Understanding business performance

• Common types of visual data representation include:

  • Line graphs
  • Bar charts
  • Pie charts
• What is the gross profit margin?

  A key financial metric indicating the percentage of revenue that exceeds the cost of goods sold
• What does the net profit margin represent?

  The percentage of revenue remaining after all expenses have been deducted from sales
• What is the average rate of return (ARR)?

  A financial metric used to evaluate the profitability of an investment
• What does profit or loss on any individual deal indicate?

  The financial outcome of a specific transaction or agreement
• What is the break-even point?

  The level of sales at which total revenues equal total costs
• What are cash flows?

  The total amount of money being transferred into and out of a business
• What insights can marketing data analysis provide for decision-making?

  • Analysis of sales figures
  • Understanding customer attitudes
  • Insights from secondary or primary sources
• What does market data analysis include?

  • Total market size and changes
  • Market share for different segments
  • Growth or shrinkage of market segments
• How can businesses use market data analysis to make decisions?

  To decide where to invest, enter, or exit the market
• What questions can managers ask using financial data to understand business performance?

  • What are the current trends in market share?
  • What are the current trends in profit?
  • What are the current trends in cash balances?
• What should managers avoid when using financial data?

  Blindly trusting data without understanding its limitations
• Why should managers not assume all data is factual?

  Some data could be based on estimates or guesses
• What does a line graph present?

  Data as lines over time
• Why are line graphs good for data presentation?

  They are good for identifying trends
• What does a bar chart present?

  Data as bars
• What is a bar chart effective for?

  Effective for comparisons
• What does a pie chart show?

  Proportions in a circle
• When is a pie chart suitable to use?

  For displaying market share
• What is an advantage of using a line graph?

  It is useful for showing trends over time.
• Why can line graphs be confusing?

  They can be confusing if too many lines are shown.
• What risk is associated with line graphs regarding future trends?

  They may create an impression of a future trend that might not continue.
• What is an advantage of using a bar chart?

  It is effective for comparing quantities across categories.
• What is a disadvantage of bar charts?

  Small differences may be hard to see.
• Why are bar charts less suitable for showing trends?

  They are less suitable for showing trends over long time periods.
• What is an advantage of using a pie chart?

  It is good for displaying proportions within a whole.
• What is a disadvantage of pie charts?

  They are difficult to interpret with too many segments.
• What limitation do pie charts have regarding time?

  They do not show changes over time.