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Lecture 2b Data Analytics MF

This document discusses data analytics and visualization. It provides definitions for descriptive, diagnostic, predictive, and prescriptive analytics. It also discusses different types of visualizations like bar charts, line charts, pie charts, histograms, and scatter plots that can be used to visualize different types of data. Finally, it discusses dashboards and how they provide managers a snapshot of key performance indicators and allow for quick identification of trends and outliers.

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Vincent Choi
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© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
27 views

Lecture 2b Data Analytics MF

This document discusses data analytics and visualization. It provides definitions for descriptive, diagnostic, predictive, and prescriptive analytics. It also discusses different types of visualizations like bar charts, line charts, pie charts, histograms, and scatter plots that can be used to visualize different types of data. Finally, it discusses dashboards and how they provide managers a snapshot of key performance indicators and allow for quick identification of trends and outliers.

Uploaded by

Vincent Choi
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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DATA

ANALYTICS
Data provides the basis for all financial
and managerial information and
Data decision making within companies.

Analytics Access to a tremendous amount of


data both internally and externally

The accountant of the future must be


data literate and technologically
adept
Big Data
Usefulness of data and information for decisions

The quality of a decision depends on the quality of the data

In evaluating the quality of data, you should consider the source of the data and the information characteristics:

Complete

Accurate

Reliable

Timely

Information systems provide the information for decisions, organize it to increase the quality of information, and may
also be part of the solution (i.e., automating a process)
IMPACT CYCLE
Identify the
Problem

Track outcomes Master the data

Communicate Perform the tests

Address and refine


results
Data Analytics

Descriptive analysis: What happened? What is happening?

Diagnostic analysis: Why did it happen? What are the root causes of past
results? Can we explain why it happened?

Predictive analysis: Will it happen in the future? What is the probability something
will happen? Is it forecastable?

Prescriptive analysis: What should we do, based on what we expect will


happen? How do we optimize our performance based on potential constraints?
Data
Analytics
Drawing a picture with data
Data instead of leaving the data in a
spreadsheet or a table
Visualization
• help people understand the significance
of data by placing the data in a visual
context
• should be tailored to the audience
• Patterns, trends, and correlations can be
exposed and recognized easier with data
visualization
Financial data

Quantitative in nature typically based on aspects related to the income statement or balance sheet

Examples: Inventory turnover, ROI, current ratio, ROA, percentage increase/decrease in income or sales, and average
revenue per customer

Non-financial data

Non-quantitative in nature and are used to assess activities that an organization sees as important to the achievement of its
strategic objectives

May relate to customer relationships, employees, operations, quality, or the supply chain

Examples: number of new customers, number of defects, percentage of defects, number of new products produced,
number of customer complain
Bar Charts work well for time series data.
Time series data must be listed in chronological order.
Line charts are common if trend is the most important point to communicate.

Line Chart of Net Income for Amazon from Bar Chart of Net Income for Amazon from 2008–2018
2008–2018
Source: Amazon Income Statements 2008–2018.
Source: Amazon Income Statements 2008–
2018.
Pie Charts

Pie charts are good for categorical data


and for showing proportions.
Better if few categories.
In this case, a pie chart is a poor choice for
time series data.

Pie Chart of Financial Performance for


Amazon from 2008–2018

Source: Amazon Income Statements 2008–


2018.
Histogram
Scatter plot
DASHBOARDS

Provide at-a-glance views of KPIs relevant to a particular objective or business process

Displayed on a computer screen which is linked to a database that allows the report to
be constantly updated

Dashboards provides managers a snapshot of performance

Example: a manufacturing dashboard may show numbers related to productivity such


as the number of parts manufactured or number of parts that failed quality inspections
• Visual presentation of performance measures

• Ability to identify and correct negative trends

DASHBOARDS: • Measure efficiencies and inefficiencies

Benefits
• Ability to generate detailed reports showing new trends

• Ability to make more informed decisions

• Saves time as compared to running multiple reports

• Way to gain visibility quickly

• Quick identification of data outliers


Dashboards

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