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Posts Tagged ‘Data visualization’

I like infographics, if done well.  Moxy has one out that is done well.

Infographics is a new word, and I couldn’t find it in any online dictionary.  But I found it on Wikipedia:

Information graphics or infographics are graphic visual representations of information, data or knowledge. These graphics present complex information quickly and clearly, such as in signs, maps, journalism, technical writing, and education. With an information graphic, computer scientists, mathematicians, and statisticians develop and communicate concepts using a single symbol to process information.

An infographic is a form of data visualization, I imagine.  Data visualization is a topic I’ve written about, here, here and here.  One of my favorite infographics is the daily USAToday weather map.

Moxy has an infographic out on proxy season.  A proxy season is the period of time between when a proxy is registered (filed with the SEC) and the annual shareholders meeting.  I’ve snipped a revealing part of the infographic.  Click on the snippet to be taken to the original infographic at Moxy.

Thanks, Moxy.

Debit and credit – – David Albrecht

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What is the difference between a novelist and a Lehman Brothers accountant?  Both deal in fiction, work in solitude much of the time, and deal in the creation of art.  The writer can paint a picture with words that others might observe, understand and appreciate.   The Lehman Brothers accountant painted a picture of reduced liabilities that others observed, but misunderstood and in hindsight didn’t appreciate.

I have a history with numbers and visualization.  As a kid, I would practice counting–by ones, twos, threes, fours (my favorite), etc.  It must have seemed odd to neighbors when I delivered newspapers while reciting my numbers up to 1,000.  Then I progressed to multiplication tables memorized through 20×20, fractions memorized through fifteenths, and mental arithmetic (medium length number addition, subtraction, multiplication).  As a result of all this, I can communicate in numbers.  And more than that, endorphins flood my body when I pick up paper filled with numbers .

In my first accounting classes I discovered others like me–people who can read and understand numbers.  We like numbers and charts.  A few of my favorites are supply & demand (which I had figured out by kindergarten), breakeven, and curvilinear costs:

Upon picking up a document willed with numbers, my eyes search for the patterns I know have to be there.  Once I have identified the patterns, trend lines fill my mind, lines that are living and vibrant organisms that I can look and marvel at from several different perspectives.  What?  You can’t do that?

When I became an accounting professor, I would layout a few columns of numbers on the board, and encourage students to identify the patterns by rearranging them and adding percentages.  Here’s an example from one of my lectures:

Students are instructed to recast single step income statements (a corporate favorite) into a classified (multiple step) format, then convert to percentages based on yearly sales.  Can you spot the patterns that caused profits to suffer after 2006?

After 30 years in the collegiate accounting classroom, I’ve come to realize that understanding the above chart remains difficult for most students (even undergrad accounting students).  Perhaps it is time for a change.

Some good work is being done with data visualization.  I’m presenting two YouTube videos that might start you thinking of different methods present data.

The first video presented here is a TEDTalks featuring journalist David McCandless in “The Beauty of Data Visualization.”  Everything he does is based on the principle that using our eyes more will make it possible “… to see the patterns and connections that really matter.”  Besides, “… visualizing information is really cool.”  He says that “We can use [data visualization] to alter our perspective or change our views.”  And this leads to a change in behavior.

Swedish professor Hans Rosling studies the science of health.  Using self-developed software (previously profiled here on The Summa), works on dispelling myths.  He says, “The problem is not knowledge, but preconceived ideas.”  This TEDTalks video is well worth the time to view.

Isn’t it time for accountants moved into the 21st century and developed some Hans Rosling showmanship?  Just think how much better the world would be if more investors understood that patterns crying for release from oceans of financial data.

Debit and credit – – David Albrecht

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Paul Butler is an intern at Facebook.  On December 13, 2010, he posted a note on Facebook pertaining to a rather unique example, or picture, of data visualization.

I’ve written before about data visualization:  Intriguing Example of Data Visualization, and I’ll write about it again.  Sometimes, a sea of data can prevent one from seeing the big picture.  Once visible, a good job of data visualization can present the creator’s interpretation.  To abuse a tired cliché, it is possible to miss the forest because there are too many trees.

This is what Paul attempted, in his own words:

Visualizing data is like photography. Instead of starting with a blank canvas, you manipulate the lens used to present the data from a certain angle.  When the data is the social graph of 500 million people, there are a lot of lenses through which you can view it. One that piqued my curiosity was the locality of friendship. I was interested in seeing how geography and political borders affected where people lived relative to their friends. I wanted a visualization that would show which cities had a lot of friendships between them.

pic credit: Paul Butler

After a few minutes of rendering, the new plot appeared, and I was a bit taken aback by what I saw. The blob had turned into a surprisingly detailed map of the world. Not only were continents visible, certain international borders were apparent as well. What really struck me, though, was knowing that the lines didn’t represent coasts or rivers or political borders, but real human relationships. Each line might represent a friendship made while travelling, a family member abroad, or an old college friend pulled away by the various forces of life.

The result is stunning, if for no other reason than the picture implies that relationships light up the world.  There are some noticeable dark spots:  the interior of South America, north and central Africa, Russia and China.

I’m an accounting professor, and data visualization is important because there are too many numbers that are in need of the type of picture that Butler can create.  If you find another great example, e-mail me at albrecht@profalbrecht.com.

Debit and credit – – David Albrecht

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Accountants need to be competent in data visualization.  Strike that.  Accountants should be expert in data visualization.  Data visualization is when numeric data is displayed graphically so as to help interested people understand and interpret it.  To reuse a tired cliche, a picture is worth about 1,000 words, sometimes more and sometimes less.

Most accountants mentally picture columns of numbers in published financial statements when I mention visualizing data.  We understand numbers, but even we employ data visualization techniques.  For example, I can much more easily understand a company’s two years of balance sheets or three years of income statements if they are common sized (converted to a percentage of either total assets for the balance sheet, or a key revenue for the income statement).

Specialists in corporate public relations have for years been inserting line, bar and pie charts into financial statements to help the reader quickly grasp the essence of key numbers in the accompanying financial statements.

Over on AECM, the e-mail listserv for accounting professors, master tax teacher extraordinaire Amy Dunbar (University of Connecticut) shared a link to a Youtube video that shows just how far data visualization has gone beyond what we accountants provide in annual reports.

You must watch this video of Hans Rosling.

Hans Rosling is Professor of International Health at Karolinska Institute and Director of the Gapminder Foundation, which developed the Trendalyzer software system …  Rosling co-founded the Gapminder Foundation together with his son Ola Rosling and daughter-in-law Anna Rosling Rönnlund. Gapminder developed the Trendalyzer software that converts international statistics into moving, interactive and enjoyable graphics. The aim is to promote a fact-based world view through increased use and understanding of freely accessible public statistics. His lectures using Gapminder graphics to visualise world development have won awards by being humorous yet deadly serious.  [from Wikipedia article accessed December 16, 2010.]

A good professor uses a white-board to help students visualize accounting/finance concepts and information.  Isn’t it time we accountants moved into the 21st century and developed some Hans Rosling showmanship?

Debit and credit – – David Albrecht

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