finance articles businesses business management business marketing Technologies finance accounting Industrial Manufacturing starting a small business Investment health information

Tips for tax time


If you are involved at all in business finance, you will spend a fair amount of time looking at charts and graphs that represent visually what is happening or expected to happen with your money.Reading charts and graphs seems straightforward but there are actually some things that you need to know to read them properly.




Step 1:Read the heading.The first thing that you should do when you look at a chart or a graph is to read the heading.For every chart published there has to be some title describing the chart.The same is true for charts included in financial reports or even presented in meeting.Reading the heading will help you understand every other thing about the chart.A sample heading might be something like "production costs by quarter" or "Dow Jones Index, July 14th, 2007".The heading is designed to briefly and concisely describe what it is that the graph or chart represents.

Step 2:Look at the titles on the horizontal and vertical axis.Almost all charts will have both a horizontal axis (the stuff on the bottom of the chart) and a vertical axis (the stuff going up the side of the chart).This "stuff" is important to helping you read the chart.For example, in the "production costs by quarter" graph, you might see something like a bar graph with the different quarters along the horizontal axis (e.g., 1st, 2nd, 3rd, 4th) The bars will raise to the level of whatever is on the vertical axis (e.g., $1,000, 2,000, 3,000, etc).By looking at the titles, you should have a pretty good idea of what the chart is showing you.If the bars above the 1st, 2nd, and 3rd, quarters are all around $1,000 and the bar above the 4th quarter goes to the $5000 dollar line, you can infer that the production costs were roughly a thousand dollars per quarter for the first three quarters and then five thousand dollars in the fourth quarter.A chart like this might make you want to check out another type of chart, say one that shows the profits related to production costs.

Step 3:Consider the scale.When reading a chart or a graph, the scale that is used can be quite misleading.Your company might have maintained virtually the same profit margin from one year to the next.However, in an attempt to make it look like there has been an increase in profits, a chart might be created where the scale is dollars or even pennies.If your company only made $2.00 more than they made last year, that can look pretty impressive on a graph.Carefully consider the scale when deciding whether you are impressed or not with the data provided.

Step 4:Read the notes below the chart.In most charts and graphs there will be some notes just below the chart.Read these notes because this parenthetical information is often relevant to the interpretation of the information contained in the chart.For example, the chart might be titled "Production costs" and the bars might be like those described in step two (one thousand for the first three quarters and five thousand in the last quarter) but there might be a note under the chart that state that the fourth quarter costs are projected from cost of the previous year.

Tips and warnings

If possible, check to see if there are statistics associated with the charts and graphs.Just looking at lines that go up or down, you cannot assume that the increases or decreases are significant.Statistically significant changes are often starred on a graph; this is something else that will be noted beneath the graph.

FREE: Get More Leads!
How To Get More LeadsSubscribe to our free newsletter and get our "How To Get More Leads" course free via email. Just enter your first name and email address below to subscribe.
First Name *
Email *

Get More Business Info
Sponsored Links
Recent Articles


Copyright 2003-2020 by - All Rights Reserved
Privacy Policy, Terms of Use