Descriptive Statistics

calender iconUpdated on July 19, 2024
corporate finance and accounting
financial analysis

Descriptive statistics are a set of summary measures that provide a concise overview of the central tendency, variability, and shape of a data set. These statistics are commonly used to describe and summarize large datasets in a way that facilitates understanding and comparison.

Key Descriptive Statistics:

1. Mean:– The average of all values in the data set.- Represents the center of the distribution.- Can be influenced by outliers.

2. Median:– The middle value when the data set is arranged in ascending order.- Less sensitive to outliers than the mean.

3. Mode:– The value that appears most frequently in the data set.- Indicates the most common occurrence.

4. Standard Deviation:– A measure of variability that quantifies the spread of the data around the mean.- Higher standard deviation indicates greater variability.

5. Variance:– The square of the standard deviation.- Measures the squared deviation from the mean.

6. Range:– The difference between the maximum and minimum values in the data set.- Indicates the range of possible values.

7. Quantiles:– Divide the data set into equal parts, called quantiles.- Quartiles (25%, 50%, 75%) are commonly used to describe the distribution.

8. Percentiles:– Similar to quantiles, but divide the data set into percents.- Percentiles (e.g., 20%, 50%, 80%) are used to describe specific proportions of the data.

9. Skewness:– A measure of asymmetry in the distribution.- Positive skew indicates a tail that extends further to the right of the mean.

10. Kurtosis:– A measure of the degree of peakedness or flatness of the distribution.- Positive kurtosis indicates a distribution that is more peaked than a normal distribution.

Additional Notes:

  • Descriptive statistics are used in various fields, including data analysis, statistics, and business.
  • Different descriptive statistics may be more appropriate for different types of data and analyses.
  • It is important to consider the context and purpose of the analysis when selecting descriptive statistics.

FAQ's

What are descriptive statistics?

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Descriptive statistics are numerical or graphical methods used to summarize and describe the main features of a dataset. They provide simple summaries about the sample and the measures, giving an overview of the data without making conclusions beyond the data. Examples include measures of central tendency, dispersion, and graphical representations.

What is the difference between descriptive and inferential statistics

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What is meant by inferential statistics?

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What is an example of descriptive and inferential statistics in practice?

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