Tools and techniques used in descriptive analytics

Measures of central tendency

• Mean: average value.

• Median: middle value.

• Mode: most repeated value.

Measures of variability

• Minimums and maximums

• Standard deviations: shows the extent of variability in sampled data.

• Quartiles: division of data observations into four defined intervals based on data values as a way of comparing to the overall data set.

• Deciles: division of data observations into ten defined intervals based on data values as a way of comparing to the overall data set.

Other tools

• Counts: the number of occurrences of a certain data item or event.

• Totals, sums, subtotals: summary measures.

• Graphs: diagrams showing the interrelationships between two or more variables.

• Percentage change: the extent to which a data item gains or loses magnitude or value.

• Pivottables: a tool that allows reorganization and summarization of certain data using cross-tabulations without changing the underlying spreadsheet (or data).

• Histograms: a visual representation of the distribution of data values.

• Ratio analyses: quantitative analyses of financial statement items to help evaluate liquidity, solvency, profitability, and efficiency of the underlying company.

• Vertical analyses: expresses financial information in relation to some relevant figure or base (e.g., total assets or total revenues).

• Horizontal analyses: provides comparative changes about various line items of each financial statement over time.