Business Statistics

Class-2
2. DESCRIBING DATA: GRAPHIC PRESENTATION
Graphical Presentation of Data:
In our previous session we have seen that the preliminary examination and interpretation of a set of
data is greatly facilitated by presenting them in tabular form. One very effective and meaningful
form of analysis and interpretation of the tabulated data is the graphical presentation. Presentation of
data through graphs and diagrams is helpful and preferred because:
 Graphical or pictorial presentation of data help in quick understanding of the data;
 Graphs and diagrams are very helpful in clarifying a complex situation;
 In situations where the numbers and magnitudes of data are very large, graphic or pictorial
presentation can make the task easier;
 Graphs and diagrams have greater memorizing effect as the impression created by them lasts much
longer than those created by figures/numbers.
 Graphs and diagrams reveal interesting facts that might not be obvious from the original data;
 Graphs and diagrams elucidate the main features of a set of data.

Basic Principles of Constructing Graphs and Diagrams:

 A graph must have a suitable title. The title should convey the main idea portrayed by the diagram.
The title may be given either at the top or at the bottom of the Chart;
 A graph should be clear and simple as well as self-explanatory. One should be able to grasp the
contents of a graph without reference to the table and text;
 The origin, the vertical and horizontal scales should be so chosen that a graph does not convey
misleading impression about the nature of data;
 The scale showing the values should be in even numbers or in multipliers of five or ten i.e. 25, 50,
75.. or 20, 30, 40, .50.. Odd values like 1, 3, 5, 7. . should be avoided. The scale will however
depend upon the nature of distribution of data;
 Frequency or rate is usually represented on the vertical axis while the variable or the method of
classification on the horizontal;
 In order to clarify certain points about the chart, footnotes may be given at the bottom of the chart;
 A legend illustrating different types of lines or different shades, colors, should be given so that the
reader can easily make out the meaning of the chart;
 A figure number should be given either at the top or at the bottom of a chart.

Types of Graphs and Diagrams:

The following are the main types of graphs and diagrams:

(i) Line Graph (v) Frequency Polygon

(ii) Bar Diagram (vi) Cumulative Frequency Polygon
(iii) Pie Diagram (vii) Scatter Diagram
(iv) Histogram
i. Line Graph:
If we are given the values of a variable at different points of time, the set of values is known as a
time-series. The line diagram is used to best represent time series data. Line diagrams are
particularly effective for business because we can show the change in a variable over time. In line
diagram time is represented along the horizontal axis (x-axis) and the variable such as number of
units sold or the total value of sales is scaled along the vertical axis (y-axis).

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Example:
The following table shows the net sales of ABC Apparels from 1995 through 2000.
Table-1.0
Net sales of ABC Apparels from 1995 to 2000
(Amount in million
Taka)
Year 1995 1996 1997 1998 1999 2000
Net Sales 500 520 490 530 550 575
The above data can be presented by the following line diagram.

Net Sales of ABC Apparels from 1995 to 2000

580
Net Sales in million Taka

560
540
520
500
480
1995 1996 1997 1998 1999 2000

Figure 1.0: Net sales of ABC Apparels from 1995 to 2000

Quite often two or more series of figures are plotted on the same line diagram. Thus one line
diagram can show the trend of several series. This allows for a comparison of several series over a
period.

Exercise:
The following table shows net sales of Elegant Garments during 2000 – 2005. Draw a line diagram.
(Amount in million Taka)
Year 2000 2001 2002 2003 2004 2005
Net sales 400 420 390 440 480 530

ii. Bar Diagram

A bar diagram can be used to depict any of the levels of measurement – nominal, ordinal, interval,
or ratio. These diagrams are very commonly used diagrams and are better for representation of
qualitative, categorical or ranked data. Bars are simply thick vertical lines (bars), where the length of
the lines corresponds to their numerical values. The width of the bar is not important but the width
of the bars should be uniform so as not to create confusion. The bars should be equally spaced.
Following are the basic principles of constructing bar diagrams:
 The width of the bars should be uniform throughout the diagram so as to avoid confusion;
 The bars should be equally spaced;
 Bars may be either horizontal or vertical. However, vertical bars are preferred.
 It is wise to write the respective data labels at the top of the bars;
 The axes of the chart should be clearly labelled;

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  Footnotes or source notes are given at the bottom of the Chart.

Example:
The following table shows the population of some selected countries including Bangladesh in 1998.
Table-2
Population of Selected countries in 1998

Country Bangladesh Egypt Indonesia Iran Pakistan Turkey

Population (million) 113 56 187 61 123 59

The above data can be presented by the following bar diagram.

Population of Selected countries in 1998
200
180
160
140
120
100
80
Population in million
60
40
20
0
sh

ia

an
de

ey
es
t
yp

st
n
la

rk
Ira
do
Eg

ki
ng

Tu
Pa
In

Countries
Ba

Figure: 2.0 Population of selected countries in 1998

Clustered and stacked bar-diagrams:
Example: Construct a clustered and a stacked bar diagram for the three types of expenditures in
Taka of a family during 1995, 1996, 1997 and 1998 as shown below:
Table-3.0
Household Expenditure of a Family
Expenditure(in Taka)
Year Food Housing Others Total
1995 3000 2000 3000 8000
1996 3500 3000 4000 10500
1997 4000 3500 5000 12500
1998 5000 5000 6000 16000
Clustered bar-diagram:

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 Household Expenditure of a f amily

E x p e n d i t u r e ( In T a k a )
18000
16000
14000
12000 Expenditure Food
10000 Expenditure Housing
8000 Expenditure Others
6000 Expenditure Total
4000
2000
0
Years

Figure: 3.0 Year-wise Household Expenditure of a family

The above data can be presented by the following stacked bar diagram also.
Stacked bar-diagram:
E x p e n d itu re (in T a k a )

Hous ehold Expenditure of a family

18000
16000
14000
12000
Series3
10000
Series2
8000
Series1
6000
4000
2000
0
Ye a rs

Figure: 4.0: Year-wise Household Expenditure of a family

iii. Pie Diagram
A pie chart is a circular representation of frequencies with each category getting “its share in the
pie”. This diagram is especially useful for depicting nominal level of data. This type of diagram
enables us to show the partitioning of a total into its component parts. The diagram looks like a pie
and the components resembles slices cut from it. The size of the slice represents the proportion of
the component out of the total. Since the areas of the pie represent the relative shares of each
category, we can quickly compare them.
Example:
The following table shows the division-wise population of Bangladesh according to 1991 Census.
Construct a pie Chart.
Table-4
Division-wise population of Bangladesh in 1991 (in million)
Division Population Angles at the centre
Dhaka 34 (360/112) Χ 34 = 109°
Chittagong 22 (360/112) Χ 22 = 71°
Rajshahi 28 (360/112) Χ 28 = 90°
Khulna 13 (360/112) Χ 13 = 41°
Barisal 8 (360/112) Χ 8 = 26°
Sylhet 7 (360/112) Χ 7 = 23°

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 Division-wise population of Bangladesh in 1991
(million)

Sylhet, 7
Dhaka
Barisal, 8
Dhaka, 34 Chittagong
Khulna, 13
Rajshahi
Khulna
Barisal
Rajshahi, 28 Chittagong, 22
Sylhet

Figure: 5.0: Division-wise Population of Bangladesh, 1

iv. Histogram
It is a two dimensional graphical presentation of data where class intervals are marked along the X-
axis and the frequencies along the Y-axis according to suitable scale. Unlike the bar chart, which is
one dimensional meaning that only the length of the bar is material and not the width, a histogram is
two dimensional in which the length and the width are both important. A histogram is constructed
from a frequency distribution of grouped data, where the height of the rectangle is proportional to the
respective frequency and the width represents the class interval. Each rectangle is with the other and
the blank spaces between the rectangles would mean that the category is empty and there are no
values in that class interval.

Example: Construct a Histogram using the following grouped frequency distribution of the ages of
30 persons:

Class interval Frequency Mid-value

15-25 5 20
25-35 3 30
35-45 7 40
Histogram of Frequecy Distribution of50
45-55 5
55-65 Different age3 Groups 60
65-75 7 70

8
7 7
7

6
Frequency

5 5 15-25
5 25-35
35-45
4
3 3 45-55
3 55-65
65-75
2

0
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 Figure: 6.0: Age Distribution of Selected Group of People

v. Frequency Polygon:
A frequency polygon is a line chart of frequency distribution in which either the values of discrete
variables or the mid-points of class intervals are plotted against the frequencies and these plotted
points are joined together by straight lines. It provides an alternative to a histogram as a way of
graphically presenting a distribution of a continuous variable. The presentation involves presenting
the mid-values on the horizontal axis (x) and the frequencies on the vertical (y) axis. However,
instead of using rectangles, as with histogram, we find the class mid-points on the horizontal axis and
then plot points directly above the class mid-points at a height corresponding to the frequency of the
class.

Since the frequencies do not start at zero or end at zero, frequency polygon as such would not touch
the horizontal 15 25 35 45 55 65 75
axis. However, since the area under the entire curve is the same as that of a histogram which is
100% the curve must be “enclosed”, so that the starting mid-point is joined with a imaginary
preceding mid-point whose value is zero so that the beginning of the curve touches the horizontal
axis and the last mid-point is joined with a imaginary succeeding mid-point, whose value is also
zero, so that the curve will end at the horizontal axis. This enclosed diagram is known as the
frequency polygon.

Example: In the previous example of ages of 30 workers, the frequency polygon is

constructed as follows:
Class interval Frequency (f) Mid-value
15-25 5 20
25-35 3 30
35-45 7 40
45-55 5 50
55-65 3 60
65-75 7 70

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 Fr e q u en c y

7
6

3
2

10 20 30 40 50 60 70 80
Mid-point (X)

b. Cumulative Frequency Curve (Ogive):

The cumulative frequency curve (also known as Ogive) is the graphic representation of a cumulative
frequency distribution. These ogives are of two types. One of these is “less than” and the other is
“more than” ogive. The construction of ogives is shown below:
Example: Let us take our previous example of frequency distribution of ages of 30 workers. The
data is presented again as follows:
Class interval Mid-value Frequency (f) Cum. Freq. (less than) Cum. Freq. (more than)
15-25 20 5 5 30
25-35 30 3 8 25
35-45 40 7 15 22
45-55 50 5 20 15
55-65 60 3 23 10
65-75 70 7 30 7

Ogive (less than):

In this case the “less than” cumulative frequencies are plotted against upper boundaries of their
respective class intervals.

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 “Less than” Cumulative Frequency

“Less than Ogive”

30

25

20

15
10

25 35 45 55 65 75 85
Upper Boundaries of C. I.

Ogive (more than):

In this case the “greater than” cumulative frequencies are plotted against the lower boundaries of
their respective class intervals.

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 More than Cumulative Frequency

“More Than Ogive”

30

25

20

15

10

15 25 35 45 55 65
Lower boundaries of C. I.

These ogives can be used for comparison purposes. Several ogives can be compared on the same
grid, preferably with different colours for easier visualization and differentiation.

Although diagrams and graphs are powerful and effective means for presenting statistical data, they
can only represent a limited amount of information, and they are not of much help when intensive
analysis of the data is required.

EXERCISES
Esercise-1: The following table shows the division-wise population of Bangladesh according to 2001
Census. Construct a pie Chart.
Division-wise population of Bangladesh in 2001
(in million)
Division Population
Dhaka 42
Chittagong 28
Rajshahi 34
Khulna 16
Barisal 14
Sylhet 10

Esercise-2: The following grouped frequency distribution gives the ages of 30 persons:

Class Frequency

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 interval
25-35 5
35-45 3
45-55 7
55-65 5
65-75 3
75-85 7
a. Construct a Histogram
b. Construct a Frequency Polygon
c. Construct a “Less Than” Cumulative Frequency Polygon
d. Construct a “Greater Than” Cumulative Frequency Polygon
e. Construct a “Less Than” Relative Cumulative Frequency Polygon
f. Construct a “Greater Than” Relative Cumulative Frequency Polygon

Further readings:
CHAPTER TWO “Statistical Techniques in BUSINESS AND ECONOMICS” by Douglas A
Lind, William G Marchal and Samuel A Wathen, McGraw - Hill.

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