SOME OF OUR LATEST THINKING

HOW ACCURATE ARE YOUR IRRs AND NPVs

The accuracy of your IRRs and NPVs depends to a large extent on the quality of the assumptions that go into the financial model. However, there is one element that also affects the accuracy of the calculations.
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AVOID CIRCULARITY IN FINANCIAL MODELS

Many finance problems inherently involve circular calculations. The most common of them is balancing the balance sheet. So how do we typically solve such kind of modeling problems?
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COMPARED WITH WHAT?

In his brilliant book Beautiful Evidence, Edward Tufte—nicknamed the Leonardo da Vinci of data by The New York Times—introduced six principles that he calls the fundamental principles of analytical design.
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TO FIND SEASONALITY USE CYCLE PLOTS

We've always been fascinated by the concept of “time”. It's probably the most important concept known to mankind and has long been a major subject of study in religion, philosophy, and science.
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DATA VISUALIZATION

FINANCIAL MODELING

BUSINESS MODELING

THE DANGER OF USING THE WRONG METRICS FOR POLICY MAKING

Adopted public policies affect everyone—they're called public for a reason after all. Nowhere is this truer than in the realm of defense policy.
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DON'T AVERAGE AVERAGES

It’s useful to distinguish two types of average measures: Simple average (or arithmetic average) and weighted average. Both—simple and weighted averages—are widely used in practice but each type is more appropriate to use than the other for certain purposes and applications.
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THE ECOLOGICAL CORRELATION FALLACY

If you ask a group of data analysts and data visualization experts to choose the most important chart type to display data, most probably “The scatterplot” would be the response you’ll get. And they have a point.
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BOOK REVIEW: THE FUNCTIONAL ART BY ALBERTO CAIRO

Outside the realm of hard sciences, I generally follow a simple heuristic to identify books worth reading. 1) Read books that have been in print for 15 years or so. 2) Break rule #1 for books written by authors who have in their portfolio at least one book that passes rule #1.
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Financial modeling

Data visualization

Business modeling

Excel charts

EXCEL CHARTS

How to Create a Dot Plot in Excel

How to Create a Dumbbell Chart in Excel

How to Create a Lollipop Chart in Excel

How To Create a Waffle Fourfold Chart in Excel Using Conditional Formatting

How to Create a Bar Chart With Color Ranges in Excel

How to Create a Non-Ribbon Sankey Diagram in Excel

How to Create a Horizontal Bar Graph With Endpoints In Excel

How to Create a Range Bar Graph in Excel

How to Create a Fan Chart in Excel

How to Create a Bivariate Area Chart in Excel

Tufte in Excel - The Bar Chart

How to Create a Fourfold Chart in Excel

Tufte in Excel - The Box Plot

Tufte in Excel - The Slopegraph

How to Create a Unit Chart in Excel

How to Create a Strip Plot in Excel

How to Create a Barcode Plot in Excel

How to Create a Grid Map In Excel

How to Create a Grid Map With Sparklines in Excel

How to Create a Scatterplot with Dynamic Reference Lines in Excel

How to Create a Heatmap In Excel

THE ECOLOGICAL CORRELATION FALLACY - PART 2

Tufte in Excel - The Dot-Dash-Plot

How to Create a Grid Map With Circles In Excel

How to Create a Bar Chart With Labels Above Bar  in Excel

When you look at correlation, when you hear correlation you’ve got to be suspicious. Learn how not to be fooled by relationships that are completely spurious.
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THE DATA-INK RATIO (GRAPHS)

The Data-Ink ratio is a concept first introduced by Edward Tufte—in his book the Visual Display of Quantitative Information. It can be summarized—in Tufte’s own words—by the fundamental principle of statistical graphics: Above all else show the data.
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THE DATA-INK RATIO (TABLES)

I pity tables. Most of us demote them to the bottom of the data visualization food chain—all too often for the wrong reasons. This is unfortunate because tables could be—in some instances—better than graphs at presenting information.
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ANSCOMBE QUARTET

Graphs are essential to good statistical analysis. Both summary statistics and graphs should be studied in any data analysis—since each will contribute to understanding.
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How to Create a Scatterplot Matrix In Excel

How to Create a Density Scatterplot In Excel

Tufte in Excel - Sparklines