DATA
ANALYTICS
Data provides the basis for all financial
and managerial information and
Data decision making within companies.
Analytics Access to a tremendous amount of
data both internally and externally
The accountant of the future must be
data literate and technologically
adept
Big Data
Usefulness of data and information for decisions
The quality of a decision depends on the quality of the data
In evaluating the quality of data, you should consider the source of the data and the information characteristics:
Complete
Accurate
Reliable
Timely
Information systems provide the information for decisions, organize it to increase the quality of information, and may
also be part of the solution (i.e., automating a process)
IMPACT CYCLE
Identify the
Problem
Track outcomes Master the data
Communicate Perform the tests
Address and refine
results
Data Analytics
Descriptive analysis: What happened? What is happening?
Diagnostic analysis: Why did it happen? What are the root causes of past
results? Can we explain why it happened?
Predictive analysis: Will it happen in the future? What is the probability something
will happen? Is it forecastable?
Prescriptive analysis: What should we do, based on what we expect will
happen? How do we optimize our performance based on potential constraints?
Data
Analytics
Drawing a picture with data
Data instead of leaving the data in a
spreadsheet or a table
Visualization
• help people understand the significance
of data by placing the data in a visual
context
• should be tailored to the audience
• Patterns, trends, and correlations can be
exposed and recognized easier with data
visualization
Financial data
Quantitative in nature typically based on aspects related to the income statement or balance sheet
Examples: Inventory turnover, ROI, current ratio, ROA, percentage increase/decrease in income or sales, and average
revenue per customer
Non-financial data
Non-quantitative in nature and are used to assess activities that an organization sees as important to the achievement of its
strategic objectives
May relate to customer relationships, employees, operations, quality, or the supply chain
Examples: number of new customers, number of defects, percentage of defects, number of new products produced,
number of customer complain
Bar Charts work well for time series data.
Time series data must be listed in chronological order.
Line charts are common if trend is the most important point to communicate.
Line Chart of Net Income for Amazon from Bar Chart of Net Income for Amazon from 2008–2018
2008–2018
Source: Amazon Income Statements 2008–2018.
Source: Amazon Income Statements 2008–
2018.
Pie Charts
Pie charts are good for categorical data
and for showing proportions.
Better if few categories.
In this case, a pie chart is a poor choice for
time series data.
Pie Chart of Financial Performance for
Amazon from 2008–2018
Source: Amazon Income Statements 2008–
2018.
Histogram
Scatter plot
DASHBOARDS
Provide at-a-glance views of KPIs relevant to a particular objective or business process
Displayed on a computer screen which is linked to a database that allows the report to
be constantly updated
Dashboards provides managers a snapshot of performance
Example: a manufacturing dashboard may show numbers related to productivity such
as the number of parts manufactured or number of parts that failed quality inspections
• Visual presentation of performance measures
• Ability to identify and correct negative trends
DASHBOARDS: • Measure efficiencies and inefficiencies
Benefits
• Ability to generate detailed reports showing new trends
• Ability to make more informed decisions
• Saves time as compared to running multiple reports
• Way to gain visibility quickly
• Quick identification of data outliers
Dashboards
