1.6: USING EXPLORITORY AND EXPLANITORY DATA VISUIALIZATIONS IN BUSINESS ANALYTICS Flashcards
How are data visualizations used in the SOAR analytics model?
Data visualizations, such as graphs, charts, and images, are key tools used in both the “ANALYZE THE DATA” and “REPORT THE RESULTS” steps of the SOAR analytics model.
They serve for exploratory purposes, revealing patterns in data, and are also valuable for explanatory purposes, effectively communicating analysis findings to stakeholders.
What is the purpose of an exploratory visualization in the SOAR analytics model?
An exploratory visualization is a graphical representation used to uncover patterns and insights in data, often as part of descriptive or diagnostic analytics.
These visualizations are employed in the “ANALYZE THE DATA” step of the SOAR model to explore and understand the data, aiding in determining what happened and gaining a better understanding of data occurrences
Can you provide an example of an exploratory visualization used to understand profitability distribution?
An example is plotting the return on equity (ROE) at earnings intervals across all firms trading on a U.S. public exchange, as done by accounting researchers David Burgstahler and Ilia Dichev.
This exploratory visualization, shown in Exhibit 1.7, depicts earnings reported over a specific period within each profitability interval, falling under the category of descriptive analytics.
The bars at each value on the earnings interval represent the frequency of firms in that interval.
Why are data visualizations increasingly preferred over written content to communicate results?
Data visualizations are preferred because studies have shown that 91 percent of people favor visual content over written content.
On platforms like Facebook, photos have a much higher interaction rate (87 percent) compared to other post types.
Additionally, the brain processes images 60,000 times faster than text, and 90 percent of information transmitted to the brain is visual.
What are the five common types of visualizations used in data analysis?
The five common types of visualizations used in data analysis are:
Bar charts
Pie charts
Histograms
Line graphs
Scatterplots
These visualization types are chosen based on specific purposes and questions in data analysis.
What are the common purposes of data visualization and their corresponding common visualization types?
Comparison of values (commonly represented by Column chart or Bar chart)
Composition of values (commonly represented by Pie chart)
Distribution of values (commonly represented by Histogram)
Trends of values over time (commonly represented by Line graph)
Relationships between values (commonly represented by Scatterplot)
