 Minutes

·         VR – 36 Questions / 65 Minutes

·         IR – 12 Questions / 30 Minutes

·         AWA – 1 Question / 30 Minutes

100 Questions in total

·         VARC – 34 Questions / 60 minutes

·         DILR – 32 Questions / 60 minutes

·         QA – 34 Questions / 60 minutes

Test Duration 3 Hours and 7 Minutes 3 Hours
Adaptiveness Question adaptive Not adaptive
Score reporting Absolute score (Out of 800) and percentile score reported Only Percentile score reported
Score Validity 5 Years 1 Year
Scheduling Flexibility Delivered on demand, can be taken up to 5 times a year. With at least 16 days between attempts. Conducted only once a year.
Test Fee $ 250 (approx INR 17,000) INR 1900
Eligibility ·         Lower age limit – 13 years

·         Upper age limit – None

·         No lower age limit but bachelor’s degree from a recognized university or equal qualification required.

·         No upper age limit

Number of Attempts ·         Maximum 5 attempts in a year (Minimum 16 days between consecutive attempts)

· Lifetime Limit of 8 attempts overall

·         Can be attempted only once every year.

·         No limit on the number of attempts.

Acceptance · 7000+ programs

· Accepted by business schools in 110 countries [1]

·         20 IIMs

·         Other management colleges in India (SPJIMR, FMS, MDI, IMT, IIFT)

·         Accepted for admission in India only

GMAT vs CAT – Comparison of relative difficulty

The GMAT has a very well defined syllabus and question types, thus it is easier to prepare for than the CAT. It is possible to score 700+ on the GMAT with 90 – 120 hours of dedicated preparation. On the other hand the CAT syllabus is not very well defined and thus more preparation time is required as compared to the GMAT. The verbal section of the GMAT generally poses a greater challenge for Indian test takers who are non-native English speakers as compared to the CAT. The Quantitative section of the CAT is relatively more difficult than the GMAT.

2. What is tested in each of these exams?

Adaptive vs. non-adaptive

Difference between adaptive nature of GMAT vs CAT

The GMAT is an adaptive test. This means that the difficulty level of your next question depends on your performance in the previous question. Thus, the GMAT is a test of ability as it constantly adapts and refines the test to your ability level. The test starts off with a question of medium difficulty, if you answer this question correctly, the next question is of a slightly higher difficulty level. Hence, there is no option to review your answers or skip a question.

Let us understand this better with the help of an example of 2 students taking the GMAT:GMAT Ability Student 1

Student 1:

This student starts with a question of medium difficulty. After answering this question correctly, the student receives a question of a higher difficulty level. Once the student answers this question correctly the next question is of slightly higher difficulty. The performance of this student can be plotted on a graph as shown above.

GMAT Ability Student 2Student 2:

This student starts in a similar way to student 2. However, the student incorrectly answers the first few questions presented to him.

Analysis and takeaways

Now, since student 1 answers initial questions and quite a few of the proceeding questions correctly, the GMAT testing algorithm rightly judges this candidate to have a higher ability as he has correctly answered questions of higher difficulty. This is reflected in this student’s higher GMAT score.

However, since student 2 answers the initial few questions incorrectly, the algorithm does not present him questions of a higher difficulty level. Thus, this student is judged to have a lower ability and hence a lower GMAT score. even though the student may have answered more questions correctly overall.

The conclusion here is that the GMAT is a test of ability rather than accuracy.

Learn more about how the Computer Adaptive GMAT works in this article.

CAT, on the other hand, is a non-adaptive test and focuses on accuracy rather than ability. Since in the CAT only percentile scores are reported, your score depends solely on how many questions you answered correctly. You can review your answers in a section before submission. Also, an on-screen calculator is provided. There is negative marking for wrong answers.

3. What factors to consider in choosing GMAT vs CAT?

In deciding which test to take between GMAT vs CAT, you should take the following factors into consideration:

  1. Career Goals
  2. Choice of Program
  3. Location Preferences
  4. Investment vs Return

Career Goals:

Besides the 20 IIMs, more than 100 other B-schools all over India accept CAT scores for admission into graduate management programs. A few international business schools also accept CAT scores for admission into management programs. Some of the international schools that accept CAT scores are:

Sr No School/University Program Location
1 SP Jain Institute of Management MBA Sydney/Dubai/Singapore
2 SKEMA Business School MiM France
3 Singapore Management University MiM Singapore

The GMAT is accepted for admission into graduate management programs at more than 7000 programs across 2,300+ graduate business schools worldwide. Some of the world’s top-ranked business schools accept GMAT scores for admission into their graduate management programs such as:

  • Harvard Business School
  • MIT Sloan School of Management
  • Stanford Graduate School of Business
  • INSEAD

If your career goal is to study abroad and gain valuable international exposure and work experience, then the GMAT is the obvious choice because of its wider acceptance globally. The GMAT is further gaining acceptance as an admission criterion for Executive programs at some of the top Indian B-schools.

140+ Indian Business Schools are now accepting GMAT Scores for admission into management programs, including IIMs for their Executive programs. Learn more about the scope of GMAT in India.

On the contrary, if your primary goal is to live and work in India at some of the best domestic as well as global employers, then the CAT is the preferred choice.

Choice of Program:

Depending on your target B-school and its program admission requirements, you may need to take either the GMAT or CAT.

E.g., If your target program is the regular 2-year, full-time residential MBA program at any IIM then you must have a valid CAT score. However, if you are considering the 1-year full-time executive program (EPGP/PGPEx) then a valid GMAT score is accepted.

Also, since the IIMs conduct the CAT, it is a better predictor of success in the programs they offer, as it tests for the skills that are required to succeed in the program.

Note: If you are an international or overseas student, your GMAT score is considered for admission into some of the top programs at Indian B-schools.

E.g., If you want to study at ISB, then a GMAT score is necessary as it is the only accepted test score besides the GRE.

Location Preference

If you have decided to study in a particular geographical location, due to the proximity of employers in your target industry; then this is a factor you should consider in deciding which test to take between GMAT or CAT.

E.g., If you are looking for a role in luxury management, for which the best employers are in France. It would be best to pursue an MBA from a B-school around that area as this would place you in close proximity with your target employers and open up opportunities for internships as well.

Investment vs Return (GMAT vs. CAT)

In the table below is a breakdown of the costs involved if you’re considering taking either test:

Sr No Expense GMAT CAT
1 Test Fee $250 $ 30 (Approx.)
2 Preparation Cost $299 (e-GMAT course) $ 430 (Average Cost of CAT coaching in classroom programs)
3 Cost of rescheduling $ 80 (7 days or more before scheduled date) Conducted only once a year (rescheduling not possible)
4 Score reporting $35 each (First 5 reports are free) Reported to all IIMs free of cost.
5 Enhanced score report $30 Not available
6 Score Validity 5 Years 1 Year
Total Cost $ 834 $ 460
Total cost per year $ 167 $ 460

In the cost comparison shown above, we have considered the USD to INR conversion rate as (1 USD = 70 INR) and the average preparation cost of one of the most popular classroom coaching available for the CAT.

Few key points to note are:

  • Since the CAT is conducted only once a year, if you do not make the cut-off for your target college/program your only option is to wait another year to take it again, whereas the GMAT can be taken multiple times with a minimum of 16 days between attempts.
  • Thus, the opportunity cost is quite higher in the case of the CAT. On the other hand, since you can take the GMAT multiple times, with better preparation and strategy you can improve your score and your profile to suit your target program better.
  • The GMAT Enhanced Score Report (ESR) offered at an additional cost, could provide valuable insights into your performance. Developing your retake strategy based on your ESR analysis could be of immense benefit. No such facility is available for the CAT.
  • Also, since your GMAT score is valid for five years from the date of your test, the actual cost for the GMAT comes down to $167/year.

Graduates of the top 25 business schools in the US earn greater than $ 150,000 in starting salaries. With graduates of the top 10 schools making more than $ 200,000 a year. In contrast to this, the highest international offer made to an IIM-A student in 2017 was INR 82 Lakhs ($ 117,000).

Thus, the key takeaway here is, that a good GMAT score consistently gives better ROI than the CAT.

Scholarships – The added advantage of GMAT over CAT

A good GMAT score helps not only in getting into a top business school, but it also increases the chances of securing a partial scholarship or a full fellowship. These can help immensely with the cost of doing an MBA.

To offset the increase in the cost of an MBA, top business schools are increasingly offering scholarships, fellowships and other forms of financial aid. Harvard Business School offered some form of financial aid to 50% of its incoming class.

Scholarships offered by programs to business school students crossed $ 230 Million in 2017.

Read our article on scholarships and GMAT score, to learn more about how to secure a scholarship at a top Business school.

Scholarships based on CAT score:

While some form of need-based financial assistance is offered at most IIMs, they are in the form of loans rather than scholarships.

Scholarships offered by companies and private entities are also available to students.

An exhaustive list of scholarships available can be found here.

More information about the scholarships available at each institution can be found on the institution website.

Takeaways – How to choose between GMAT vs CAT?

The following criteria should help you in deciding GMAT v.s. CAT

  • Decide on your career goals (International Exposure and Work Opportunities vs. Domestic)
  • Choice of Program (Executive, Full-time 1 year, Full Time 2 years)
  • Location Preference (India v.s. Abroad)
  • Investment vs. Return (GMAT v.s. CAT)
  • Scholarship Opportunities (GMAT vs CAT)

In conclusion, the GMAT with its wider worldwide acceptance, lower opportunity cost and greater return on investment along with its increasing acceptance to executive MBA programs at IIMs and a few other Indian B-schools stands out as the better option between GMAT vs CAT. However, if you are aiming for admission into the traditional 2 year MBA program at IIMs or other business schools in India such as MDI or SPJIMR, then the CAT maybe your only choice.

We hope this article provides you with the information to decide between the GMAT and CAT. Please write to us with your questions at acethegmat@e-gmat.com.

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