In a loan agreement, a financial test might require the borrower to maintain a certain debt-to-equity ratio. If the borrower's financial reports indicate compliance with this ratio, the test is passed. Alternatively, in technical analysis, if a stock price approaches a previously established low (support level) and does not fall below it, the price movement is said to have 'passed the test,' suggesting that the support level is strong.
The company's quarterly financials are due next week, and we'll see if they pass the leverage ratio test set by our creditors.
