It offers a gross estimate based on a few questions which can be helpful for demonstrating that a child has some ability in that area, but the grade equivalents are truly useless. When a 9 yo scores at >18.0 grade, it doesn't mean she needs graduate level math. It doesn't even test that high. Whether a child can do the curriculum at a given school is a different question.
I'd also note that being able to do algebra isn't much of an argument for skipping grades since many kids in 5th grade could do algebra with any exposure. Our school would ask whether the child could test at greater than 90% of the final tests for 5th/6th/7th/8th before thinking about placement in algebra.
