The branch of mathematics which helps to transform numbers into respective important information that are used for making decisions is known as statistics. This particular subject lets an individual to know about risky situations that are associated with a particular business decision. So, it helps to get deeper knowledge of a problem and gives the individual ways for making different decisions regarding the business. Statistics helps a business firm by providing different methods for variations in sensible parameters which ultimately assist in decision making procedure. Ultimately the subject of statistics assists the business firm to analyze the profit and loss through the sense of numbers.
In the world of business, the subject of statistics has got three different and important uses. The main thing that is necessary for business statistics is summarization of business data. The three different specific uses of statistics in business are to draw various conclusion from the collected data, to make valid forecasts about the particular business activity and ultimately to help the firm to gain profit.
These methods are dependent of two branches of statistics which are inferential statistics and descriptive statistics. The method that helps in the collection, summarization, presentation and lastly analysis of business data is known as descriptive statistics. In inferential statistics, the data is collected from a small group in order to draw conclusion on a bigger group. Most of the charts and tables that we witness in a business presentation are made from descriptive statistical methods. During the process of understanding particular business investment in business firms, the subject of statistics is used in three different ways. They are as follows:
- For visualizing and summarizing data
- For reaching conclusions about large groups that are based on data collected from comparably smaller group
- For improving business processes by using managerial approaches like Six Sigma which focus on improvement.
There are particular methods for using assumptions and conditions and concluding results. For doing this the business firm needs a statistician who knows the subject well. Calculation can not be done by anyone. Moreover, the subject is totally based on mathematics. The subject helps to create important information from either samples or populations. In most cases the conclusion is presented in tables, charts, graphs, and other pictorial presentations. A population includes all items and individuals which are required to draw conclusions and the portion of a population which is selected for analysis is known as sample. The variables of the data may differ for various reasons. Without operational definitions, variable values become meaningless. The collection of data has to be done very carefully in order to get a perfect result. The result can be understood by anyone when he or she gives a visual look at the particular stuff. The representations can also be made with the help of computer. You can make the report interesting by using various types of settings from the computer program.
The statistical analysis also gives a comparison of various variables. It uttermost clear that business growth cannot be witnessed without proper statistical analysis.