Business statistics are the collection, analysing and interpretation of figures
They are used in several aspects of business, such as:
Financial Statements preparation
Many businesses use business statistics to evaluate their performance and in making good and sound decisions. These statistics contain data that is published for business members to look at and analyse. After looking at and analysing the data they will be able to make better business decisions.
When using business statistics, it is important to get a good feel of how business statistics work and you should understand how the numbers work, as this will help you make good business decisions for your business or company.
Why Business Statistics?
Learning the business statistics of your business or company can help you and your senior managers make important decisions, which can have an impact on the future of your business or company. In order to understand what is being conveyed in the statistics, you and your managers should ask yourselves some questions, such as:
- What does the data represent?
- Why was the data generated?
- Where did the data come from?
- Who covered the cost of the research to get the data?
It is very important for managers to know the answers to the above questions. Because, if they know the answers, they will have a much easier time explaining the data and figures to other persons when they are called upon to provide suitable explanations.
It also helps if managers are familiar with some of the basic language used in business statistics, for example:
Data Mining – This is the process of collecting, searching and analysing a large amount of data in a database, so as to discover patterns or relationships.
Data Sampling – This is a technique used in business statistics, to assist in making decisions about potential business ventures, and existing business practices.
Mean – In business statistics, this is referring to a set of numbers with average values. In the arithmetic sense, this is an alternative for “average”. For example, if ten pairs of shoes cost $800 then the mean cost would be $80.
Mode – This is the number that is seen or shown the most within a group of other numbers. For example, if four cups are red, one blue and one white, then the mode is red.
Median – This is the middle number within a set of numbers in order of magnitude. For example, if five individuals earn respectively $200, $250, $300, $1,000 and $2,000 per week, then the median wage is $300 because, half earn more and half earn less than this amount.