Question

Why knowledge of of descriptive statistics are important in runinf a buisness and how the understanding of them can increase a firm’s profits?

It has to be at least 100 words.

Answer 1

The Descriptive statistics are related to the business key performance variables, which summarises the performance of the company either entirely or on a sample basis. It can be measured around central tendency or measure of variability (Spread).

These are particularly important while performing the sensitivity analysis on the financials. These are useful in understanding the numbers or trends in current period and which helps us in identifying the underlying analysis which can be used to forecast the performance of the company.

We can use graphs/tables to understand the meaning of analysed data.