As trained accountants, we are used to looking for patterns in numbers, whether those numbers are in a traditional financial statement format or in tables. People not as accustomed to seeing patterns of numbers, sometimes have difficulty recognizing such patterns.
Graphs are an extremely powerful presentation technique. Readers are able to see exactly what is represented by a graph almost at a glance. Every day, the Wall Street Journal includes several graphs of activities in the financial markets for various time periods. One can simply glance at these graphs to see the trends inherent in the data. It would be very difficult to "see" these movements in other data presentation methods. Including graphs in our reports can assist readers of our information in seeing relationships in the data presented.
The purpose of this article is twofold. The first is to illustrate the very efficient ability of graphs to convey information to the reader of the graph and to convince readers of this article to make wider use of graphs. The second purpose is to point out how the judicious use of graphs can enhance accounting practice as a marketing tool.
In statistics and mathematical literature, rules have been proposed for the proper presentation of graphed data. These rules include items such as the following:
A time series shown with bar charts should be shown with vertical, rather than horizontal bars. The most current year should be presented to the right.
Width of Bars and Spacing: Bars should be of uniform width and evenly spaced. The bars should not be either disproportionately long or narrow; nor short and wide.
Scale: A carefully planned scale should be included in every chart. In addition: 1) The scale should begin at zero. 2) The scale should never be broken. 3) The intervals should be in round numbers. For example, 100-200-300 should be used; rather than 121-221-321.
Data: Data may be included directly on the chart. Generally, data should be outside the zero line. However, if the figures are placed at the end of the bars, the lettering should be relatively small in size and separated from the bar. If data is placed in the bar, the lettering should be small enough to leave a strip of shading on all sides.
Number of Categories: If more than four or five categories are used for a simple comparison, a bar chart should be used rather than a pie chart.
Sections: The section should be laid out in some logical...