What branch of statistics refers to the process of arriving at a conclusion about a population of data based on the information obtained from a sample?
Statistics Meaning
Statistics comprises useful data interpretation tools like mean, median, mode, standard deviation, coefficient of variance, and sample tests. Raw financial data in a numerical format is interpreted using mathematical formulas. Many sectors like science, government, manufacturing, population, psychology, banking, and financial markets rely on statistical data.
You are free to use this image on your website, templates, etc, Please provide us with an attribution linkArticle Link to be Hyperlinked Statistics ExplainedStatistics is the systematic processing and interpretation of raw data to compile a conclusive result. These reports are drafted in a numerical format. They are presented in a succinct manner so that one can read and understand easily. One should be able to comprehend them at a mere glance. Financial data is in a numerical format and includes details about portfolios, investments, and assets. Historical data and present data are interpreted using mathematical formulas. Forecasts are based on available information and requirements. Application of StatisticsStatistics is indispensable for decision-making in various sectors and verticals. It is applied in marketing, e-commerce, banking, finance, human resource, production, and information technology. In addition, this mathematical discipline has been a prominent part of research and is widely used in data mining, medicine, aerospace, robotics, psychology, and machine learning. Not to forget the economicsEconomics is an area of social science that studies the production, distribution, and consumption of limited resources within a society.read more, government, and public sectors where statistical data is a significant part of decision-making. For example, it is used for public surveys, weather forecasts, sports scoring, and budgetingBudgeting is a method used by businesses to make precise projections of revenues and expenditure for a future specific period of time while taking into account various internal and external factors prevailing at that time.read more. Role of Statistics in FinanceIn the finance sector, statistical data facilitate decision-making. For instance, a watch manufacturing company can use statistical tools to determine the percentage of defective watches in every lot. At a macro level, it helps in understanding a country’s financial state and measuring economic growthEconomic growth refers to an increase in the aggregated production and market value of economic commodities and services in an economy over a specific period.read more. At a micro-level, statistics helps analysts determine a company’s business income, earningsEarnings are usually defined as the net income of the company obtained after reducing the cost of sales, operating expenses, interest, and taxes from all the sales revenue for a specific time period. In the case of an individual, it comprises wages or salaries or other payments.read more, and revenue-generating capacity. Be it preparing budgets, financial forecastsFinancial Forecasting is the process of predicting or estimating future stats of an organization i.e. how business will perform in the future based on historical data like by analyzing the income statement, position statement, current conditions, past trends of the financial, future internal and external environment which is usually undertaken with the objective of preparing and developing budget and allocating available resources to ensure best possible utilization.read more, monitoring a company, or a country’s performance, statistics is everywhere. Statistics ExampleLets’ take an example to understand the application of statistics. PNU Productions manufactures fashion clothes for kids. Now, the company is planning to expand into a new line of business, i.e., fashion garments for women. However, before expanding, the management prepares a forecast of customer preferences and expectations. There are around 5 million women who can potentially be target customers. So, the management decided to survey 1000 women from different areas and of varying age groups. The survey aimed to find out needs and choices in fashion outfits. This way, the statistical analysis helped the company make an effective decision. In the practical world, this mathematical discipline is applied widely to catch the nerves of a particular stock movement. Also, statistical computer models consider the historical prices of a specific stock to interpret its future performance and returns. These tools analyze economic trends and determine the business cycleThe business cycle refers to the alternating phases of economic growth and decline.read more. PropertiesVarious statistical properties make this discipline useful for crucial decision-making and research in different fields. Let us discuss some of these:
Types of StatisticsGiven below are the two different forms of statistical approaches: #1 – DescriptiveDescriptive StatisticsDescriptive statistics is used to summarize information available in statistics, and there is a descriptive statistics function in Excel as well. This built-in tool is found in the data tab, in the data analysis section.read more refers to data that shows the fundamental aspects of a selected population. Also, it establishes how it was organized and presented. The data can be analyzed by simply looking at the provided information and referring to how it is arranged. It is further classified as follows.
#2 – InferentialThe inferential discipline focuses on arriving at a conclusion based on the sample evaluation. It is further classified into:
Limitations of StatisticsThere is a downside to relying on statistical data. Following are its limitations:
Frequently Asked Questions (FAQs)What does statistics mean? It is the science behind identifying, collecting, organizing, summarizing, analyzing, interpreting, and presenting data. The data could be either qualitative or quantitative. This mathematical decision is employed in decision-making. Why is statistics important? Statistical data analysis plays a crucial role in scientific discoveries, research, economic decisions, government budgeting, public welfare activities, weather forecast, and stock analysis. In addition, this mathematical discipline makes decision-making more objective. What is the difference between descriptive and inferential statistics? Descriptive discipline is the quantitative part of the statistical analysis. The raw data is first collected and organized. Then it is presented in a succinct manner. The inferential subtype, on the other hand, focuses on interpreting sample data to form conclusions. Recommended ArticlesThis has been a guide to What is Statistics and its Meaning. Here we explain how statistics work, its application, types, roles, properties, and limitations. You may also have a look at related articles on finance –
Which branch of statistics is involved in using a sample to draw conclusions about a population?Inferential Statistics
CONCEPT The branch of statistics that analyzes sample data to reach conclusions about a population.
What branch of statistics focuses on conclusion?Inferential statistics, as the name suggests, involves drawing the right conclusions from the statistical analysis that has been performed using descriptive statistics.
What branch of statistics does using samples to say something about the population come from?Inferential statistics describe the many ways in which statistics derived from observations on samples from study populations can be used to deduce whether or not those populations are truly different.
Which branch of statistics processes data?Descriptive statistics is the part of statistics that deals with presenting the data we have.
What is the branch of statistics that interprets and draws conclusion from the data?Inferential statistics are tools that statisticians use to draw conclusions about the characteristics of a population, drawn from the characteristics of a sample, and to decide how certain they can be of the reliability of those conclusions.
What do you call the processes involved in making conclusions about a population?Statistical inference is the process of drawing conclusions about an underlying population based on a sample or subset of the data.
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