Chapter 2: Graphs, Charts, and Tables--Describing Your Data

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60 CHAPTER 2 • GRAPHS, CHARTS, AND TABLES—DESCRIBING YOUR DATA Step 1 Define the categories. Data are available for the June 24, 2005 stock price and price/earnings ratio for each of eight companies. These data are shown as follows: Company (ticker symbol) PE Ratio Stock Price Abbott Labs (ABT) 21 $49 Altria Group (MO) 14 $65 Coca-Cola (KO) 21 $42 Colgate-Palmolive (CL) 20 $51 General Mills (GIS) 17 $51 Pfizer (PFE) 13 $29 Proctor & Gamble (PG) 21 $53 Wyeth (WYE) 15 $43 The category to be displayed is the company. Step 2 Determine the appropriate measure to be displayed. The measure of interest is the price/earnings ratio. Step 3 Develop the bar chart. A column bar chart is developed by placing the eight companies on the horizontal axis and constructing bars whose heights correspond to the value of the company’s price/earnings ratio. Each company is assigned a different-colored bar. The resulting bar chart is 25 PE Ratio 20 21 21 20 21 17 10 PE Ratio15 14 13 15 5 0 Abbott Labs (ABT) Altria Group (MO) Coca-Cola (KO) Colgate- Palmolive (CL) General Mills (GIS) Pfizer (PFE) Proctor & Gamble (PG) Wyeth (WYE) Company Step 4 Interpret the results. The bar chart shows three companies with especially low PE ratios. These are Altria Group, Pfizer, and Wyeth. Thus, of the eight recommended companies in the Growth and Income group, these three have the lowest PE ratios. You might be interested in seeing how these eight companies have done since this article was published in July 2005. Go to one of the online services (for example, Yahoo Finance) to get the current stock prices and PE ratios and compare those with the values listed above.
CHAPTER 2 • GRAPHS, CHARTS, AND TABLES—DESCRIBING YOUR DATA 61 TABLE 2.9 Salary Data for Bach, Lombard, & Wilson Males: Average Females: Average Year Starting Salaries Starting Salaries 2000 $44,456 $41,789 2001 $47,286 $46,478 2002 $56,234 $53,854 2003 $57,890 $58,600 2004 $63,467 $59,070 2005 $61,090 $55,321 2006 $67,543 $64,506 Business Application Excel and Minitab Tutorial BACH, LOMBARD, & WILSON One of the most useful features of bar charts is that they can display multiple issues. Consider Bach, Lombard, & Wilson, the New England law firm. Recently, the firm handled a case in which a woman was suing her employer, a major electronics firm, claiming the company gave higher starting salaries to men than to women. Consequently, she stated, even though the company tended to give equal percentage raises to women and men, the gap between the two groups widened. Attorneys at Bach, Lombard, & Wilson had their staff assemble massive amounts of data. Table 2.9 provides an example of the type of data they collected. A bar chart is a more effective way to convey this information, as Figure 2.12 shows. From this graph we can quickly see that in all years except 2003 the starting salaries for males did exceed that of females. The bar chart also illustrates that the general trend in starting salaries for both groups has been increasing, though with a slight downturn in 2005. Do you think the information in Figure 2.12 alone is sufficient to rule in favor of the claimant in this lawsuit? FIGURE 2.12 Bar Chart of Starting Salaries $80,000 $70,000 Male Males tend to have higher starting salaries. General upward trend in salaries. $60,000 Female Average Starting Salaries $50,000 $40,000 $30,000 $20,000 $10,000 0 2000 2001 2002 2003 2004 2005 2006
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Chapter 2: Graphs, Charts, and Tables--Describing Your Data

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