CAT uses a scaled scoring system because the exam is conducted in multiple sessions. First, raw scores are calculated based on correct and incorrect responses. Then, normalization is applied to adjust for differences in difficulty levels across sessions. The scaled score is used to compute the percentile. Percentile indicates the percentage of candidates who scored equal to or less than a particular candidate. For example, a 99 percentile means the candidate scored better than 99% of test-takers. IIMs use both overall percentile and sectional percentile cut-offs during shortlisting.