SUBJECT - BUSINESS MATHEMATICS & STATISTICS

Business Mathematics & Statistics– Syllabus Overview By Sumit Jain

Unit Session Topic / Sub-topic Description Unit Session Topic / Sub-topic Description
Business Statistics – Central Tendency & Dispersion
Business Mathematics
• Measure Of Central Tendency – Mean, Median,
 Ratio & Proportion
 Percentage
Mode, Partition Values
I
 Profit & Loss III
• Measures Of Dispersion: Range, Quartile
 Commission & Discount Deviation, Mean Deviation, Standard
 Simple Interest Deviation and Coefficient of Variation,
 Compound Interest Variance

Business Statistics - Introduction Business Statistics : Probability

 Introduction: Statistics as a Subject, Functions,  Introduction to Probability, Experiment, Event,

Importance and Limitation of Statistics Compound Event, Independent and Dependent Events,
IV
 Types of Data: Primary Data & Secondary Data; Mutually Exclusive Events, Equally Likely Events.

II Qualitative and Quantitative Data  Addition theorem and multiplication theorem

 Presentation of data: Construction of a table and  Inverse Probability: Bayes Theorem
the different components of a table. Business Statistics : Probability Distribution
 Diagrammatic Presentation of data: Line diagrams, , V
• Probability distribution (Binomial and Poisson)
Bar diagrams, Pie charts, Histogram and Ogives. • Probability distribution (Normal)
WHAT IS STATISTICS?

Statistics is the study of the collection, organization, analysis, interpretation and presentation of data. It is built up from the
field of mathematics known as probability. Probability gives us a way to determine how likely an event is to occur. It also
gives us a way to talk about randomness.
It can be used in every field of scientific research, such as psychology, economics, medicine, advertising, demography and
many more. Statistical course will teach students on the basic concepts of logic, mathematics, statistical reasoning, analyse
data, evaluate data and research methods.

THE POWER OF DATA

Data is all around us. The number of people in a country, sales figures of an organization, and the number of hits on a
website are data that lets a business or a nation make informed decisions.
.

The field of statistics is all about learning from data. It is the process of converting raw data into a meaningful, organized,
and informative form. Statistical knowledge is the basis on which proper methods of collecting data, employing the right
analysis, and effectively presenting the results are built. The discoveries in science and many predictions are all based on
statistical methods. If you want to understand a subject deeply, you need to get into the statistics of it all.
CAREER OPPORTUNITIES:
One can find a career in statistical profession by doing activities such as solving problems in a wide variety of fields
and apply mathematical and statistical knowledge to social, economic problems. Careers that incorporate statistics
can be found in a wide variety of disciplines. Here are a few examples of fields which use statistics, i.e agriculture,
business, industry, computer science, health sciences, government, private, scientific and other disciplines. These
candidates can also apply for the Indian Statistical Services, Civil Services and Indian Economic Services exams.
What are the job roles: Top Colleges/Universities in India Offering Statistics Course:

• Statistician • Indian Statistical Institute, Banglore

• Indian Statistical Institute, Delhi
• Lecturer • St. Xavier’s College, Mumbai
• Loyala College, Chennai
• Professor
• Indian Statistical Institute, Calcutta
• Content Analyst
Top Colleges/Universities in abroad Offering Statistics Course:
• Statistic Trainer
• Stanford University
• Data Scientist
• University of Oxford
• Consultant • Harvard University
• University of California, Berkeley
• Biostatistician • University College, London
Statistics : Scope/Importance, Functions and Limitation
 Scope or Importance of Statistics

Statistics is indispensable in this modern age aptly termed as "the age of planning". The governments of most
countries around the world are constantly researching to improve its economic development. Statistical data and

techniques of statistical analysis are immensely useful in solving economical problems such as wages, price, time series

analysis, demand analysis. It is an irreplaceable tool of production control. Business executives are relying more and

more on statistical techniques for studying the preference of the customers.

Industry statistics are widely used in equality control. In production, engineering, statistical tools such as inspection

plan, control chart etc. are extensively used to find out whether the product is confirming to the specifications or not.

Statistics are useful to banker, insurance companies, social workers, labour unions, trade associations, chambers and to

the politicians.
Economics - An economic policy can have no sure basis unless it is framed on an analysis

of the facts of economic-life and a study of the results of economic action. Statistics

furnishes method of measuring and analysing the given phenomena and can trace the

effect of economic action. In this manner statistics help in framing of economic policy.

Economics, Mathematics, and Statistics have in recent years got so much inter woven

that a new science by the name of Econometrics has now been evolved with the object

of harnessing the three sciences to the study of given phenomena.

Administration - No statesman can tender sound advice on a problem to his government

unless he has adequate statistical data before him to base his judgment upon. Crime,

drug addiction, illiteracy, and similar problems need statistical investigation to suggest

remedies for their cure. Likewise, for making a budget of the state, which is a necessity

every year, lots of statistical data is needed and various statistical methods are employed

to frame the budget. The statistics works as a tool to aid administration.

Business and Commerce - Business, indeed, runs on estimates and probabilities. higher

the degree of accuracy of a businessman's estimates, the greater are the chances of

achieving success in his business. Statistics can be profitably employed in measuring

commercial activity. The accounts of a concern undoubtedly show its financial position,

but they alone cannot correctly indicate business activity. Statistical averages or indices

are, therefore, computed for drawing reliable conclusions. Statistics help the launching of

new projects and exploitation of potential markets. In a word, statistics are the life-blood

of successful commerce.
Accounting and Auditing - An accountant uses various statistical techniques to do his task

efficiently. For example, for budgeting and cost control, techniques of time series,

regression, and co-relation are very useful. An auditor by making use of past profit

averages and computing its deviation from the present profit of an organisation may draw

important conclusions. Again sampling techniques help in choosing the most

representative data which may help an auditor to make an effective sample check.

Likewise, various techniques of statistics may assist in doing accounting and auditing

more effectively in lesser time.

Industrial Management - Industrial management makes vast use of statistical data and

methods. To quote a few instances, for making time and motion studies to reduce time

and fatigue of a workman in an industrial activity, for quality control purposes, to conform

whether the product is meeting engineering specifications, and to choose most

representative sample to carry out effective inspection of the products, etc.

Statistics and other sciences - While studying various sciences like Astronomy.

Meteorology. Physics, Geology, Zoology, etc., with whatever care and caution, the

observations are measured, they cannot always be mathematically correct. Thus a need

arises to compute the most probable estimate measurement, about which all the

measurements are grouped in accordance with some definite law. The next task is to

watch the nature and direction of the changes in the type or grouping the measurements

about it. Upon such statistical studies are based several generalizations and theories of

these sciences.
 Functions of Statistics
To Present Facts in Definite Form:
We can represent the things in their true form with the help of figures. Without a statistical study, our ideas would be
vague and indefinite.
The facts are to be given in a definite form. If the results are given in numbers, then they are more convincing than if the
results are expressed on the basis of quality.
The statements like, there is lot of unemployment in India or population is increasing at a faster rate are not in the definite
form. The statements should be in definite form like the population in 2004 would be 15% more as compared to 1990.

Precision to the Facts:

The statistics are presented in a definite form so they also help in condensing the data into important figures. So statistical
methods present meaningful information. In other words statistics helps in simplifying complex data to simple-to make
them understandable.
The data may be presented in the form of a graph, diagram or through an average, or coefficients etc. For example, we
cannot know the price position from individual prices of all goods, but we can know it, if we get the index of general level
of prices.
Comparisons:

After simplifying the data, it can be correlated as well as compared. The relationship between the two groups is

best represented by certain mathematical quantities like average or coefficients etc. Comparison is one of the

main functions of statistics as the absolute figures convey a very less meaning.

Formulation and Testing of Hypothesis:

These statistical methods help us in formulating and testing the hypothesis or a new theory. With the help of

statistical techniques, we can know the effect of imposing tax on the exports of tea on the consumption of tea

in other countries. The other example could be to study whether credit squeeze is effective in checking

inflation or not.
Forecasting:

Statistics is not only concerned with the above functions, but it also predicts the future course of action of the

phenomena. We can make future policies on the basis of estimates made with the help of Statistics. We can

predict the demand for goods in 2005 if we know the population in 2004 on the basis of growth rate of

population in past. Similarly a businessman can exploit the market situation in a successful manner if he knows

about the trends in the market. The statistics help in shaping future policies.

Policy Making:

With help of statistics we can frame favourable policies. How much food is required to be imported in 2007? It

depends on the food-production in 2007 and the demand for food in 2007. Without knowing these factors we

cannot estimate the amount of imports. On the basis of forecast the government forms the policies about food

grains, housing etc. But if the forecasting is not correct, then the whole set up will be affected.
It Enlarges Knowledge:

Whipple rightly remarks that “Statistics enables one to enlarge his horizon”. So when a person goes through

various procedures of statistics, it widens his knowledge pattern. It also widens his thinking and reasoning

power. It also helps him to reach to a rational conclusion.

To Measure Uncertainty:

Future is uncertain, but statistics help the various authorities in all the phenomenon of the world to make

correct estimation by taking and analyzing the various data of the part. So the uncertainty could be decreased.

As we have to make a forecast we have also to create trend behaviors of the past, for which we use techniques

like regression, interpolation and time series analysis.

 Limitations of Statistics

Statistics does not suit to the study of qualitative phenomenon - Qualitative phenomenon like honesty,
poverty, culture, etc., which cannot be expressed numerically are not capable of statistical analysis.
However, qualitative inferences can be drawn by studying the quantitative data. For example, by
comparing the per capita income of the people of two countries, inferences can be drawn as to their
standard of living.

Statistics does not study Individuals – Statistics deals with mass objects and does not give any specific
recognition to the individual terms. For example, per capita income of a country is summation of its
individual incomes divided by the total number of its inhabitants. Individual incomes may differ widely
from poor to rich but average per capita income is same for the whole population.
Statistical laws are not exact - Statistical inferences are not exact, rather they are suggestive of
the relevant state of affairs. For example, when a statistical analysis reveals that the past trend
pass percentage in the Chartered Accountancy exam is 20%, it does not mean that in the
forthcoming exams pass percentage will exactly be 20. It only suggests that pass percentage is
expected to be somewhere around 20.

Only an expert can efficiently handle statistical data - Only one who has an expert knowledge
of statistical methods can scientifically handle the statistical data. The use of statistical tool by
inexperienced and untrained persons might lead to very fallacious conclusions, for, if the figures
are manipulated or miscalculated, one may, for the time being, be led to take an utterly false
statement for an absolutely accurate fact.
TYPES OF DATA
Types of Data : Primary & Secondary
Types of Data : Qualitative & Quantitative Data
Data are known facts or things used as basis for inference or reckoning.

As shown in the following figure, we can see Data in two distinct ways: Categorical (Qualitative) and
Numerical (Quantitative):
CATEGORICAL DATA are values or observations that can be sorted into groups or categories. There are two types of
categorical values, nominal and ordinal. A nominal variable has no intrinsic ordering to its categories. For example, housing
is a categorical variable having two categories (own and rent). An ordinal variable has an established ordering. For example,
age as a variable with three orderly categories (1 - young, 2 - adult, and 3 - elder).
NUMERICAL DATA are values or observations that can be measured. There are mainly two kinds of numerical values,
discrete and continuous. Discrete data are values or observations that can be counted and are distinct and separate. For
example, number of lines in a code. Continuous data are values or observations that may take on any value within a finite
or infinite interval. For example, an economic time series such as historic gold prices.

Let’s discuss some kinds of datasets (discrete or continuous):

#E-mails #Credit approval records
#Digital images #Stock market logs
#Historic gold prices #Social media friends and relationships
#Tweets and trending topics #Sales records
PRESENTATION OF DATA – TABULAR PRESENTATION
 TABULAR REPRESENTATION OF DATA
The statistical data usually refers to the aggregate of the numerical data which eventually contributes to its collection,
interpretation, and analysis. Quantifying this data helps with the research and statistical operations. In the tabular
presentation, the data is presented in the form of rows and columns, and this data positioning makes reading and
understanding the data more feasible. The logical and statistical conclusions are derived from the presentation of the data.

Objectives of Tabular Data Presentation

• The objectives of tabular data presentation are as follows.

• The tabular data presentation helps in simplifying the complex data.

• It also helps to compare different data sets thereby bringing out the important aspects.

• The tabular presentation provides the foundation for statistical analysis.

• The tabular data presentation further helps in the formation of graphs, as well as diagrams for the purpose of advanced
data analysis.
 COMPONENTS OF TABULAR REPRESENTATION
Some of the components that are used in the table of tabular data presentation are as follows.

Table number: This is included for the purpose of identification and it provides for easy reference.

Title: It provides the nature of information which is included in the table. This information is included adjacent to table
number.

Stub: This is provided on the left-side of tabular form. The specific issues that are mentioned in the stub are presented in
the horizontal rows.

Caption: The caption is put on the top of columns within the table. The columns come with the specific unit within which
figures are noted down.

Body: This is the most significant of the table and it is located in the middle or centre of the table. It is made up of
numerical contents.
 COMPONENTS OF TABULAR REPRESENTATION
Footnote: The footnote gives the scope or potential for further explanation that might be required for any item which is
included in the table. The footnote helps with the clarification of data that is mentioned within the table.

Information source: The information source is included on the bottom of the table. It gives the source related to the
specific piece of information and the authenticity of the sources that are cited here helps in contributing to the credibility
of the data.
CLASSIFICATION OF DATA
 CLASSIFICATION OF DATA

• Raw data cannot be easily understood, and it is not fit for further analysis and
interpretation. Arrangement of data helps users in comparison and analysis.

• It is the process of arranging data into similar groups according to their common
characteristics.

• For example, the population of a town can be grouped according to gender, age,
marital status etc.
 METHOD OF CLASSIFICATION
On the basis of On the basis of
Characteristics Construction

Geographical Chronological Qualitative Quantitative

• Time Series,
• Spatial Series,
• Condition Series

Simple Manifold Statistical

Series Individual Discrete Continuous
Series Series Series

• Exclusive Series
• Organized • Inclusive Series
On the basis of • • Open Ended Series
On the basis of Unorganized
• Cumulative Series
Characteristics Construction • Equal & Unequal Series
• Mid Value Series
 On the basis of
Construction

Individual Discrete Continuous

Series Series Series

• Exclusive Series
• Organized • Inclusive Series
• Unorganized • Open Ended Series
• Cumulative Series
• Equal & Unequal Series
• Mid Value Series
DIAGRAMMATIC REPRESENTATION OF DATA
 DIAGRAMMATIC REPRESENTATION OF DATA

The Diagrammatic Presentation Of Data gives an immediate understanding of the real situation to be defined by the data in
comparison to the tabular presentation of data or textual representations. It translates the highly complex ideas included in
numbers into a more concrete and quickly understandable form pretty effectively. Diagrams may be less certain but are much
more efficient than tables in displaying the data.
BASICS OF DIAGRAMMATIC PRESENTATION: Concept of Diagrammatic Presentation
• It is a technique of presenting numeric data through pictograms, cartograms, bar diagrams, and pie diagrams. It is the most
attractive and appealing way to represent statistical data. Diagrams help in visual comparison and they have a bird’s eye view.
• Under pictograms, we use pictures to present data. For example, if we have to show the production of cars, we can draw
cars. Suppose the production of cars is 40,000, we can show it by a picture having four cars, where 1 car represents 10,000
units.
• Under cartograms, we make use of maps to show the geographical allocation of certain things.
• Bar diagrams are rectangular and placed on the same base. Their heights represent the magnitude/value of the variable. The
width of all the bars and the gaps between the two bars are kept the same.
• Pie diagram is a circle that is subdivided or partitioned to show the proportion of various components of the data.
Out of the given diagrams, only one-dimensional bar diagrams and pie diagrams are there in our scope.
GENERAL GUIDELINES

Title: Every diagram must be given a suitable title which should be small and self-explanatory.

Size: The size of the diagram should be appropriate, i.e., neither too small nor too big.

Paper used: Diagrams are generally prepared on blank paper.

Scale: Under one-dimensional diagrams, especially bar diagrams, the y-axis is more important from the
point of view of the decision of scale because we represent magnitude along this axis.

Index: When two or more variables are presented and different types of line/shading patterns are used to
distinguish, an index must be given to show their details.

Selection of proper type of diagram: It is very important to select the correct type of diagram to represent
data effectively.
ADVANTAGES OF DIAGRAMMATIC PRESENTATION

• Diagrams are attractive and impressive: The data presented in the form of diagrams can attract the
attention of even a common man.

• Easy to remember: (a) Diagrams have a great memorizing effect. (b) The picture created in mind by
the diagrams last much longer than those created by figures presented through the tabular forms.

• Diagrams save time: (a) They present complex mass data in a simplified manner. (b) The data
presented in the form of diagrams can be understood by the user very quickly.

• Diagrams simplify data: Diagrams are used to represent a huge mass of complex data in a simplified
and intelligible form which is easy to understand.

• Diagrams are useful in making comparison: It becomes easier to compare two sets of data visually by
presenting them through diagrams.

• More informative : Diagrams not only depict the characteristics of data but also bring out other hidden
facts and relations which are not possible from the classified and tabulated data.
BAR DIAGRAM
 BAR DIAGRAM
TYPES OF ONE-DIMENSIONAL DIAGRAM

One-dimensional diagram is a diagram in which only the length of the diagram is considered. It can be drawn in the form of a line or

various types of bars. The following are the types of one-dimensional diagram.

• Simple bar diagram : Simple bar diagram consists of a group of rectangular bars of equal width for each class or category of data.

• Multiple bar diagram : This diagram is used when we have to make a comparison between two or more variables like income and

expenditure, import and export for different years, marks obtained in different subjects in different classes, etc.

• Subdivided bar diagram : This diagram is constructed by subdividing the bars in the ratio of various components.

• Percentage bar diagram : The subdivided bar diagram presented on a percentage basis is known as the percentage bar diagram.

• Broken-scale bar diagram : This diagram is used when the value of one observation is very high as compared to the other.

To gain space for the smaller bars of the series, the larger bars may be broken.

The value of each bar is written at the top of the bar.

• Deviation bar diagram : Deviation bars are used to represent net changes in the data like net profit, net loss, net exports, net

imports, etc.
 SIMPLE BAR DIAGRAM

#YEAR WISE ADMISSIONS IN VARIOUS PROGRAMS

PROGRAMS
YEAR
B.COM BBA BCA
2019 100 200 300
 MULTIPLE BAR DIAGRAM
#YEAR WISE ADMISSIONS IN VARIOUS PROGRAMS

PROGRAMS
YEAR
B.COM BBA BCA

2019 100 200 300

2020 200 300 400

2021 300 400 500

 SUB DIVIDED BAR DIAGRAM

#YEAR WISE ADMISSIONS IN VARIOUS PROGRAMS

PROGRAMS
YEAR
B.COM BBA BCA
2019 100 200 300
2020 200 300 400
2021 300 400 500
 PERCENTAGE BAR DIAGRAM

#YEAR WISE ADMISSIONS IN VARIOUS PROGRAMS

PROGRAMS
YEAR
B.COM BBA BCA
2019 100 200 300
2020 200 300 400
2021 300 400 500
 BROKEN SCALE BAR DIAGRAM

#YEAR WISE ADMISSIONS IN VARIOUS PROGRAMS

PROGRAMS
YEAR
B.COM BBA BCA
2019 100 200 300
2020 200 300 400
2021 300 400 500
 DEVIATION BAR DIAGRAM

Sales and Net profit of private industrial companies

FINANCIAL SALES NET PROFIT

YEAR
2018-19 10% 50%

2019-20 14% -20%

2020-21 12% -10%

PIE DIAGRAM
 PIE DIAGRAM

MEANING OF PIE DIAGRAM

A pie diagram is a circle that is divided into sections. The size of each section indicates the magnitude of each

component as a part of the whole.

STEPS INVOLVED IN CONSTRUCTING PIE DIAGRAM

• Convert the given values into percentage form

• Evaluate the central angle for each component.

• Draw a circle and start the diagram by drawing one radius.

• Take the highest angle first with the protector (D) and mark the lower angles successively.

• Shade different angles differently to show distinction in each item.

 PIE CHART

In a Zoological park there are 1000

creatures as per the following table
given below:
BEAST ANIMALS 150

OTHER LAND 400

ANIMALS
BIRDS 225
WATER ANIMALS 175
REPTILES 50