Richardson IDAA 1e Ch10 PPT

Introduction to Data
Analytics for
Accounting and Finance
© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further
distribution permitted without the prior written consent of McGraw Hill. 1
Share the
Story
Chapter 10
© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom.
No reproduction or further distribution permitted without the prior written consent of McGraw Hill.
2
Where we are now
4. Preparing
1. Data 2. Intro to
3. Types of Data Data for
Analytics Accounting Data
Analysis
5. Types and
6. Descriptive 7. Diagnostic 8. Predictive
Tools of Data
Analytics Analytics Analytics
Analyses
9. Prescriptive 10. Share the 11. Putting it All

Analytics Story Together
Learning Objectives
10-1 10-4
Describe the basics of data Demonstrate the use of predictive
visualization. statistics and analytics
visualizations.
10-2
Explain how descriptive analysis 10-5
incorporates visualizations in Explain how prescriptive statistics
communicating its results. visualizations are used.
10-3
Describe appropriate visualizations
for diagnostic statistics and
analytics.
The AMPS Model
 In the AMPS cycle, we’re

now going to look at Share
the Story.
Data Analytics are effective, but they are
only as important and effective as we can
communicate and make the data
understandable.
4-6
The Basics of
Data
Visualization
LO 10-1
Data Visualizations Terms
 Data visualization presents the results of analysis in an accessible

way through charts or graphs. Charts and graphs for structured data
typically display the following components:
Horizontal Axis – typically used Tick Marks – the increments of

for labels the scale that are listed on the
vertical axis
Vertical Axis – typically used for
values Data Series – charts represent raw
data visually
Scale – the scale by which the
values are measured Data Point – each data series is
made up of individual data points
Data Visualization Terms Illustrated
EXHIBIT 10.2 Column Chart of Total Sales by Company with Chart Components
Sorting Data Can Improve
Visualizations
EXHIBIT 10.4 Bar Chart Sorted by Total Sales
Visualizing Descriptive
Statistics and Analytics
LO 10-2
© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution
permitted without the prior written consent of McGraw Hill.
11
Is a Table of Descriptive Statistics
Enough?
 What should we use to get a

grasp for the results as a
whole?
 For this table, it is hard to see
the trend (changes over time)
for either sales or net income.
EXHIBIT 10.5 Table of Financial Performance for Amazon from 2008–2018

Source: Amazon Income Statements 2008–2018.
How Does a Bar Chart Clarify
Descriptive Data?
 Bar Charts work well for time series data. Time series data must be
listed in chronological order.
EXHIBIT 10.6 Bar Chart of Financial Performance for Amazon from 2008–2018 Source: Amazon
Income Statements 2008–2018.
Line Charts vs. Bar Charts
 Line charts are preferred (over bar charts) if trend is the most important
point to communicate.
EXHIBIT 10.7 Line Chart of Net Income for Amazon from 2008–2018 EXHIBIT 10.8 Bar Chart of Net Income for Amazon from 2008–2018 Source:
Source: Amazon Income Statements 2008–2018. Amazon Income Statements 2008–2018.
Histogram Examples
EXHIBIT 10.11 Histogram of Grade EXHIBIT 10.12 Example of Aged Receivables from an Excel
Distribution Pivot Chart (using Lab 6 data)
Bar Charts vs. Histograms
Word Cloud
Pie Charts
 Pie charts are good for

categorical data and for
showing proportions.
 Pie charts are rarely
preferred if there are more
than four categories.
 In this case, is a pie chart is
a good choice?
EXHIBIT 10.9 Pie Chart of Financial Performance for Amazon from 2008–2018
Source: Amazon Income Statements 2008–2018.
Pie Charts - example
Revenue share of Nike worldwide in 2020, by product category
EXHIBIT 7 - Revenue share of Nike worldwide in 2020, by product category

Source: Statista
19
An ordered bar chart is a little clearer.
4-20
Progress Check 10-1
(Group)
How does this chart
illustrate bias?
How big of a change does
this represent?
Why might the creator
make this chart?
4-21
A more appropriate scale is a good start.
4-22
Stacking can reveal the real increase.
4-23
Progress Check 10-2 (Ureply)
Progress Check 10-2 (Group)
Dashboard
26
Dashboards
 Dashboards typically have filters

available so that it is easy for decision-
makers to hone on a particular time
period, category, product, or geographic
area.
 For example, Amazon could display
both the year-over-year sales bar chart
and the year-over-year net income line
chart on the same report.
https://www.tableau.com/solutions/gallery/tale-100-
entrepreneurs
28
Visualizing
Diagnostic
Statistics and
Analytics
LO 10-3
 Outliers are often used as part of diagnostic analytics
Identifying and can be assessed in two ways:
Outliers and • “Eyeball” the data

• Construct a box plot
Anomalies
Distribution of exam results
31
Box Plots Show the Relative Position
of Data, Like Histograms.
EXHIBIT 10.14 Box Plot of Invoice Totals with Outlier
33
https://www.tableau.com/solutions/gallery/two-
weeks-home-sales
34
Example of box plots
 Which box plot has outliers?
 Which set of data has wider
variability?
 There is a slight skew to the
data for weight. In which
direction does it skew?
Skewness
Q: What does a positively skewed

exam result imply?
Use PivotTables For Exploratory
Diagnostic Analytics.
 In diagnostic analytics and in outlier detection, you’re already

looking to identify trends, distribution shapes, and outliers.
 Data in a PivotTable can be sliced, diced, and filtered to see how
the Pivot Chart (or pivot charts in a dashboard) shifts and changes
shape, bringing additional insight to a scenario.
Q. What observation that one cannot

make about a set of data when
analyzing a box plot?
Visualizing
Predictive
Statistics and
Analytics
LO 10-4
Correlation and Regression
 Scatter plots are a useful way
to visualize your data if you
have two different measures
(for example two different
years’ worth of sales across
states or stores), and you wish
to visualize the relationship
between the two measures.
 If you had this data, how
would you know if there is a EXHIBIT 10.15 Sales Data for 2017 and 2018
correlation?
Examples of a Scatter Plot and Trend
Line
EXHIBIT 10.16 Scatter Plot of EXHIBIT 10.17 Scatter Plot of Correlation

Correlation between Two between Two Variables with Trend Line
Variables
Visualizing Time Series Data
 Visualizing forecasting data is helpful to provide decision makers
with a quick overview of how their decisions will affect future
performance.
EXHIBIT 10.18 Time Series Visualizations

Progress Check 10-5 (Group)
Q. Give an example of two

phenomena in the real world that are
positively/negatively correlated with
one another.
Visualizing Prescriptive
Statistics and Analytics
LO 10-5
Sensitivity Analysis – Graph vs. Table
This table shares the

expected stock price
assuming different
sales growth rates
and different
expected costs of
capital.
EXHIBIT 10.19 Illustration of What-If Sensitivity Analysis
Q: Would you rather show this

information in a graph?
Breakeven Analysis – Graph vs. Table
This graph shows the level
of total revenue, total costs,
the slope associated with
variable costs, the extent of
fixed costs and total profits
at various levels of units
sold.
Could you show all this
information in a table in a
concise way?
EXHIBIT 10.20 What-If Breakeven Analysis
How can you refine
your charts?
4-49
Improving your charts comes down to
choosing an appropriate scale and
using colors effectively.
4-50
Consider scale and increments:
How much data do you What is the baseline? 0?

need to show? Something else?
What do you do with Would context or

outliers? reference lines make the
scale more meaningful?
4-51
Think about your use of color:
What do the colors

What color scheme mean?
would help your
color-blind Should red be used
participants? for positive
outcomes?
4-52
Color carries tone & meaning
Not everyone sees color
Not everyone sees color
Color grabs
attention
Source: Statista
Color grabs
attention
Source: Statista
Color
grabs
attention
Source: Statista
Color signals where to look
Source: Walmart Annual Report 2021

Color signals where to look
Source: Walmart Annual Report 2021

Color should be used sparingly
Source: Statista
Color should be used sparingly
Source: Statista
Color can carry
quant value
Source: Statista
Color can carry
quant value
Source: Statista
Color should be used consistently
Source: Statista
Color should be used consistently
Source: Statista
How can the use of
words provide insight?
4-70
Get to the point. Be clear,
unambiguous, correct,
interesting, and direct.
Consider your audience and tone
 Use an appropriate tone.

 Place the focus on your
audience.
 Provide the right content.
 Craft different versions
for different audiences.  Avoid too much detail.
4-72
Don’t forget to revise as
needed. Ask other people to
read through your writing to
make sure you are clear.
4-73
Labs Associated with
Chapter 10
Lab Name
10-1 Create a Dashboard in Excel Using PivotTables and Slicers

10-2 Create a Dashboard Using Tableau
Summary
In Chapter 10, we discussed best practices in sharing the story, as the

last component of the AMPS model. Sharing the story is the means
of communicating results to decision makers, including the use of
visualizations, graphs and reports. We discussed the best way to
communicate results to decision makers and in the end, address and
answer accounting/finance questions.

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Introduction to Data

9. Prescriptive 10. Share the 11. Putting it All

 In the AMPS cycle, we’re

 Data visualization presents the results of analysis in an accessible

Horizontal Axis – typically used Tick Marks – the increments of

EXHIBIT 10.4 Bar Chart Sorted by Total Sales

 What should we use to get a

EXHIBIT 10.5 Table of Financial Performance for Amazon from 2008–2018

 Pie charts are good for

EXHIBIT 7 - Revenue share of Nike worldwide in 2020, by product category

 Dashboards typically have filters

Outliers and • “Eyeball” the data

EXHIBIT 10.14 Box Plot of Invoice Totals with Outlier

Q: What does a positively skewed

 In diagnostic analytics and in outlier detection, you’re already

Q. What observation that one cannot

EXHIBIT 10.16 Scatter Plot of EXHIBIT 10.17 Scatter Plot of Correlation

EXHIBIT 10.18 Time Series Visualizations

Q. Give an example of two

This table shares the

EXHIBIT 10.19 Illustration of What-If Sensitivity Analysis

Q: Would you rather show this

EXHIBIT 10.20 What-If Breakeven Analysis

How much data do you What is the baseline? 0?

What do you do with Would context or

What do the colors

Source: Walmart Annual Report 2021

Source: Walmart Annual Report 2021

 Use an appropriate tone.

10-1 Create a Dashboard in Excel Using PivotTables and Slicers

In Chapter 10, we discussed best practices in sharing the story, as the

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