Business Statistics Formula – Cheat Sheet / Handbook

Business Statistics Formula Handbook

Table of Contents

Measures of Central Tendency

Measures of Dispersion

Correlation

Regression

Sampling

Test of Hypothesis

Chi-Square Test

Index Numbers

Interpolation

Extrapolation

Measures of Central Tendency – MEAN, MEDIAN, MODE

MEAN – It is the average of a given set of observation.

Ungrouped data


Grouped data

Direct Method:


Shortcut Method:


Combined Mean:


MEDIAN – It is the middle value of an observation

Ungrouped data:


Grouped data:


MODE – It is the value which occur the maximum number of times in a data

Ungrouped data:

Mode is the value which has the highest frequency.

Grouped data:


Relationship between Mean,Median and Mode


Measures of Dispersion

Range: It is the difference between the value of smallest observation and largest observation in a data.


Quartile Deviation:


Average Deviation:

Ungrouped Data:


Grouped Data:


Standard Deviation:

Ungrouped Data:


Assumed Mean Method:


Grouped Data:


S.D. of Natural Numbers:


Variance:


Relationship between Measures of Variation:


Correlation

Karl Pearson`s Co-efficient Method:


In case of Grouped data:


Spearman`s Rank Coefficient:


Regression Analysis

Regression Equation of Y on X:


Regression Equation of X on Y:


If deviations are taken from mean:


If deviations are taken from assumed mean:


Regression Coefficients:



Relation between coefficient of correlation and two regression coefficients:


Index numbers


Sampling

Sample size determination:

Mean:


Proportion:


Test of Hypothesis

Null Hypothesis – Ho

Alternate Hypothesis – H1

Size of Sample – n

Types of Tests – One tailed, Two Tailed, Right tailed, Left tailedSignType of TestKeyword to look for≠Two tailed TestOr Not, always, neverLeft Tailed TestHigher than, More than, IncreasedRight Tailed TestLower than, Less than, Decreased

Process:

  1. Formulate the hypothesis

  2. Set the significance level

  3. Decide the Test Statistic (z,t)

  4. Find out the critical value

  5. Make a conclusion

Use Z statistic when sample size is > 30

Use T statistic when sample size is < 30 and/or Standard Deviation is Unknown

Calculation of Z statistic

Mean


Difference of two mean


Counting 


Proportion


Difference of two Proportions


Calculation of T statistic:

Mean:


Difference in two mean


Difference of two means with dependent samples


Chi Square Test


Interpolation

Extrapolation

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